Chugging on at a slow pace
Despite a wealth advantage, Canada lags Spain on high-speed rail,
As a pair, Toronto and Montreal, Canada’s two largest cities, have a lot in common with Madrid and Barcelona.
Both city couples are roughly 600 km away from each other: Madrid is 650 km from Barcelona, and Toronto is 540 km from Montreal.
Jointly, 11 million people live in the metropolitan areas of the two largest Spanish cities, compared to 10 million in the metropolitan areas of the Canadian cities.
Both pairs are the cultural and financial hubs of their countries, the engines of economic activity, and are home to world-renowned universities. They host professional conferences, major sports events and welcome millions of tourists every year.
Measured by GDP per capita, Canada is 50 per cent wealthier than Spain. But despite this wealth advantage, when it comes to high-speed rail service, Spain is well ahead in the game.
The state-owned AVE (Alta Velocidad Espanola) rail service between Madrid and Barcelona was introduced in 2008. Riding at an average speed of 248 km/h, the trip can be as short as two hours and 43 minutes. After reaching annual ridership of more than four million passengers, this April a new low-cost, high-speed service will be launched. Ticket prices will sell for as low as 10 euros ($14.50) for a one-way journey.
At the same time, the lazy journey between Canada’s two largest cities — shorter by 110 km — takes five hours, exactly as long as it did 40 years ago.
High-speed rail service requires heavy investments that don’t always make sense financially, but the Madrid-Barcelona line is an example for what L.E.K.
Consulting refers to as the “sweet spot” of city-to-city high-speed routes. These are the routes most competitive with air and road travel that can be operationally profitable. They include routes that connect major cities that are 200 km to 700 km apart and take 90 minutes to 3 1/2 hours to ride. Examples include ParisLyon, Tokyo-Osaka, and Milan-Rome.
A potential Toronto-Montreal highspeed rail service would also hit that sweet spot.
As of 2019, there are more than 46,000 km of high-speed rail routes in operation in 16 countries worldwide. An additional 11,000 km are under construction. Why can’t Canada, the 10th largest economy in the world, get its act together and connect the 540 km between Toronto and Montreal in a fast and sustainable way, taking advantage of our cheap clean energy and Quebec’s Bombardier expertise?
Via Rail, the Crown corporation operating passenger trains in Canada, addressed that question recently. But the solution it’s proposing — a $4-billion to $6-billion investment in a high frequency train (HFR) rather than a high-speed one — falls short.
Via’s major challenge is that it doesn’t own the railroad it’s using. Canadian National Railway, a private company, owns the tracks and makes the decisions about infrastructure, schedules and frequencies. CN, not surprisingly, is giving priority to its freight trains, which leads to poor passenger train service: Via trains between Toronto and Montreal run with no delays only 63 per cent of the time.
The proposed solution, which received renewed support from Prime Minister Justin Trudeau in his recent mandate letter to Minister of Transport Marc Garneau, is to rebuild a northern corridor based mostly on existing rail beds, passing through Peterborough and Ottawa. Via Rail would gain ownership and offer higher frequency service, but that’s about it.
Via doesn’t disclose the future travel time between Toronto and Montreal once the high-frequency plan is implemented. Different sources speculate that the ride will be merely 19 minutes faster than the current five-hour ride.
If true, taxpayers will be on the hook for a multibillion-dollar investment that wouldn’t offer any significant improvement — or serious competition to the 60 daily polluting flights between the two cities. A high-speed service that will reduce travel time to about two hours is the game-changer we need.
If such a service is not possible on the northern corridor, an alternative solution could be Via Rail purchasing or trading tracks with CN. It could build and transfer to CN the Peterborough route for its freight traffic and take over and upgrade the current shared tracks to a high-speed rail service.
It would be expensive — as was the nine-billion euro AVE investment in Spain — but Canada needs to learn from the international experience. A Toronto-Montreal line with potential profitability may be of interest to private or institutional investors that can help finance it. And if the price tag scares you, take a look at the 86-billion euro commitment that Germany just made for its high-speed rail network.
Although Canada Infrastructure Bank and Ottawa already committed $71 million toward a “pre-procurement” work for the high-frequency service, it’s not too late to change course. It’s time for Marc Garneau — who knows a thing or two about fast transportation — to make a bold and enlightened decision to introduce a sustainable, electric, highspeed train between Toronto and Montreal.
Amir Barnea is an associate professor of finance at HEC Montréal.