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The Globe and Mail

CN Rail loses appeal, ordered to pay costs stemming from 2015 derailments

A CN Rail train derailment near Gogama, Ont., is shown in this Sunday, March 8, 2015 handout photo.


Canadian National Railway Co. has lost a bid to overturn an order to reimburse Ontario taxpayers for costs associated with two oil train explosions and spills in Northern Ontario.

The $620,000 bill levied by Ontario's Ministry of the Environment and Climate Change covered expenses from the aftermath of the two 2015 train derailments near Sudbury. A total of 4.3 million litres of crude oil were released in the two crashes, according to the Transportation Safety Board.

CN appealed the order to pay $530,000 of the bill, arguing the costs of government salaries, laboratories and administration were unreasonable or beyond the authority of the province to seek.

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Ontario's Environmental Review Tribunal heard CN's appeal in July and sided with the province. In a decision dated Oct. 6, the tribunal said the costs levied against CN were "reasonable" and "fully recovered from the polluter in light of the work done."

The tribunal noted CN was spending "many millions of dollars" to conduct the "vast majority" of the spills' cleanup. "This was not a case where the [provincial government] itself was carrying out the clean-up," the ruling said. "Rather, the [government] was overseeing and monitoring the clean-up efforts in its regulatory capacity under the Environmental Protection Act and liaising with the public and other relevant agencies."

Both fiery train derailments, which occurred in the same vicinity, were caused by track problems. The Feb. 14 derailment was caused by a failed rail that had undetected cracks. The second, on March 7, was caused by a botched rail repair that was made a few days earlier, according to the TSB. The trains were 94 and 100 tank cars in length, hauling crude to the Valero Energy Corp. refinery in Levis, Que., from Alberta.

Patrick Waldron, a CN spokesman, said the company is reviewing the decision.

He said CN has spent $35-million cleaning up the river and surrounding area fouled by the March 7 derailment, and the work continues. "We remain committed to the full cleanup of the site," Mr. Waldron said by phone.

The Minister of Environment did not immediately respond to an interview request on Thursday.

Among the costs CN disputed was $180,000 to test water toxicity. The railway's lawyer argued the results of the lab work had no effect on the cleanup because CN was relying on its own testing and those results were available more quickly. CN also argued the province was testing water in areas that showed no signs of contamination.

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The province argued the sampling was needed to assure the people in a region who depend on tourism and fishing that the water was safe to drink. The province denied CN's claim the testing was conducted as a "public relations" exercise.

CN is Canada's largest railway, with 32,000 kilometres of track in Canada and United States. In 2016, its profit was $3.6-billion and sales were $12-billion.

The Mattagami First Nation has sued CN for the environmental damage caused by both crashes.

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