CN has agreed to pay the Alberta government $18.6 million to settle a claim arising from a fire near Chisholm more than four years ago.

The charred remains of a tractor sit in burned rubble after the 2001 wildfire in Chisholm, Alberta. (CP photo)

The May 2001 fire – which the province alleged was sparked by a faulty train wheel – burned 120,000 hectares of forest and destroyed 10 homes, and cost $30 million to battle.

Within a day of starting, smoke had reached Edmonton, 160 kilometres south of Chisholm.

CN will give the government $10 million and spend $8.6 million over the next decade on programs to reduce wildfires in the province, the government said Friday.

CN will also pay uninsured residents of the northern Alberta community, although the government announcement did not mention any specific figure.

The release from the province says the agreement settles a "disputed claim, and the agreement in not an admission of liability or responsibility by CN."

The programs CN will help pay for include measures to reduce hazards in communities along the CN line, a study of wildfires, training of firefighters and support for junior forest rangers.

The money is less than 1.7 per cent of CN's $1.13 billion profit in the first nine months of 2005.