High-frequency rail sounds good – but does Via have to run it?

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Be still my beating heart. If news reports are to be believed, the government of Canada is about to build a new “high-frequency” rail line in the Toronto-Quebec City corridor.

“New mostly-electric rail line will get you from Toronto to Montreal 25% faster,” runs the headline on a Toronto Star story, “at speeds of up to 200 kilometres per hour.” It must be true. After all, it’s been “announced.” Right in time for the election.

Not so fast. Read the government’s statement a little closer. “The Government of Canada,” it says, “is taking the first steps in preparing for the procurement process” to build the new train service. Not building the service. Not taking bids on it. Not even preparing to do so. But “taking the first steps” in preparing for it.

These “steps” include “engaging Indigenous groups and communities” along the line, negotiating with municipal transit agencies to use their routes into and out of city centres, and – as if those weren’t enough – “engaging with the private sector to determine capacity, and seek perspectives on the best possible delivery model.”

Translated, they are still trying to line up private capital to finance the project’s construction costs. Currently these are estimated at $4.4-billion; you can guess for yourself how many multiples of that the final figure will come in at, after the inevitable delays, strikes and overruns. The government, similarly, claims the project “could” more than triple annual passenger traffic in the corridor, from 4.8 million in 2019 to 17 million in 2059, but there’s no reason to attach any particular weight to that figure, either.

Give thanks that they are merely talking about “high-frequency” rail, and not the sort of “high-speed” lines common in Europe and Asia, which would require not just adding track here and there, as currently envisaged, but a whole new network. The last time this was seriously studied, in 2009, the costs were estimated at roughly $12-billion in today’s dollars. And that was just for the Montreal-Toronto portion.

But even at $4.4-billion, or whatever it balloons to, the chances of the project breaking even, let alone turning the kind of profit that would attract private-sector interest, would seem slim – at least as long as Via Rail is running it. Year in, year out, the federal passenger-train monopoly covers barely half of its operating expenses from passenger revenue, leaving the taxpayer to pick up the rest.

Even before the pandemic, annual subsidies were running to nearly $400-million a year. That’s not because of the special challenges of serving remote locations across Canada’s wintry expanse, or whatever you’ve been told: 97 per cent of Via’s traffic is in the Windsor-Quebec corridor. True, it loses less money there than on its long-haul routes – about $30 per passenger, versus $500. But it still loses money.

(Why does this matter? Because resources are scarce. And because rail travel is not a public good, the kind of thing that can only be paid for with taxes. Rather, you can charge people for it. If people aren’t prepared to pay for it what it costs to produce, that suggests it provides less benefit to the public than the resources it consumes. The money that pours into Via’s deficits might be better spent on other things.)

There’s no doubt that some of this poor performance is because Via does not own the tracks it runs on, but rather must share the tracks with the freight trains operated by the tracks’ owners. This not only limits the frequency of its service, but the timeliness of it: just 71 per cent of Via’s trains arrived on time in 2019, versus the 90 per cent-plus typical of a well-run railway.

There might well be a case, then, for building more tracks specifically for passenger trains. The question is whether it should be Via – and only Via – that operates them. It would be hard to persuade the public to abandon their cars for the train, even at the subsidized prices Via charges, so long as the service remains so … infrequent. But it’s not a given they will do so even with those expensive new tracks.

What’s needed to stimulate more traffic is not more subsidy, but better service, and the best way to improve rail service, as countries across Europe are discovering, is competition. Railways may be a natural monopoly, but the trains that run on them are not. Even if Via were a paragon of efficient, reliable service, it would make no sense to preserve it from competition. But in view of its actual performance, opening the tracks would seem the missing piece of the high-frequency puzzle.

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