Railroad loses Canadian business license
The Canadian arm of the Montreal, Maine and Atlantic Railway has lost its license to do business there after regulators ruled that the company does not carry adequate liability insurance.
The Portland Press Herald reported observers see the decision as a blow to the company’s chances for survival, following on its bankruptcy filing last week. Through those filings, the company revealed that its liability insurance policy is capped at $25 million. The cleanup costs for a July oil tanker crash on the railroad’s line through Lac-Mégantic, Quebec, are estimated at around $200 million.
The paper reported the revocation of the company’s Canadian business license takes effect Aug. 20. Ed Burkhardt, the railroad company’s chairman, told the paper that the decision will likely result in layoffs of roughly two dozen of the company’s employees in Canada.
The paper reported a similar decision from federal regulators in the United States is unlikely as there are no specific requirements about the amount of liability insurance a rail company operating on private tracks must carry.
Burkhardt said MMA does not plan to appeal the ruling of Canadian regulators and is still determining the decision’s impact on the company’s U.S. business.
Chalmers “Chop” Hardenburgh, editor of the trade publication Atlantic Northeast Rails & Ports, told the paper the company isn’t viable with a ban on its Canadian operations in place.
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