High-speed rail link could deliver billions in economic benefits: C.D. Howe report

Prime Minister Justin Trudeau announces a new high-speed rail network for the Toronto-Quebec City corridor in Montreal, on Wednesday, Feb.19, 2025. (THE CANADIAN PRESS/Christinne Muschi)

A high-speed rail link between Toronto and Quebec City could deliver billions of dollars in economic benefits, cutting travel times and boosting productivity, a new report says.

The C.D. Howe Institute study found that the promised line would generate between $15 billion and $27 billion in value for Canadians over six decades.

The biggest chunk — up to a third — would stem from user benefits, namely time savings and greater reliability than Via Rail’s train service, the report authors said.

“If I can travel between Toronto and Montreal in three hours … I’m saving two hours of time. And that can be translated into monetary value,” co-author Tasnim Fariha said in an interview, referring to wages as an example.

Amid a national “productivity crisis,” economic gains would also accrue for those living in the Toronto-Quebec City corridor, with reductions in greenhouse gas emissions and road congestion as added bonuses.

The greater confidence ushered in by a dedicated passenger line with reliable service would also have less tangible benefits.

“Not only am I saving time, but I’m also lowering my stress levels,” Fariha said.

On Wednesday, Prime Minister Justin Trudeau announced the next phase of a rapid rail project hatched in 2021, announcing trains will travel up to 300 km/h on the emissions-free network. The plan propels it well into “high-speed” territory and beyond the “high-frequency” rail system that was the initial goal.

Pledging $3.9 billion over six years for planning and design, the government said the tracks will span about 1,000 kilometres with stations in Toronto, Peterborough, Ottawa, Montreal, Laval, Trois-Rivières and Quebec City.

The new rail system, to be known as Alto, would ferry travellers from Montreal to Toronto in just three hours. The government aims to iron out specifics, including the precise route and where the stations will sit in each city, before 2031.

A summary by the Via Rail subsidiary overseeing the project — it estimates the cost at $60 billion to $90 billion — put its benefits at $24.4 billion per year. That figure is far greater than the $450 million in annual benefits forecast by the C.D. Howe report.

Fariha said her assessment focused on the biggest areas of economic gain, and that different methodologies and study scopes could yield drastically different estimates.

She and co-author David Jones zeroed in on economic benefits based partly on ridership forecasts from Via Rail, rather than furnishing a full cost-benefit analysis.

Launched last summer and published on Friday, the 31-page report examined the two options that Ottawa had asked bidders to consider: a high-speed rail line and a slower, high-frequency line, which the study found would yield less value — between $11 billion and $17 billion.

The government announced on Wednesday it had selected Cadence, a consortium of companies, to co-design, build, finance and run the rail megaproject. Cadence includes CDPQ Infra — the division of Quebec’s pension fund manager is also building Montreal’s light-rail system, known as the REM — as well as AtkinsRéalis, Air Canada, Keolis, Systra and SNCF Voyageurs.

Bold plans and promises for high-speed rail lines in Canada stretch as far back as Pierre Trudeau’s government. So far, none have come to pass. And they have a tendency to arrive in the lead-up to an election.

Some two dozen studies, market assessments, special reports and task force papers have been carried out since 1984, according to the High Speed Rail Canada platform, an online resource on the subject.

This report by The Canadian Press was first published Feb. 21, 2025.

Christopher Reynolds, The Canadian Press