Toronto-Quebec high-speed rail project could cost $150-billion over 40 years, document shows

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An internal document obtained by The Globe and Mail shows the full cost of a high-speed rail line from Toronto to Quebec City is estimated at about $150-billion once four decades of operating and maintenance expenses are included – a figure that is well above the range regularly cited by federal officials.

Alto – the Crown corporation responsible for the massive infrastructure project – says the high-speed rail line will cost between $60-billion and $90-billion. The organization has said a more precise cost estimate will be released as the project is advanced.

That public cost range has routinely been used in comments to the media and is clearly stated in a question and answer section on Alto’s website. The answer does not distinguish between the project’s capital costs and its operating and maintenance costs.

The internal figures also show the Crown corporation expects fare revenue to more than cover the project’s operational expenses.

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As the prospect of Canada building a high-speed rail service has come closer to reality, the project has faced growing opposition to its cost and potential route, including from Conservative Leader Pierre Poilievre, who has pledged to cancel it if he becomes prime minister, and from local and provincial lawmakers in Eastern Ontario concerned about the effects of the rail line on their rural communities.

Alto has only occasionally referenced the additional spending that will be required to operate the train service once it is constructed, but has never released an estimate of such costs, nor has it ever publicly released an estimate for its expected revenues.

However, a September, 2023, briefing document prepared for the Crown corporation’s chief executive officer provides a more detailed cost breakdown, covering a 40-year period.

For “infrastructure capital,” the estimated cost is $83.5-billion, which is within Alto’s publicly cited range of $60-billion to $90-billion.

The briefing document then lists two other cost categories: Rolling stock is projected to cost between $2-billion and $2.2-billion, while “operating and maintenance” is estimated to cost between $62.6-billion and $67-billion.

Combined, the document says its total ROM – or Rough Order of Magnitude – estimate is for the project to cost between $148.1-billion and $152.7-billion.

It also says total projected revenue for the high-speed rail system is $105-billion over the 40-year period.

The figures are contained in a document titled “Technical Briefing DRAFT.” At the time, the Crown corporation was called VIA HFR-VIA TGF Inc., in reference to earlier plans to develop high-frequency rail, rather than high-speed rail. At the time it was prepared, the government was still weighing both options, and the briefing note included comparisons between high-frequency and high-speed rail. The Crown corporation was renamed Alto early last year when then-prime minister Justin Trudeau announced that the project would focus on high-speed rail.

Versions of the document were released late last year under access to information laws, but the key financial figures were redacted.

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The Globe reviewed an unredacted version of one of the drafts provided by a source. The Globe is not identifying the source as they were not authorized to share the information.

The project envisions about 1,000 kilometres of dedicated passenger rail that would allow electrified high-speed trains to travel at speeds of 300 kilometres an hour or more. It promises to cut travel times along the corridor by about half.

Current Via Rail passenger trains are technically capable of travelling at speeds of up to 200 km/hr, but are generally limited to 160 km/hr because of track regulations.

Parliament approved legislation in March that granted the federal government new powers to expropriate land along the proposed high-speed rail route.

Alto held consultations earlier this year on the potential route for the project and is planning to release a more specific proposed route this year for the Ottawa-to-Montreal segment, which it is proposing to build first.

Alto has said construction could begin in the 2029-30 fiscal year, if the project receives final cabinet approval before then.

In an interview, Alto president and CEO Martin Imbleau said the 2023 document was a rough “desktop analysis.” He said cost estimates have since been revised and will be further updated and released publicly next year.

He said it is common for large projects to confirm the parameters of their capital plan before announcing estimated operating costs.

Nonetheless, he said the 2023 figures are broadly in line with Alto’s statements that revenue will exceed operating costs.

When asked if Alto has avoided releasing its operating cost projections for public relations reasons in order to keep the total project cost lower, he strongly rejected the question.

“Absolutely not. Absolutely not. If you look at that deck, if we had made public the information in that deck, I wouldn’t mind,” he said, pointing to the revenue figures outpacing operating costs. “I’m not a bullshitter on the PR stuff.”

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Alto’s community consultations earlier this year inspired some rural residents along the proposed route to organize protests and online campaigns raising concerns about the project’s cost and impact on affected residents.

One such group, the ALTO HSR Citizen Research Initiative, is led by volunteers with private sector and academic backgrounds.

Andrew Hyett, a geologist and former Queen’s University researcher who helped produce a financial analysis of the project for the group, said the government’s sales pitch glosses over the global trend of megaprojects costing more than originally planned.

“I think there’s a lot of strategic misrepresentation going on,” he said in an interview. “There isn’t really a business case.”

The group released its own cost estimates earlier this year, predicting capital costs would reach $143-billion after factoring in cost increases that can be expected based on international experience. The group has also projected that maintenance would cost $1.27-billion a year and operations would cost $700-million a year, for a total of about $178.8-billion over 40 years, which is higher than the internal federal projections.

The group’s reports also criticize Alto’s ridership projections as overly optimistic based on the Toronto-to-Quebec City corridor’s population.

Mr. Hyett said his group supports more modest improvements to passenger rail in the corridor, rather than full high-speed rail.

Alto recently released a report outlining its economic arguments in support of the project.

The report claims the project will increase Canada’s GDP by 1.1 per cent, or $24.5-billion, a year through productivity gains, expanded labour markets, stronger international tourism and new housing units built around train stations.

The report also said the rail project will create approximately 50,000 jobs during construction and more than 5,000 ongoing jobs during operations.

Alto estimates that ridership will reach 24 million passengers a year by 2055 and up to 43 million by 2084.

For context, the report said ridership on the existing Via Rail service has declined from eight million passengers a year in the 1980s to about 4.4 million in 2025.

The report said Via’s current ridership levels are low because of the structural limitations the service faces as it shares track with a growing volume of freight traffic.

It also said incremental investments, or the previously proposed high-frequency rail service that would run traditional passenger trains on dedicated tracks, are not the answer.

It said high-frequency rail would carry a capital cost of between $45-billion and $75-billion, yet would only generate one-fifth of the economic benefit of high-speed rail.