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A Via Rail train speeds over the Hanlon Expressway in Guelph, Ont., April 19, 2017.

Stephen C. Host/The Canadian Press

The Liberal government is sharpening its scrutiny of Via Rail's ambitious and costly expansion plans in the run-up to the 2018 budget.

While no final decisions have been made, the government appears to be working toward approving Via's $1.5-billion request for new trains in the short term.

The government would then ask the new Canada Infrastructure Bank to review the Crown corporation's multibillion-dollar plan to operate on new tracks exclusive to passenger rail along the Quebec City-to-Windsor corridor.

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Via Rail submitted a plan to Ottawa in December, 2016, that coupled the need for a new fleet in that corridor with a proposal called "high frequency rail." That plan would involve new inter-city passenger rail lines designed to avoid current delays because freight trains are given priority on the existing network. The combined proposal could cost more than $6-billion if it involved electric power.

However, the government is treating Via's pitch as two separate decisions. In an interview with The Globe and Mail, federal Transport Minister Marc Garneau expressed clear support for Via's fleet-renewal request.

"There's no question that Via train service must continue and that some of the train cars are getting old and we need to address the issue so that we continue to have a reliable and predictable service," he said. "We need to replace the hardware once in a while."

Most of Via's fleet is at the end of its useful life and the company has said some rail cars will start to be pulled out of service as early as this year.

As for the broader question of whether to expand Via's existing service, Mr. Garneau said his department is currently engaged in more detailed analysis of the high-frequency rail proposal.

"We're digging down deeper now and doing sort of financial-grade studies to look at what the potential is for ridership," he said. "Secondly, we need to have a sense of to what extent the private sector would be interested in signing on to this as investors."

Prime Minister Justin Trudeau has signalled his support for Via's high-frequency plan, telling Quebec City's Le Soleil newspaper in an interview published Saturday that it would be good for society, the environment and economic growth.

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"It's the kind of investment people are expecting," he said.

Via's proposal would mean the construction of a new line between Toronto and Ottawa through Peterborough that would use an abandoned rail line that is currently a recreational trail. Meanwhile in Quebec, Via is proposing new service between Montreal and Quebec City along the north shore of the St. Lawrence River through Trois-Rivières.

Via Rail CEO Yves Desjardins-Siciliano has been promoting the idea for several years now and had expressed hope that Ottawa would make a decision in 2017. A Via spokesperson said the company is "hopeful" based on Transport Canada's review of the plans.

Via has lined up support from city councils along the Quebec City-to-Windsor corridor, who have been urging their local MPs to support the plan.

However, provincial government decisions in Ontario and Quebec have complicated matters. Ontario announced in October that it is planning a high-speed rail line from Toronto to London, and perhaps as far as Windsor. The plan has not received full funding from the province.

Ontario is looking at trains that would reach speeds of up to 250 kilometres per hour. In contrast, Via's plan would use traditional passenger trains, with top speeds of about 177 km/h. High-speed train lines are much more expensive, partly because they require full grade separation from intersecting roads.

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Meanwhile in Quebec, the province's pension fund is leading a $6-billion commuter rail project called REM in the Montreal region that would have a new light-rail line enter the downtown through a tunnel. However, Via wants to run its heavy trains through that same tunnel as part of its proposed new line to Quebec City. Whether the two types of trains can share the tunnel is an unresolved issue.

"If there is a train coming from Quebec, how one can address the issue of compatibility?" Mr. Garneau said, in describing some of the questions Ottawa is reviewing closely.

Quebec Premier Philippe Couillard also surprised many in November when he raised the possibility of a high-speed monorail between Montreal and Quebec City. He later backtracked, assuring the mayor of Trois-Rivières that he would support Via's plan if it receives federal funding.

Ottawa recently launched a $35-billion Canada Infrastructure Bank, which is expected to be in a position to start approving projects later this year. The goal of the bank is to support projects that could include significant private-sector funding from investment funds such as public pensions.

Mr. Desjardins-Siciliano had been promoting Via Rail's project to pension fund investors long before the Liberal government created the infrastructure bank.

Conservative transport critic Kelly Block said her party wants to see more detail before taking a position on Via's plans.

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"My immediate concern is that the Trudeau government lacks the money necessary to fund a project like this one because of its wasteful spending and high-deficit budgets," she said in a statement.

NDP Transport critic Robert Aubin, whose Trois-Rivières riding would benefit from VIA's plans, said Ottawa should move ahead. He also expressed concern that the infrastructure bank could become a source of delay and extra cost.

Infrastructure Minister Amarjeet Sohi said in an interview that Via's proposal fits the type of project that the bank would consider.

"The creation of interprovincial or intermunicipal public transit systems or rail systems really ties into the overall goal of building greener communities and reducing congestion and building transportation systems that are more sustainable," he said.

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