Alto high-speed rail project could cost more than originally thought: budget watchdog
This 3D rendering shows what an Alto high-speed train could look like. The Crown corporation is overseeing a project exploring a potential high-speed corridor between Toronto and Quebec City. (Alto)Social SharingBuilding the proposed high‑speed rail project between Toronto and Quebec City could cost between $75 billion and $113 billion — higher than some of the official initial estimates, according to a new report from the Parliamentary Budget Office.
Following a request from the Senate finance committee, the federal budget watchdog released a report on Thursday trying to put a dollar figure on the government's controversial Alto high-speed rail corridor, which promises to connect Toronto and Montreal in about three hours.
Alto, the Crown corporation responsible for the major infrastructure project, is also looking at a potential stop in Kingston, Ont.
The Parliamentary Budget Office said based on analysis of international construction experience and assumed characteristics of the proposed Canadian route, the baseline route, excluding Kingston, could cost between approximately $75 billion and $113 billion to construct.
"This range reflects the considerable uncertainty inherent in large-scale rail infrastructure projects," said the cost analysis.
That could be billions more than the official estimates of between $60 billion and $90 billion.
Could the Alto high speed rail plan be derailed?
The main drivers of the cost are the tunnels and elevated structures used in the project. The budget watchdog said international evidence indicates that each additional kilometre of tunnel will add $169 million to the total cost of this project, while an additional kilometre of elevated structures will add $153 million.
Adding a stop in Kingston, Ont., is expected to increase uncertainty, the report notes, "due to the counter-balancing effects of easier geography for construction, but higher density of regional populations and greater ecological sensitivity."
The PBO estimates that construction would provide a modest economic stimulus.
The report said construction of the Ottawa-Montréal segment would raise real GDP by approximately $1.8 billion in 2029, increasing to $2 billion by 2033, while employment gains would rise from about 4,300 to 9,000 jobs.
The budget officer's office based its analysis on high-speed rail projects in Europe, the U.K. and the U.S. It noted projects in the latter two countries had significantly higher construction costs, likely due to difficulties with land acquisition, permitting, litigation, design changes and project-management weaknesses.
The PBO said recent federal legislation meant to streamline approvals, like Bill C-5, also known as the One Canadian Economy Act, may reduce those risks in Canada.
"The robustness of these provisions before Canadian courts, as well as their inherent effectiveness in targeting sources of cost escalation, will be a key success factor in mitigating significant project risks of the baseline estimate," said the analysis.
Liberal Transport Minister Steve MacKinnon has defended the project as a way to "build a strong economy and create new opportunities for Canadians."
Conservatives call the proposal a costly "boondoggle." The project has also received vocal opposition from Eastern Ontario residents living along the proposed route.
