Ottawa finally thinks big on high-frequency rail in Quebec City-Toronto corridor

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Ottawa finally seems serious about modernizing passenger-rail service in the Quebec City-Toronto corridor, with plans to introduce faster trains on dedicated tracks advancing to the request-for-proposals stage of Canada’s biggest transportation megaproject in decades.

The federal government last week selected three consortiums to submit proposals to build and operate a high-frequency rail network that would slash travel times in the Montreal-Ottawa-Toronto triangle by as much as a third. A winning bid will be chosen in mid-2024.

What’s not to like? After decades of false starts and shelved high-speed-rail feasibility studies, procrastination appears to have finally given way to determination amid the pressures of climate change and the continued service deterioration on Via Rail.

Unfortunately, the sticker shock of a project that would cost tens of billions of dollars threatens to derail the High Frequency Rail (HFR) dream before it ever leaves the station. And even if it does, rail advocates worry that Ottawa is privileging a grandiose scheme instead of making more modest, short-term improvements to Via’s system.

“The government made a wonderful investment in new trains in 2018, but it has done little to make the network better to use these trains more efficiently,” said Transport Action Canada president Terry Johnson of the 32 modern Siemens trainsets Via bought for about $1-billion. The trains cannot run at maximum speeds because of the increasingly congested tracks Via shares with freight operators, which have right-of-way over passenger trains.

Federal cabinet minister Pablo Rodriguez said last week the HFR project envisioned by his government is “four to five times bigger” than Montreal’s Réseau Express Métropolitain (REM) light-rail transit system, the first leg of which is set to begin service on July 31. That would put the price tag for HFR at $30-billion to $40-billion, an estimate neither Mr. Rodriguez nor Omar Alghabra (who is being replaced as Transport Minister in a cabinet shuffle on Wednesday) dared confirm. Some experts think it could be even higher.

Ottawa has asked each consortium to present two options: the first would involve running trains at about 200 kilometres an hour along the entire network; the second would allow for higher speeds on certain segments. While the option of a European-style high-speed rail system seems to have been ruled out – because of the cost of infrastructure needed to avoid grade crossings – the scale of the HFR project has expanded dramatically since Via first proposed it in 2015.

One major cost escalator involves figuring out how to provide HFR service to downtown Montreal. Ottawa has insisted on a route along the north shore of the St. Lawrence River from Quebec City with stops in Trois-Rivières and Laval. But the century-old tunnel under Mount Royal that provides access to Montreal’s Central Station from the north is reserved exclusively for REM trains.

The REM’s developer, CDPQ Infra, the infrastructure arm of Caisse de dépôt et placement du Québec, initially promised that the tunnel would accommodate both REM and HFR trains, but that proved technically unfeasible.

Now, CDPQ Infra is a member of the Cadence consortium (with SNC-Lavalin SNC-T, Systra Canada and Keolis Canada) bidding on the HFR project. Cadence must either propose building a new tunnel for the HFR project (at a huge cost) or a separate Montreal train station outside the downtown core (a suboptimal solution that excites no one.)

Cadence’s bid could also be threatened by the dicey political optics of Ottawa awarding a multidecade contract to build and operate an HFR network to a private consortium that includes SNC-Lavalin. The company was at the centre of a 2019 scandal involving alleged attempts by the Trudeau government to put pressure on prosecutors to settle corruption charges against the engineering firm related to its activities in Libya.

The two other consortiums selected by Ottawa include a major European state-owned rail operator. Spain’s Renfe has joined Canada’s EllisDon Capital, Britain’s First Rail Holdings and engineering firms Hatch and CIMA+ in a group called Intercity Rail Developers. Germany’s Deutsche Bahn is part of the QConnexiON Rail Partners consortium, along with Montreal-based WSP Canada, U.S.-based Bechtel and Toronto-based private equity firm Fengate Asset Management. Keolis’s parent company, meanwhile, is 70-per-cent owned by France’s Société nationale des chemins de fer français (SNCF) and 30-per-cent by the Caisse.

The irony of Ottawa turning to foreign state-owned train operators to bid on the HFR project is not lost on rail advocates in this country. It demonstrates this country’s underinvestment in developing modern rail expertise here. Deutsche Bahn is also a member of the consortium that last year won a massive contract to upgrade GO Transit’s network.

Unifor, which represents 2,000 Via workers, worries that the HFR project will lead to the privatization of the Crown-owned passenger rail service. The Quebec City-Toronto corridor accounted for 80 per cent of Via’s 3.3 million passengers in 2022. Via lost $170-million in the corridor last year – almost half of its overall operating loss of $354-million. It received $672-million in federal funding to cover its operating loss and capital projects.

If the HFR project materializes, Via would be left with regional routes that are all financial sinkholes. The per-passenger government subsidy on Via’s Toronto-to-Vancouver route topped $1,100 in 2022, compared with about $69 in the Quebec City-Toronto corridor.

Still, with its HFR plans, Ottawa is thinking big. Maybe just too big.