A family relies on a rusty sedan to get around. It’s slow and breaks down often. But the family, instead of opting for a practical replacement, puts in an order for a flashy, new model not yet in showrooms.
Sure, the luxury vehicle is significantly more expensive, and it will take years to arrive. But it is sleek and fast, and the family figures the time they will save commuting makes the higher price worth it (despite the loan they will need that will add to their already considerable debts). Besides, many of their neighbours have luxury cars – it’s about time they had one, too.
This in a nutshell is the faulty logic the Liberal government is using to create a high-speed rail line between Quebec City and Toronto.
The idea of a high-speed train that would travel as fast as 300 kilometres an hour, going from Toronto to Montreal in just three hours and seven minutes, has appeal. Its proponents are boasting about the economic and environmental benefits it will bring to this heavily populated part of the country. But the fact that Alto, the Crown corporation in charge of creating the new high-speed rail network, hasn’t released a detailed cost-benefit analysis should set alarm bells ringing.
The project, which is currently in a pre-development and consultation stage and has yet to be approved by the federal government, is estimated to cost $60-billion to $90-billion. Assuming those numbers don’t escalate further (a generous assumption), $90-billion equates to over $5,000 for each Canadian household. The money would likely be borrowed by the federal government, adding to high and mounting debt loads.
Sure, a high-speed train would be nice, but a closer look at the project shows it’s just too expensive for the problem it solves. And in the meantime, Canadians are stuck with slow and unreliable service, much like the family in their rusty sedan.
Delays and cancellations are displayed on a Via Rail schedule board at Montreal's central station. Over the last decade, the percentage of Via trains arriving on time in the Quebec City-Windsor corridor has dropped.Graham Hughes/The Canadian Press
The sorry state of Via Rail
High-speed rail is a polarizing topic, but one thing nobody disputes is the dismal state of Canada’s current passenger train service, Via Rail.
A decade ago, the percentage of trains in its main Quebec City-Windsor corridor arriving on time was unimpressive: just 71 per cent hit the on-time benchmark, meaning they arrived within 15 minutes of the scheduled time. (The Ottawa-Montreal threshold is 10 minutes.)
But last year, on-time performance in the corridor sank to an abysmal 34 percent, as this first chart shows. The on-time performance of Via’s long distance and regional trains outside the corridor, at 52 per cent last year, was also poor. (Trains outside the corridor are considered on-time if they arrive within 30 to 60 minutes of the scheduled arrival, depending on the route.)
Via trains operate primarily on busy freight railroad tracks, mainly those owned by the Canadian National Railway (CN), as well as on tracks owned by increasingly busy commuter rail services around Toronto and Montreal. The track owners give their own trains priority, so Via often has to pull over to wait for them to pass, causing delays.
In 2024, CN imposed speed restrictions on Via’s new fleet of passenger trains operating in the Quebec City-Windsor corridor, further dragging down on-time performance.Christinne Muschi/The Canadian Press
In October, 2024, CN imposed speed restrictions on Via’s new fleet of trains operating in the Quebec City-Windsor corridor, saying they were not long and heavy enough to reliably activate safety barricades and lights at level crossings. Via says the “arbitrary” speed restrictions aren’t necessary. The issue is currently before the Superior Court of Quebec. A stopgap deal was reached allowing Via trains to travel at constant but slower speeds over longer segments, but it’s still dragging down on-time performance.
The speed restrictions are compounding Via’s ongoing problems. Last fall it said it had to pay $31-million in vouchers for passengers compensation, and ridership has dropped by 2.7 per cent since the disruption started, the first dip since the pandemic shutdowns.
CN is focused on its freight business, and has little motivation to take on liability risks or change its technologies and practices to help Via trains arrive on time. The freight companies have economic heft, given they transport $400-billion of goods a year, and passenger rail makes up just 5 per cent of railway revenues. The regulator, the Canadian Transportation Agency, is currently looking at the overall agreement between CN and Via. It needs to do more to ensure better cooperation – various technical solutions could solve the current speed dispute and get Via trains moving faster.
While the speed restriction issue is solvable, reliability on Via will suffer as long as it doesn’t own its tracks. A new dedicated passenger rail line is needed to improve service – however, a premium high-speed rail link isn’t the only option.
Martin Imbleau, president and CEO of Alto, takes part in a press conference about the next steps for high-speed rail in December, 2025. Alto claims the planned route will boost Canada’s GDP by 1.1 per cent.Sean Kilpatrick/The Canadian Press
The dream of high-speed rail
A majestic video on Alto’s website lays out the promise of high-speed rail. “Imagine a train that brings our lives and cities closer together – a train that creates wealth in Canada’s most important economic corridor,” says the voiceover. The pitch promises Alto will boost productivity and national prosperity, improve access to housing and contribute to reconciliation with Indigenous peoples.
The benefits to travellers and communities are pegged by Alto at around $49-billion over the 60-year appraisal period of the project – less than the $60-billion to $90-billion construction cost projection. But those benefits mostly come from time savings attributed to the faster and more reliable service, as well the value of lower greenhouse gas emissions and reduced automobile operations costs.
Alto also claims the planned seven-stop train route will boost Canada’s gross domestic product by 1.1 per cent, with productivity gains worth up to $35-billion. Not only will construction create employment, but Alto says the high-speed line will boost business efficiency by providing better access to jobs, and will lead to increased investment and housing development. Details on Alto’s site are thin, but it says the train network will boost Canada’s competitiveness and create new business opportunities.
The PATH Skywalk crosses over rows of train tracks near Toronto's Union Station. One of the questions raised by Alto's proposal is whether major infrastructure, like tunnels or elevated sections, will be needed to get into cities which already have dense transit systems.Fred Lum
It all sounds amazing, but it prompts more questions than answers. Time savings are nice, but do they really make us richer? Given most of the stops are in major cities, will Alto really prompt new housing development? Will many people choose to commute between, say, Peterborough, Ont., and Toronto, and will that boost the economy? Will the project foster co-operation with Indigenous peoples by providing jobs, or will land acquisition create new tensions? Will massive tunnels or elevated sections be needed to get into Toronto and Montreal? And most important, will the project provide greater economic benefits than another project with a $90-billion price tag, or by leaving this massive sum of public money unspent?
Alto’s estimates of economic gains seem overly rosy when compared with estimates from the C.D. Howe Institute. The study by Tasnim Fariha and David Jones estimates the economic benefits would be between $15-billion and $27-billion over a 60-year period.
Even the more modest gains estimated in the C.D. Howe study are far from a sure thing. Using methodology typical in transportation projects, much of the benefit is attributed to time savings from increased reliability and satisfaction with punctuality. While these are benefits, putting a dollar figure on them can give the impression that these factors will generate wealth, but it’s not necessarily the case, if the time isn’t used to boost revenue in some way. The study’s figures were calculated assuming Alto’s ticket prices would be the same as Via’s – it warns that if the ticket price is 20 per cent higher, the estimated value of user benefits would fall by around 40 per cent.
The second biggest chunk of economic gains in the study is attributed to “agglomeration effects” – benefits that arise when firms and individuals are located closer to each other. This is believed to improve labour-market matching, and create efficiencies, for example, by having suppliers closer to customers, or researchers closer to innovative industries. While there certainly is value in being connected, these gains are not tangible ones like those the country would see by investing in, say, a new LNG terminal to get energy to market.
In terms of ridership, Alto’s numbers look relatively optimistic. It says its high-speed service will attract 13 times more passengers annually than the current service, reaching 24 million passengers annually by 2055. As a result, it says the money from ticket sales will cover operations and maintenance costs, and unlike Via, it wouldn’t require any government subsidies once it is fully operating.
A Via Rail passenger train makes its way along the tracks in Ottawa. Alto says that unlike Via, it wouldn’t require government subsidies once it is fully operating.Sean Kilpatrick/The Canadian Press
However, a survey from McGill University transportation researchers indicates ridership is likely to be much lower, estimating it would reach 10.48 million passengers after 15 years of service in 2050. The researchers estimate that once operating, the project will require subsidies of around $1.28-billion a year, with the system not becoming self-sustaining until its 44th year.
A subsidy of a public project isn’t necessary a bad thing. The McGill study’s co-author, Prof. Ahmed El-Geneidy, points out that urban transit systems such as the Toronto Transit Commission and Société de transport de Montréal rely on them, and most highways are taxpayer funded – but there needs to be an honest discussion about it. Do we want to spend money luring people away from air travel, where they pay their own way, to take a taxpayer-subsidized rail service?
The projected $60-billion to $90-billion price tag to build the project also requires scrutiny. While it’s admittedly hard to estimate the costs for such a large project at this early stage, the fact that the initial range is so wide is troublesome. It would be no surprise if costs were to escalate beyond $90-billion. An EU audit found that cost overruns and delays were the norm in high-speed rail projects.
A worst-case scenario exists in California, where a high-speed rail line was supposed to be completed in 2020 to connect San Francisco and Los Angeles in fewer than three hours. The cost tripled, and the scaled-back project is now set to connect only two smaller cities by 2033.
Former Prime Minister Justin Trudeau, accompanied by Mr. Imbleau and then-Transport Minister Anita Anand, announced the switch to a high-speed rail plan in February, 2025, a few weeks before he left office.ANDREJ IVANOV/AFP/Getty Images
A more sensible route
The case for Alto is mired in fantasy, but that doesn’t mean Canadians should continue suffering with substandard passenger rail. The Liberal government had been studying high-frequency rail, the less glamorous cousin of high-speed rail, since 2016, until prime minister Justin Trudeau announced the switch to a high-speed rail plan in February, 2025, a few weeks before he left office. (If it moves forward, the project will be built by Cadence, a consortium of private companies.)
Ryan Katz-Rosene, an associate professor of political science at the University of Ottawa, says that once the government decided to build new passenger rail track, it became a slippery slope: “They wanted to make something truly transformative, but that was probably a mistake.”
High-frequency rail doesn’t have the romantic appeal of high-speed rail, but it would greatly improve service at a more reasonable cost. It would still involve building a new track solely for Via, but as it wouldn’t go as fast as high-speed rail, it could handle more curves, allowing more flexibility about where to build the route. High-speed rail is much more expensive to build, as it can’t stop quickly, necessitating tunnels and overpasses to avoid collisions, rather than at-grade crossings. It is also more disruptive for land owners and communities along the route, as there are limited places where the track can be crossed.
In a recent submission to Alto’s public consultation, Prof. Jacques Roy at HEC Montréal and his co-authors say a high-frequency train would use tracks reserved for passenger trains, but mainly within the existing railway rights-of-way, offering a faster and more reliable service than the current system. It wouldn’t reach record speeds, but the high-frequency train would serve more stops along the line at around half the cost of a high-speed train. It could also be built much faster, perhaps in five years.
Prof. Roy is skeptical of Alto’s claim that high-speed rail would cost only 20 to 30 per cent more than high-frequency rail. While he agrees the high-speed option would attract more business travellers, he casts doubt about Alto’s ridership claims, which are partly based on assumptions that population in the corridor will rise 30 per cent by 2041. Given that population growth now is almost flat in Quebec, he doesn’t see that happening.
This second chart shows the estimated journey times between the high-frequency rail and high-speed rail options aren’t that far apart. The high-speed trip between Montreal and Toronto saves one hour and two minutes, when compared with a high-frequency train on a dedicated track. On a shorter trip, like between Montreal and Ottawa, the high-speed train route that will cost billions saves just 19 minutes.
There are lessons to be learned from an earlier experiment in high-speed rail half a century ago. In 1968, CN launched its “TurboTrain,” which in theory could hit 225 km/h, and travel between Montreal and Toronto in just four hours and 10 minutes on the existing tracks. The train cars were short and they tilted, so they could navigate the track’s curves. But the trains suffered from numerous technical problems, and they had to reduce speed at level crossings and wait for freight trains to pass, so were slower than anticipated. The last TurboTrain ran in 1982.
With the government spending $3.9-billion to support early-stage development of a new passenger rail system, it should take an honest look at high-frequency rail on dedicated tracks as an option. There is considerable debate about the cost of high-frequency rail and on how much can be built in existing rail corridors, but this option shouldn’t be ignored.
Leaving Alto as the only option to improve Canada’s passenger rail could result in paralysis. It’s just a matter of time before economic reality punctures the fantasy, and the mirage of supposed benefits dissipates. The project runs a high risk of getting halted before completion. In the meantime, Via is limping along. The fantasies of high-speed rail are diverting attention from fixes that could reverse the decline of the existing passenger rail system.
Like the family with the rusty sedan, Canada needs a practical plan, today, to improve passenger rail not the diversion of a high-speed fantasy down the line.