Annex D Accessing Funding to Support the Construction of the Lac-Mégantic Railway Bypass Project
- The Lac-Mégantic Rail Bypass Project has accessed $45.5M for the 2024/2025 Fiscal Year for the ongoing project planning and pre-construction activities.
- Included in these Estimates, the project has $207.5M in available funding for 2025/2026 to continue planned project deliverables such as securing the required regulatory approvals and remaining activities to enable the beginning of construction.
- Of the $207.5M available in 2025/2026, $178.3M is for the transfer payments.
- In the 2024-25 Main Estimates, the planned spending authorities for the project was $213M of which, $188M was for the transfer payments.
- The decrease between the 2024-25 and the 2025-26 Main Estimates is predominately due to a slight decrease in the transfer payments planned spending year over year which is the result of a change in cash flow requirements to meet the project’s needs.
- This funding was allocated to continue the implementation of the project, which is the construction of the bypass and dismantling and remediating the existing corridor.
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SUPPLEMENTARY MESSAGES
- On July 22, 2024, TC and the Province of Québec signed a contribution agreement outlining the details of the province’s contribution towards the project (60% from the federal government and 40% from the province).
- The relocation of aqueducts in the municipality of Lac-Mégantic, an independent and concurrent activity to construction funded by TC, will be completed in the Fall of 2025.
- The majority of the Canadian Transportation Agency (CTA) application is in final form. A key last step includes a consultation on the Environmental Effects Evaluation (EEE) from May 16 to June 30, 2025. The EEE is a Canadian Pacific Kansas City (CPKC)-led document summarizing the environmental studies, mitigations, and residual environmental impacts.
- In parallel, the project must also secure additional regulatory approvals such as approvals under the Fisheries Act, the Canadian Navigable Waters Act, as well the Notice of Railway Works under the Railway Safety Act. The Government of Canada continues to work in collaboration with its partners to complete the project as quickly as possible.
UPDATE
Since the signature of the contribution agreement with CPKC, in August 2023, Canada continues to work with the recipient to complete the application to the CTA and begin construction as soon as possible.
A series of public consultations were completed from November 18 to December 27, 2024, on environmental documents required for the CTA application. The consultations were centered on the Groundwater and Potable Water Well Monitoring Plan, the Wetlands Monitoring Plan, and the updated Hydrogeology Report.
TC and CPKC signed a tripartite agreement to hire an Independent Claims Certifier (ICC). The ICC will provide impartial certification of the recipient’s financial information in claims submitted for payment to TC during construction.
SUPPORTING FACTS AND FIGURES
- On May 8, 2024, TC was informed that the Court dismissed the applicants’ request for judicial review, and no appeals were filed, effectively ending the expropriation litigation over the land required for bypass construction.
- Of the $204.9M direct costs (out of total funding of $207.5M) available in the 2025/2026 Fiscal Year, $178.3M can go towards construction costs while $26.6M can go towards other operating costs such as environmental mitigation measures. This amount may be reprofiled to future years based on project needs.
- Construction of the bypass will begin once all regulatory approvals have been obtained, including from the CTA.
BACKGROUND
On July 6, 2013, a train carrying crude oil derailed in downtown Lac-Mégantic, Quebec, causing an explosion and a fire that killed 47 people and destroyed much of the downtown area.
On May 11, 2018, the Prime Minister of Canada and the Premier of Quebec announced the Lac-Mégantic Rail Bypass project, a 12.5 km rail bypass outside of downtown Lac-Mégantic, passing through the municipalities of Frontenac and Nantes. The project also includes the dismantling of the existing line.
The project will be managed by CPKC, which acquired the Central Maine & Quebec Railway (CMQR) in December 2019. CPKC will also own the bypass.
ATIP-PROTECTED BACKGROUND
The Lac-Mégantic Rail Bypass Project received [ Redacted ] in Budget 2017 ($100M), Budget 2022 ($237.2M) [ Redacted ] .
Due to additional requirements from the CTA regarding Indigenous consultations and environmental mitigations measures, the filing of the application has been delayed. This in turn pushes the construction [ Redacted ] .