Lac-Mégantic's economic recovery a long, costly road

Several months after Lac-Mégantic's downtown core was destroyed by fire, businesses are once again opening their doors. But the clean up and rebuilding of the town's business will take time - and money.

Government funding helps in cleanup of town devestated by 2013 train derailment

An aerial view of the tragic train crash at ac-Mégantic, Que. shows the extensive damage done to the town's downtown core. Federal and provincial funds are being used to clean up oil contamination and relocate business. (Transportation Safety Board Canada)

Months after Lac-Mégantic's downtown core was destroyed by fire, businesses are once again opening their doors.

Seventeen businesses burned down in the fire caused by exploding crude oil tanker cars, according to Emmanuelle Fredette, director of Commerce in Lac-Mégantic, Que.

Follow the money

A series on 2013 federal spending announcements by students from the Carleton School of Journalism.

Read more from the series and explore the data here.

"These businesses were either completely destroyed or inaccessible,” she said.

About 600 people lost their jobs, but many were able to find temporary work within a few months, Fredette said. 

Lac-Mégantic has found or built new condos for the business owners who lost their work spaces in the fire, she said. All businesses expect to be back up and running by April 2014.

The government of Canada says it has given $195 million to the community that lost 43 residents in last July's tragedy. Of that money, $35 million comes from the Economic Development Agency of Canada for the Regions of Quebec, for rebuilding the town’s infrastructure.

An analysis of publicly announced grants from this agency found that $31 million was handed out in Quebec in 2012 and 2013. Most grants were for small infrastructure projects, such as community centres or local festivals. The second biggest grant was a $2 million loan to Nordia Inc., a company that runs customer service centres in several locations in Quebec. 

Lac-Mégantic is a much larger, unexpected investment, and the economic and environmental recovery it is expected to help spur will take years.

Several hundred thousand litres of oil spilled onto the soil and into the town’s sewer system. More than 100,000 litres spilled into the nearby Chaudière River and into the lake for which the town is named, according to a report published by Quebec’s environment department.

The economic development fund will grant up to $20 million in aid for the reconstruction, and up to $10 million in direct funding to businesses and non-profit organizations.

The federal government is working closely with city officials to decide which projects should be financed first, said federal Economic Development department spokesman Samir Goulamaly.

“Our team is working with small and medium businesses…to submit a project,” he said.

The government is also giving Lac-Mégantic $5 million in investment funds to be administered by one or more local organizations.  There will be discussions with local officials before deciding who will be in charge of the fund, Goulamaly said.

Relocating the core

Between the fire and the oil contamination, the town cannot rebuild on the site anytime soon, according to city spokesperson Louis Longchamps.
A grocery store and a pharmacy are planned for the new projected downtown area of Lac-Mégantic. (CBC)

So they are planning to build a new downtown in the southwestern part of the city. That means tearing down the Notre-Dame-de-Fatima church, to make way for a Metro Plus grocery store. A few other buildings will also be destroyed. 

"Half of our downtown area just burnt down, and there’s crude oil everywhere. It’s impossible to go back there and rebuild," he said.

"So we want our stores and a downtown area where you can shop and go to the restaurant as fast as possible."

It is too early to know exactly how much the fire has cost Lac-Mégantic, Longchamps said. The current estimate for cleanup is $200 million.

Veronique Hynes is a 4th-year journalism student at Carleton University in Ottawa. This story is part of a project by the Carleton School of Journalism on federal spending announcements in 2013.