Wednesday, August 21, 2013

Taxpayers on the hook for Lac Mégantic damage: expect the same for pipelines, says economist

From:  Vancouver Observer

by Jenny Uechi

Economist and former ICBC CEO Robyn Allan says the situation of Lac-Mégantic, in which the rail company responsible for the crash was unable to pay for damage costs, is sadly all too common. 
Montreal, Maine & Atlantic lost its license to operate in Canada on Tuesday after the Lac-Mégantic, Québec explosion that killed 47 people and left the Canadian government to pay $60 million since the rail company itself didn't have enough to pay.
While Democratic Rep. Mike Michaud (who is running for governor in Maine) told Railway Age that he finds Canada's decision "concerning" for the future of his state's businesses, it opened up many questions around oil transportation and liability in the event of a disaster. 
In total, the damage caused by the Lac-Mégantic crude train explosion is expected to cost a minimum of $200 million. MM&A's Canadian subsidiary had nowhere even close to that amount: it carries $25 million in insurance, and just $18 million in assets. By default, the federal government, Quebec's provincial government (and now, possibly Canadian Pacific Railway) are left to cover whatever MM&A can't afford.

Public "left on the hook" 

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