(a) On August 8, 1997, the Hon. Minister of Foreign Affairs, on behalf of the Minister of Transport, announced that the Government of Canada would be transferring the port of Churchill to the Hudson Bay Port Corporation in accordance with Canada's national marine policy. In support of that transfer, Transport Canada is providing a total of $14.45 million under its port divestiture fund for health and safety upgrades to the port facility. These upgrades include improved dust control, a new hopper car unloader and concrete restoration measures.
Additional funding of $19.6 million is being provided for capacity enhancements at the port including a new tug and trackmobile, wharf face repairs and dredging of the port. This funding consists of $9 million from western economic diversification, $4.6 million under the western grain transportation adjustment fund and $6 million from the province of Manitoba. This funding will be provided to Hudson Bay Port Corporation under a contribution agreement with western economic diversification with funds to be provided on a reimbursement basis after eligible costs have been incurred.
Total federal support of $28.05 million along with provincial funding of $6 million are key elements in ensuring that the port of Churchill will be internationally competitive and economically viable and independent over the long term.
(b) In a separate transaction, CN rail has sold the bay line to Churchill to Hudson Bay Rail Company. Western economic diversification will provide $16 million to CN in recognition of its losses on the bay line and to allow it to proceed with the sale rather than abandon the line and recover the salvage value.
The rail line transaction involves 1,300 km of track connecting the communities of Flin Flon, Lynn Lake, Churchill and other smaller centers. This rail link is critical to the economy of northern Manitoba and under its new ownership it will provide the opportunity for new growth and development in the area.