The mayor of Churchill, Man., is calling for immediate action to fix the damaged rail line that serves as the only supply route into town, as shortages drive up the prices of food and fuel in the isolated northern community.

The railway collapsed in May, due to a warmer-than-expected spring melt, leaving Churchill residents reliant on more expensive aircraft services for their supply and transportation needs. The federal government has temporarily extended its Nutrition North program to Churchill in order to subsidize the costs, but locals are still reporting exorbitant prices for basic foods, such as $7 for a loaf of bread.

The town is a popular destination for sub-Arctic adventurers, but many summer bookings have already been cancelled due to the rail crisis.

Omnitrax, the U.S.-based railway company that owns the line, says it will not be able to repair the tracks until next spring, and that financial aid will be needed to fix the 280-kilometre stretch of track. However, Churchill Mayor Mike Spence argues the work could be completed in a matter of 45-60 days.

"This is unacceptable," Spence told CTV News Channel on Monday. "We're being held hostage."

Spence says the price of food in Churchill has become ridiculous, with a 4-litre bag of milk selling for $10 and a package of meat selling for $26.

"We shouldn't be dealing with those prices," he said.

Spence says he had a productive meeting with Manitoba Premier Brian Pallister and other provincial officials on Friday, and that he hopes the town and the province can meet with Omnitrax sometime next week.

However, he was also critical of the province's proposal to alleviate the crisis, which involves converting approximately 100 homes from propane heating to hydroelectric heating. The proposal would theoretically cut down on the demand for fuel that can only be brought in by air.

"I think that would be a step backwards," Spence said. "Let's deal with the situation first-hand. Let's get the line up and running." He added once the rail line is fixed, heating and food problems will quickly resolve themselves.

"It needs to happen," Spence said. "Let's get it done."