Just a week after promising to cancel Pickering airport, Canada’s Liberal government dropped another infrastructure announcement that was thin on reasoning and light on details: a huge 3.9 Billion dollar taxpayer-funded paper chase for the design and analysis of an HSR (High-Speed Rail) line to link Toronto, Ottawa, Montreal and Quebec City.
Critics argue these cities are already adequately served by air travel, which is faster, cheaper, and safer than the proposed HSR system. Worse yet, it pushes aside an HFR (High-Frequency Rail) project that makes more sense. By 2050, when the HSR is expected to be completed, air and ground transportation are projected to achieve net zero carbon emissions, rendering the HSR’s environmental benefits moot.
The howls of protest from the conservative party, likely to form Canada’s next government in only a few months, are deafening. HSR can and has worked in other parts of the world, but Canada has unique population density, climate and geographic challenges. This appears to have been forgotten in a rush to build a “legacy” megaproject. If built, this HSR appears set to be obsolete before it is completed, a monumental waste of tax dollars.
From the moment of the announcement, questions about the process, potential conflicts of interest and calls to justify the project went unanswered. With parliament prorogued, and the key politicians involved not planning on running for re-election, no answers were forthcoming.
What are the major concerns of transportation experts and opposition politicians?
A Bait and Switch rewarding a chosen few?
According to an industry insider who wishes to remain anonymous, this announcement resembles a bait-and-switch tactic. The RFQ originally sent out by the federal government was for High-Frequency Passenger Rail (HFR). How did this turn into High-Speed Rail (HSR) expected to cost thirty times as much to build? Several potential bidders with experience in high-speed rail chose not to bid on the project when it was initially announced as a slower, much smaller High-Frequency Rail (HFR) project. It is unclear whether lawsuits regarding the bidding process will be filed, and whether the bidding process will be reopened.
A huge cost with no return
Cadence, a consortium of Quebec-based transportation companies, will co-design, operate and maintain the project for ALTO (a new crown bureaucracy). The $3.9 billion dollar contract is just for the design and analysis. After the paper chase is completed in 4 to 6 years, the project will then be built in sections and not completed until the 2050s. The original Canadian Pacific Railway across all of Canada only took 4 years to build!
Will the taxpayer be on the hook for the total $90 billion cost of the project? Will it then require subsidies to operate? The answer to both questions is YES, and in large amounts.
The 2015 Via Rail report to Parliament stated, that while HSR would be technically possible even desirable, it would not be financially viable. The report states that public investment amounting to 75% of the total project costs would be required. The new project is expected to be five times more expensive than the one VIA declared not worth the money! This is before cost overruns and corruption issues such as those found by the Charbonneau Commission in Quebec’s construction sector in 2015.
For reference, the VIA Rail report mentions the cost for HSR at that time to be $18.9 billion to $21.3 billion in 2009 dollars.
VIA Rail concluded that HSR was not viable and proposed proceeding with HFR (High-Frequency Rail) Toronto-Ottawa-Montreal-Quebec City for an estimated project cost of $3 billion. The HFR project was to connect smaller communities underserved by aviation that will now not be part of an HSR line.
VIA Rail acted accordingly, completing the feasibility study and the environmental assessments by 2022. Their plan had HFR up and running in 4 to 7 years after their proposal received government approval. Then the project was taken away from them and morphed into a new HSR effort at a cost of $90+ billion to be built over the next few decades.
What magic made the government set aside a feasible lower-cost HFR proposal and replace it with a multi-billion dollar, financially questionable HSR project? Note that all previous HSR studies have also highlighted that HSR is not financially viable.
What reward will Canadians get for diverting hard-earned tax dollars to a single massive rail project? According to the Prime Minister the project could create 51,000 construction jobs and $35 billion in annual economic activity. But, unlike Pickering airport and its industrial park, no details have been provided on how this $35 billion will be created. An article in the Toronto Star (February 27) refers to a C.D. Howe analysis that says the annual benefits are at best only $450 million a year, and that is not factoring in capital or operating costs.
The C.D. Howe Institute estimates economic benefits of $15 billion to $27 billion over six decades or a maximum of just $450 million a year.
What about the carbon emissions, noise and safety?
By the time the rail project is completed in 2050, aviation in Canada will have net zero emissions per ICAO (International Civil Aviation Organization) net zero road map. Construction of an all-electric HSR will be a carbon-intensive act with no operational emissions advantage over net zero aviation. HSR will create noise and safety issues ALONG A 1000-kilometer route on the ground every day. Unlike high-frequency rail, HSR will blast through communities on its route stopping in only a handful of them. Local opposition can be expected to be intense along this route. In comparison, Aviation will zip silently overhead, the cornerstone of an efficiency-driven global net zero emissions economy.
What will be Sacrificed?
In the absence of financial details, the ALTO project looks like a huge drain of tax dollars that will suck funding away from many other infrastructure priorities across the country. Will Nav Canada get the $1.5 Billion it needs to upgrade its aging radar system? Will SOAN (Southern Ontario Airport Network) see the billions in government investment it expects in airports at Hamilton, Waterloo and Pearson? This public Investment is required to replace the private investment blocked from building Pickering Airport. What about funds for Canada’s housing and healthcare crisis or supporting universities and defence?
Even if the capital cost is written off, will passenger rail be subsidized like VIA rail is today? Without subsidies can a train ticket be cost-competitive with low-cost regional aviation, or even self-driving taxis technology expected by 2050?
New passenger rail service between a handful of cities will not reduce passenger aviation demand enough to warrant cancelling Pickering Airport or other aviation infrastructure projects. Even if it had an impact, why stop private Investment in a new airport and industrial park that would create 60,000 jobs and $12 billion in annual economic activity?
Did regional politics and lobbying overwhelm good governance?
Centrally run economies (such as China) use heavily subsidized HSR to shift economic growth between regions. After sacrificing the competitive advantage of a second airport, will the Toronto region see any of that economic benefit? Or is the idea to shift economic growth and activity from Toronto to Montreal?
For-profit aviation is already servicing passenger and high-value cargo traffic between the cities on the planned route of the new rail line. How will a passenger rail service taking three times as long as an airline create new economic value? Can HSR compete against new high-efficiency aviation technology expected to half ticket prices by 2050?
Did Air Canada, a member of the winning HSR consortium, demand Pickering Airport’s cancellation as a condition of participating in the rail project? Stopping Pickering airports construction will remove significant future competition from low-cost airlines. This will enable higher pricing by Air Canada at Toronto Pearson Airport and could make an HSR to Toronto more economically viable.
Is Air Canada in a conflict of interest?
The consortium awarded this mega project includes Air Canada. Considered the 800 lb gorilla in Canadian passenger aviation, Air Canadas operates hundreds of flights daily from Toronto Pearson, Ottawa and Montreal Trudeau Airport. Air Canada is famous for opposing new aviation infrastructure development in Toronto that could enable competition. The best-known example is its opposing lengthening of the runway at Billy Bishop Airport. This stopped Porter Airlines from operating new CSeries jets.
How does expanding into high-speed passenger rail fit into Air Canada’s business model? Is this a gravy train exercise doomed to fail or is this a way for Air Canada to enhance its passenger aviation dominance?
Timing is not the only link between Pickering Airport and the HSR project. Squeezing aviation infrastructure across the region to keep air ticket prices high may be the only way to make the project even remotely justifiable.
Will this High-Speed rail project survive the analysis phase?
There is no indication that anything has changed from the last attempt to build a High-Speed Rail project in Canada. 2025 was supposed to be the year an HSR service began operations between Toronto and London Ontario. Announced by the Ontario government, a careful review by consulting group Steer Davies Gleave (November 2016 – HFR Toronto – Windsor) stated that HSR is only financially viable with the ongoing support of the federal, provincial and regional governments.
In its report to parliament on the future of rail in Canada, VIA Rail stated:
“Most, if not all, scenarios involving the adoption of high-speed rail would require continued government financial commitment, particularly in the form of underwriting the significant capital costs of the project.”
Eight years on, what justifies public investment in an HSR project? Has a new political reality made it acceptable to replace a fast, efficient for-profit passenger aviation system with a slower, state-funded mega rail project?
Two kilometres of rail takes a passenger exactly two kilometres. A two-kilometre runway connects people and cargo to the world.
With air travel expected to double by 2050 and hit net zero emissions, Canada needs more aviation infrastructure, not high-speed rail. We need infrastructure able to support for-profit net zero emissions aviation connecting Canada to the world, not a subsidized state-run mega project connecting only a few cities.
This HSR project appears destined to be nothing more than an abandoned thousand-kilometre-long concrete scar across the Canadian landscape. A $90 Billion-dollar public investment obsolete before it is completed. It appears that the egos, vanity and actions of a few politicians may have placed a “legacy project” before good governance.
References
VIA Rail Canada Inc. and the Future of Passenger Rail in Canada
Canada is getting high-speed rail | Prime Minister of Canada
Alto (high-speed rail) – Wikipedia
Cadence Consortium Selected to Transform Canadian Mobility with the Alto High-Speed Rail Project
High-speed trains in Canada: A timeline
Ontario Advances High-Speed Rail Between Toronto and Windsor | UrbanToronto
Charbonneau commission finds corruption widespread in Quebec’s construction sector | CBC News
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Excellent article, Mark, and a huge amount of research and revelations comparing both modes of travel. We seem to be in a era of bad governance in all directions. I admire your perseverance and consistency.