OTTAWA - Canada will boost the minimum insurance for railways hauling oil and set up an additional fund with levies on crude shipments to cover major disasters, under legislation introduced on Friday, two sources familiar with the bill said.
The legislation is in response to a spate of oil-by-rail accidents, the most prominent being the 2013 explosion of a runaway train that leveled the heart of the Quebec village of Lac-Megantic and killed 47 people.
The costs of the cleanup and reconstruction for Lac-Megantic far exceeded the $20 million insurance carried by the Montreal, Maine & Atlantic Railway, driving the railroad into bankruptcy and leaving federal and provincial governments to pick up the tab.
A government official told Reuters last year that Ottawa was considering something loosely based on the Ship-Source Oil Pollution Fund, set up in the 1970s to cover big maritime oil disasters and financed with levies on oil tanker shipments.
The legislation introduced on Friday is entitled "An Act to amend the Canada Transportation Act and the Railway Safety Act."
