PBO report assesses costs and economic impacts of Alto’s Eastern Corridor high-speed rail project
The Parliamentary Budget Officer (PBO) today released an analysis of the estimated construction costs associated with Alto's proposed high-speed rail (HSR) project along the Toronto–Québec City corridor.
The analysis is based on cost profiles of high-speed rail projects previously undertaken around the world. Basic geographic realities such as the length of the route and the use of tunnels and elevated structures provide strong indicators of overall construction costs in the majority of projects studied – with the exception of recent projects in the United Kingdom and the United States. In these countries, challenges related to land acquisition, permitting and project delivery led to significantly higher costs.
The PBO analysed the geography of the route initially proposed by the government, who estimated construction costs between $60 billion and $90 billion. The PBO estimates construction of this route to cost between $75 billion and $113 billion.
The PBO analysis assumes that planning and construction for the Alto route proceed in a manner consistent with past European high-speed rail projects, rather than the UK or US experience. The government adopted legislation with Bills C-5 and C-15 that aim to mitigate the types of governance, legal and project management risks seen in the UK and US.
“While Canada’s legislative framework is intended to avoid the major cost-overrun drivers we’ve seen in comparable American and British projects, Canada’s route geography has some significant cost escalators -- most notably tunnelling in and around Montreal, and the complexities of the Canadian Shield portion,” said Annette Ryan, Parliamentary Budget Officer.
Construction of the initial Ottawa–Montréal segment is expected to provide a modest economic stimulus during the construction phase, currently planned to start in 2029. The PBO estimates that real GDP would increase by approximately $1.8 billion in 2029, rising to $2 billion in 2033, while employment gains would rise from approximately 4,300 jobs in 2029, rising to 9,000 jobs in 2033.
"Major infrastructure projects involve significant investments and long-term commitments. This report provides Parliament with an independent assessment of the potential construction costs and economic impacts associated with Alto's high-speed rail project, as one of the largest infrastructure projects ever proposed in Canada," added the Parliamentary Budget Officer.
This report is the first of a two-part assessment of the viability of the proposed HSR project. A subsequent PBO report will examine whether projected ridership is sufficient to support the system’s operations.
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