Leadership by the Caisse is being credited with fasttracking Montreal’s long discussed regional mass transit system. The massive pension fund will own 51%
The Caisse is being credited with fast-tracking the city’s regional mass-transit system.
so many press releases, promises and proposals; so little progress. For decades, Quebec politicians talked up countless transportation projects that never got off the drawing board — airport shuttles, commuter-train upgrades, tramways, light-rail transit, bus rapid-transit systems.
So, Montrealers were understandably skeptical a year ago, in April 2016, when yet another plan surfaced: a $6-billion light-rail network that promised to solve multiple commuting conundrums at once. With downtown Montreal as the network’s hub, the 67-kilometre Réseau électrique métropolitain would shoot off in four traffic-clogged directions by the end of 2020.
Just a year later, the disbelief has faded and Montreal appears poised to embark on the most far-reaching transit expansion since construction of the subway network in the 1960s.
What makes the latest scheme different? This time, an organization that gets things done is in charge: the Caisse de dépôt et placement, Quebec’s pension-fund manager. Operating at arm’s length from the government, the Caisse is a financial juggernaut ($271 billion in assets) that knows how to generate profits (in 2016, its annualized return reached 10.2% over five years). And the Caisse has expertise in the area of investing in railways, thanks to the $14 billion it has invested in transit-related infrastructure projects, including Vancouver’s Canada Line and London, U.K.’s Heathrow Express.
Montreal’s LRT concept has hit some bumps. Quebec’s environmental review board raised concerns about ridership, financing and ownership. And some environmentalists want to stop the project, arguing its greenhouse-gas reduction projections are exaggerated. They also warn that the system would cut through sensitive green spaces and trigger more urban sprawl.
But some of Quebec’s biggest environmental groups counter that the benefits outweigh the drawbacks. For what the Caisse estimates will be a 2%-4% increase in the region’s overall transit budget, Montreal will get the equivalent of a second metro system, operating 20 hours daily, seven days a week, with trains on some segments running every 2.5 minutes during peak times.
The proposed LRT targets four areas. 1) Trudeau Airport, difficult to reach by car and bus due to traffic. 2) The South Shore, served by packed buses that cross the St. Lawrence River on a reserved lane that’s shut down when it’s too windy lest the orange cones get blown away. 3) The North Shore, where trains are overcrowded and service is limited. 4) The West Island, where trains are even more scarce and few transit alternatives exist.
All of the funding is in place now. The Caisse is providing $2.67 billion, while Quebec and Ottawa are each contributing $1.28 billion. The Caisse will own 51% of the network, and the two levels of government 24.5% each.
As part of the deal, Montreal’s regional transit authority is contributing $512 million, and Hydro-Québec another $295 million. And the feds will pay for a new, $4.2-billion South Shore bridge.
Some critics argue the project is too sweet a deal for the Caisse, the goal for which is getting a return on its investment. But anything that benefits the Caisse also benefits Quebec pensioners. And under the deal, once the Caisse has been paid its priority dividend, governments will benefit financially. The Caisse is promising that the project will be the first Canadian transit project in which governments will recoup their capital investments and their borrowing costs.
This time, when the train leaves the station, many Montrealers will be on board.