RCMP said 17 rail cars — some carrying flammable petroleum, ethanol and chemicals — came off the tracks after 4 a.m. within 500 to 700 metres of the village of Landis, west of Saskatoon.
"The spill involved a petroleum product that is not considered highly explosive," Sgt. Grant Rusk said.
"Because of the flammable nature of some of the other rail-car contents, and the proximity to Landis and the school, the decision was made to close the Landis School for the day while the contents of the damaged cars were unloaded."
No one was injured.
Warren Chandler, a spokesman for CN (TSX:CNR), said it was not clear how much oil spilled, but that the oil was concentrated along the right of way of its the transcontinental rail line.
Chandler said some of the cars were on their sides and CN crews were working to clean up the area.
"One of the derailed cars is leaking lube oil," he said from Edmonton.
"CN crews immediately began a process using vacuum trucks to contain and reclaim the leaking product."
The Saskatchewan government said one of the other derailed cars contains ethanol and was on its side, but was not leaking.
Premier Brad Wall said most goods shipped by train move safely across Canada and railways are needed.
But he said the spill is another chance to talk about the benefit of pipelines.
"There is a debate though now that's precipitated by Keystone and by (the proposed Northern) Gateway and maybe by the Energy East pipeline, about what is the safest way to move certain products," Wall said in Regina.
"We think it's an all-of-the-above proposition. We are going to be railing more oil out of this province, that's just the fact of the matter. We're doing it now and frankly doing it efficiently and safely for the most part, again from a statistical standpoint.
"But we need pipelines. We need them and we need to be unequivocal that pipelines are still certainly the best way."
Greenpeace Canada said the derailment was an example of the perils of shipping oil by rail.
"How much longer are they willing to gamble on unsafe rail cars carrying ever-increasing amounts of oil through our communities,” Greenpeace spokesman Keith Stewart said in a release.
Greenpeace and other organizations have called on the federal government to ban the shipping of oil in older tanker cars that have been identified as spill-prone.
The groups also want an independent safety review of all hydrocarbon transportation, including pipelines, rail, tanker and truck.
RCMP said the cars that went off of the tracks were in the middle of the 560-metre-long freight train and no other vehicle was involved in the derailment.
Fire crews from nearby communities put out a grass fire in a ditch caused by the derailment, but police said none of the rail cars caught fire.
The Transportation Safety Board of Canada said it is sending an investigator to the site. The TSB is an independent agency that investigates marine, pipeline, railway and aviation transportation occurrences. It looks at ways to prevent similar incidents, but does not assign blame.
Rogers Communications said the derailment severed cables which temporarily cut wireless services Wednesday morning for many of its customers in Western Canada.
Rogers (TSX:RCI) said service has since been restored.
— with files from Jennifer Graham in Regina
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