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Crews work in the area of the derailed tanker cars in Lac-Mégantic, PQ, on July 14, 2013.Peter Power/The Globe and Mail

After six months of tough negotiations, Ottawa and Quebec have finally reached an agreement to cover the costs of last summer's train disaster in Lac-Mégantic.

Most of the town's business district was levelled after a runaway train loaded with crude oil jumped the tracks and exploded, killing 47 people.

The two governments will each cover half of the first $50-million that will go to paying for the cleanup and rebuilding of the downtown core. The federal government bowed to Quebec's demands and accepted not to set a maximum on the amount of compensation that will eventually be needed to help Lac-Mégantic residents recover from the tragedy.

"The federal government insisted on setting a maximum amount of compensation. For Quebec, this position was untenable given Ottawa's responsibility in insuring the safety for the transportation of dangerous goods," said the Quebec Minister of Intergovernmental Affairs Alexandre Cloutier.

Quebec criticized the federal government's change in policy regarding financial compensation for human disasters.

The province recalled that before 2008, Ottawa covered as much as 90 per cent of costs. Since then, the Harper government has insisted on reducing Ottawa's contribution in dealing with catastrophes, limiting its share of the costs to 50 per cent.

"The problem that we had was that the federal government wanted to put a ceiling on expenditures and refused to consider some of Quebec's demands," said Minister of Public Security Stéphane Bergeron. "This was the main point of contention during negotiations, but we came to an agreement."

The two governments have not yet estimated the total cost of the Lac-Mégantic disaster. Everyone agrees, however, it will take years – and millions of dollars more in government assistance – before the community recovers from the economic blow and human suffering caused by the catastrophe.