Quebec Demands CP Railway Help Pay for Disaster Clean-up

August 16, 2013

The Canadian province of Quebec has ordered Canadian Pacific Railway Ltd to help pay clean-up costs after a train disaster that killed 47 people and said on Thursday the company has no choice in the matter.

The disaster, North America’s deadliest rail crash in two decades, destroyed the center of the Quebec town of Lac-Megantic last month after a runaway oil tanker train derailed on a curve and exploded. Crews are still cleaning up the 1.48 million U.S. gallons (5.6 million liters) of oil that spilled.

“Let’s be clear. Under the law on the quality of the environment, the minister does not ask for or suggest compensation … he orders it. It’s not optional,” Quebec Environment Minister Yves-Francois Blanchet said in a statement e-mailed to Reuters.

But Canadian Pacific, which transported the oil as far as Montreal before handing the cargo over to a smaller operator, had a different view.

“As a matter of fact, and law, CP is not responsible for this clean-up. CP will be appealing,” said spokesman Ed Greenberg.

Quebec added CP, Canada’s second largest rail company, to a legal list of companies it is ordering to help fund the clean-up and decontamination of Lac-Megantic. The train was operated by Montreal, Maine & Atlantic (MMA), which filed for bankruptcy protection last week.

Quebec said CP was hired to transport the tanker cars of oil and had done a deal with MMA, which ran the rail line that passed through eastern Quebec.

“Our duty is to do all we can to ensure that the firms responsible for this accident bear the costs linked to the clean-up and decontamination,” Blanchet said on Wednesday.

Canada said on Tuesday it would shut down MMA on August 20, saying the firm did not have enough insurance.

In a court filing, MMA said its insurance covered liabilities up to C$25 million (US$24.2 million), while clean-up costs could exceed C$200 million [US$193.74 million].

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