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Without railway, Lac-Mégantic businesses face challenging recovery

A press conference with Lac-Mégantic’s mayor, Colette Roy-Laroche, takes place next to the railway tracks in the Quebec town on July 14, 2013.

Peter Power/The Globe and Mail

Looking toward the rail track near his factory, the CEO of North America's largest producer of particleboard shrugged his shoulders with resignation. Tafisa CEO Louis Brassard foresaw a grim future for the Montreal, Maine & Atlantic Railroad, which hauled his company's products until the deadly derailment on July 6.

"We are planning for the worst, we are planning for the railroad never opening again," said Mr. Brassard, which would end 21 years of shipping the wood for IKEA bookshelves and kitchen cabinets on trains running through town.

The challenges facing the MM&A are many. The short-haul railway has never turned a large profit. Locals are hostile to it returning. Its customer base has shrivelled. A crime scene could linger for months at the centre of its rail network. The company could also be on the hook for millions in reconstruction, cleanup costs and lawsuits.

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Company chairman Ed Burkhardt has assured local residents and businesses that the railway has enough insurance to survive and will dedicate its resources to helping rebuild. Mr. Brassard, the head of the city's business elite, is doubtful.

"There is serious concern about the MM&A, especially after they announced layoffs. How much cash can they pump into Lac-Mégantic? How much do they have to spend? There are many question marks," Mr. Brassard said.

With 350 employees, Tafisa is the region's largest private employer and one of MM&A's largest customers. It sits at the centre of an expansive industrial park that grew due to access to seemingly endless forests and the nearby railway, and its capacity has quadrupled in recent years.

In 2006, one of the company's lines exploded in what had been one of Lac-Megantic's worst disasters. This time, while his company lost no employees and suffered no damage, Mr. Brassard said recovering from the derailment and subsequent explosions that killed 47 in the town is his greatest challenge as CEO.

To cope with a railway bottleneck unlikely to clear for months, if ever, the company is rushing to build a trucking network to send its finished particleboard and melamine across North America. However, a file folder sits on Mr. Brassard's desk marked: Plan B – Logistics.

Only hours after the fires and explosions that decimated a wide swath of downtown Lac-Mégantic were extinguished, the town's business leaders and mayor hatched a plan to resume rail service as quickly as possible. Using a spur running to the industrial park, trains could avoid the devastated downtown and serve factories from the east.

That plan, which Mr. Brassard said was largely a creation of the railway, was quickly quashed. The Quebec provincial police refused to endorse the proposal, citing soil contaminated by spilled oil and chemicals.

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Despite the setback, local leaders say the plan is discussed daily and moving forward. It could be unveiled in days.

"I'm anxious to hear what she has to say," a smiling Béland Audet said as he left his logistics company to discuss the idea with Quebec's Minister for Industrial Policy, Élaine Zakaïb. The head of local transportation giant Logi-Bel then planned to tour the site of the proposed new spur.

Along with Mr. Brassard and Mayor Colette Roy-Laroche, Mr. Audet is one of the strongest voices pushing to return limited rail service to the town.

The new plan, according to a map emblazoned with Lac-Mégantic's municipal logo and shared with The Globe and Mail, is to reopen an old industrial spur south of the evacuation zone. The spur was abandoned years ago when a new sports centre was built, and the tracks were removed. However, Mr. Brassard says rebuilding the short stretch of rail would be "easy and worth it."

Ms. Zakaïb is only the second high-level official to have been briefed on the audacious backup plan favoured by the town's leaders. Earlier this week, newly minted federal Transport Minister Lisa Raitt was also briefed. The minister was "receptive," according to people at the meeting.

With maps all over his desk, Mr. Brassard made the case for rerouting his company's traffic towards the East Coast of the United States. "It's quite the detour," he said, pointing at possible routes, but the savings from shipping by railway over long distance is worth it.

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With many unwilling to consider a train running through town after the disaster, Mr. Brassard says he expects friction. He understands: Since the accident, he says, he is awakened at night by the sounds of trains passing his home in Sherbrooke, Que.

While the mayor's office will only confirm that the plan is being analyzed, Ms. Roy-Laroche has refused to even publicly state that she is aware of the proposal. Business leaders are public and bullish about their plan.

Mr. Brassard says the Sûreté du Québec will redraw the yellow zone limiting access around the disaster site within days, allowing construction work to begin.

However Mr. Brassard admits to one flaw in the proposal: "You need MM&A to run this plan, you need a rail company."

Mr. Burkhardt was in meetings all day Friday with lawyers and insurance agencies. According to his assistant, the chairman has barely slept since the incident 14 days ago, working daily to save his company. Mr. Brassard's plan doesn't count on the railway's survival.

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About the Author
Ontario legislative reporter

Based in Toronto, Justin Giovannetti is The Globe and Mail’s Ontario legislative reporter. He previously worked out of the newspaper’s Edmonton, Toronto and B.C. bureaus. He is a graduate of Montreal’s Concordia University and has also worked for CTV in Quebec. More


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