Manitoba’s role as a key location on Canada’s supply chain map is rolling northward as the Prairie province embarks on rail and port upgrades that seek to increase traffic at the deep-water seaport in Churchill, a town on Hudson’s Bay located over 1,000 kilometers north of Winnipeg.
The northern port has been earmarked for $43 million in government funding for repairs to the rail line that connects Churchill to southern Manitoba. Meanwhile provincial and federal taxpayers are putting up another $36.4 million upgrading facilities at the port in Churchill.
Manitoba is home to 1.5 million of Canada’s roughly 40 million residents but its capital city of Winnipeg punches above its weight for freight, as a portion of shipments brought into West Coast ports are transported by rail to Winnipeg to then distributed east and south. The process has helped push Winnipeg’s industrial vacancy rate down to 2.5% in the final quarter of 2024, below Canada’s 3.2% national average, as warehouse rents increased by 6.6% from the previous quarter, according to a Colliers report.
Reopening railway and port
Manitoba's warehouse vacancy rate could drop further if the Arctic Gateway Group gets its way. The indigenous-owned consortium of northern and First Nation communities has big plans for the Port of Churchill, which it acquired in 2018 after floods devastated the rail line and forced the port to close.
“It was a significant weather event but the owners didn’t properly invest in capital maintenance,” said Chris Avery, chief executive of Arctic Gateway, a company headquartered in Le Pas, a 27-hour train ride to the southeast. Avery said that previous owners neglected culverts and allowed beaver dams to proliferate, causing flooding conditions to worsen and forcing the closing of the train track.
“A lot of indigenous communities in northern Manitoba depend on the railway for essential services, food and medical supplies, so our group, with the support of the government, bought back the railway and the infrastructure from the American owners.”
Churchill Port currently handles about 200,000 tons of goods annually, but Avery aims to increase that tenfold. He hopes that icebreakers can free up the sea lanes and allow the port to stay open six months a year rather than just the four months spanning July to October.
Increased traffic at the port could provide a boost to the town of Churchill. The port could be used to send more grain, potash, and other exports to Europe, Africa and the Middle East. Canada seeks to diversify its international trade in the looming shadow of U.S. trade sanctions. Avery said in an interview that a better-equipped port could also allow Canada to assert its northern sovereignty.
The project is still far from being a done deal, however. “I would say we are in the second inning of the baseball game," Avery said. "We are starting to move back to business, the railway is in better condition than it has ever been and we have the technology to maintain it and stay ahead of the repairs.”
Resilient to U.S. tariffs
Increasing trade through the port could help Winnipeg thrive, at a time when other Canadian cities are bracing for a battle against U.S. tariffs. Winnipeg recently ranked as one of the Canadian cities considered least vulnerable to the economic impact of looming American import fees, according to a recent study Winnipeg is seen as largely immune from potential American tariffs as a good portion of Manitoba's exports comprises grain sent overseas to Europe and elsewhere.
While Canada braces for tariffs, there is a relative spirit of optimism at CentrePort, a fast-growing industrial park project in the northwest of Winnipeg that has attracted over 1,000 companies and $1 billion in private investment over the past seven years.
CentrePort, a company headquartered in downtown Portage Ave., is also bullish on the Churchill project.
“The recent investment in the Port of Churchill and Hudson's Bay Rail Line enhances Manitoba's global trade potential, opening northern supply routes and a deep sea port that is two days closer to Europe by ship compared to the Panama Canal,” said Carly Edmundson, president and CEO of CentrePort Canada, in an email to CoStar News.
“Manitoba, and in particular Winnipeg, has long been imagined as a hub of trade and transportation due to its strategic central location,” said Edmundson. "CentrePort Canada is the modern realization of that historical vision, bringing together rail, road and air infrastructure and services to allow for the easy movement of goods in all directions.”
One Vancouver-based supply chain expert believes that many Canadians underestimate Winnipeg's importance in Canada's supply chain. The city remains a prime freight train destination for goods unloaded at ports in British Columbia.
“It makes logical sense to have a central distribution point,” said Dave Earle, president and chief executive of the British Columbia Trucking Association, in an interview. “That is why Winnipeg has a disproportionate share of the trucking industry and that is why places like Winnipeg, Kansas City and Chicago all have massive rail traffic."