Churchill's main retailer to stop subsidizing food prices on June 25

Churchill's main retailer is calling on the federal and provincial governments to take action to help the northern Manitoba town, more than three weeks after rail service to the community was suspended.

Starting Sunday, the North West Company says it will no longer subsidize grocery prices to cover the increased cost of shipping by air, meaning already-high food prices will go up at the community's Northern Store.

"In good faith, and to protect our customers as long as possible, we have not passed through any of the additional costs we are incurring to ship products by air instead of rail," said president Edward Kennedy in a Wednesday news release.

"That works out to $700,000 on an annual basis and is not sustainable, nor should it be expected to be."

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The town of 900 people, about 1,000 kilometres north of Winnipeg, relies on the Hudson Bay Railway for delivery of essentials including food, vehicles and fuel.

Churchill became a fly-in community when the rail line was washed out in at least 24 spots by flooding in late May. Service isn't expected to resume until winter or even next spring, according to Denver-based owner Omnitrax.

Mayor Mike Spence, the North West Company and Winnipeg-based distributor Arctic Buying Company called on the federal government to include Churchill in the Nutrition North program, a food subsidy for isolated communities.

It costs about three times as much to ship food by air compared to rail, a spokesperson for the North West Company told CBC News earlier this month.

"The provincial and federal governments have tools they can use right now, including emergency relief funding agreements and food subsidy programs tailored to remote air access communities, which Churchill clearly now qualifies for," Kennedy said in the Wednesday release.

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The company said it will continue to partially subsidize "key food items" such as milk, bread, and some produce and meat in the short-term, and plans to offer a sealift order service to the community as a less-costly alternative.

Federal response

Omnitrax has said the third-party damage assessment of the line that began on Monday could take a month to be completed.

The company called on the provincial and federal governments to contribute to the cost of the repairs.

In a statement to CBC News, a spokesperson with Northern Affairs said the federal department is exploring whether the Nutrition North program can be used to help people in Churchill.

"The health and safety of all northerners is a priority for the government of Canada," the statement reads. "INAC is aware of the situation in Churchill, Man., and we continue to monitor the situation closely."