The Nunavut government’s exclusive maritime carrier is bumping up shipping costs for the upcoming sealift season — particularly through Churchill, Man. — and it’s got some Kivalliq leaders worried.
Nunavut Eastern Arctic Shipping (NEAS), one of few shipping operators in the territory, has a five-year agreement to provide exclusive maritime shipping services for the Nunavut government across the territory.
Sealift rates to Kivalliq communities through the Port of Churchill have jumped up to $485.45 per revenue tonne — a 46 per cent increase on last year’s fees.
It now costs exactly the same amount of money to ship goods from Bécancour, Que., which saw a much smaller price increase, to Kivalliq communities.
For context, the distance between Arviat, Nunavut, to Bécancour is 10 times further than it is from Arviat to Churchill, which makes this all so much more puzzling for Tara Qunngaataq Tootoo Fotheringham, president of the Kivalliq Chamber of Commerce.
“This absolutely makes no sense,” she said. “The world usually works around distance. You charter an aircraft, it’s based on the distance. You charter a boat, it’s based on the distance.”
NEAS says the price jump is just about business.
Daniel Dagenais, the president and CEO of the Quebec-based company, said in the past, the company “grossly under evaluated costs and the volume” of shipping through Churchill.
“We’re a demand derived business. We answer the demand of our customers,” he said.
Dagenais says NEAS only sends cargo outbound from Churchill, and there are fewer stops on the route to Nunavut compared to sailings departing from Bécancour, making it less cost effective. Shipping from Churchill also requires a specialized navigator to bring the ship to the port, which is another cost.
“When we are calling Churchill, we’re not carrying 18,000 cubic metres to amortize the vessel costs … We will be carrying somewhere between 1,000 cubic metres from Churchill, and on a good year, maybe 3,500 cubic metres,” he said.
On top of that, Dagenais says the cost of fuel has increased by nearly 50 per cent because of the war in Iran. While it may not impact this year’s sealift season, Dagenais warns next year’s prices could hurt.
Possible bottleneck
Dagenais said NEAS had two options with shipping to Kivalliq communities.
“Cut the amount of service calls in those regions or significantly increase the price for those same regions,” he said.
It appears both have been affected.
The number of sailings to the Kivalliq region through Churchill has gone down from three to two.
Coupled with the higher fees, Fotheringham worries that could push more people to Bécancour, and thus, creating a bottleneck effect through the Quebec port. That could also affect the Kivalliq region’s relationship with Manitoba.
“Often the first sailing [from Bécancour] has been full with mostly government of Nunavut products,” she said. “So once again we’re back to where we’re fighting for the same amount of space on the ships out of Bécancour and out of Churchill.”
Dagenais said he has no indication that will happen and the Nunavut government agrees.
In a written response, Transportation and Infrastructure Nunavut (TIN) says it does not anticipate the price changes will disrupt its flow of goods, as sealift planning is done well in advance.
“Pricing changes are monitored as part of that planning, and no single port is relied upon exclusively,” the department said.
Port of Churchill significance
Arviat mayor Joe Savikataaq Jr. isn’t surprised that sealift rates are going up — as is the cost of virtually everything else in the world.
“But there are quite a few people who rely on the Port of Churchill and certain construction materials that do go through Churchill and we would want to see more of that,” he said, adding that residents benefit from shorter shipping times through Manitoba.
Earlier this month, Prime Minister Mark Carney said plans to expand the Port of Churchill as part of a trade corridor through northern Manitoba are a top priority, and Kivalliq mayors feel the same way.
“In fact, a year ago, the Kivalliq mayors made a resolution to urge the government to use the Port of Churchill more for any Kivalliq-bound sealift,” Savikataaq said.
The Arctic Gateway Group, which owns and operates the Port of Churchill, said there was a “minor two per cent increase to port costs to adjust for inflation” but that’s just a fraction of NEAS’ price increase.
“We are engaging directly with NEAS, as well as the government of Nunavut, to better understand these changes,” said Chris Avery, president and CEO of the Arctic Gateway Group.
TIN said “established eastern ports” like Bécancour are commonly used by the Nunavut government, but it does consider the Port of Churchill to be of “strategic importance.”
“Churchill continues to be considered alongside other ports based on operational needs, capacity, and value. The government of Nunavut’s approach is to maintain flexibility across available ports to ensure reliable delivery of essential goods to Nunavut communities.”
