Key Takeaways:
- The Alto high-speed rail project is estimated to cost $60-billion to $90-billion and cover over 1,000 kilometers, posing significant fiscal risks due to its massive scale and complexity.
- The project is being pushed forward despite key unanswered questions, including route, station locations, and land requirements, which increases the likelihood of practical problems emerging after commitments are locked in.
- Canada has limited experience in building high-speed rail, and even European countries with decades of experience often face major delays and cost overruns.
- The project’s costs per minute of travel time saved and per kilometer are higher than average European high-speed rail lines, raising concerns about its economic viability.
- The economic case for the full Alto corridor has not yet cleared a conservative cost-benefit test, and proponents’ claims of benefits are modest relative to the capital investment required.
Introduction to the Alto High-Speed Rail Project
The Alto high-speed rail project is a massive infrastructure undertaking that aims to connect Toronto and Quebec City with a high-speed rail line. However, despite its ambitious goals, the project is barreling towards a costly fiscal reckoning. With an estimated cost of $60-billion to $90-billion and a span of over 1,000 kilometers, even minor planning errors can add billions in public costs. Furthermore, Ottawa’s proposal to accelerate construction by roughly four years only increases the risk of locking in fiscal and political commitments before crucial details are resolved.
The Risks of Premature Commitment
The Alto project is being pushed forward despite key unanswered questions, including where the line will run, where stations will be located, and what land must be acquired. International best practice, including guidance from the Organization for Economic Co-operation and Development, cautions against committing to large infrastructure projects before routes, costs, and delivery risks are clearly understood. Accelerating a project of this scale under such conditions increases the likelihood that practical problems will emerge only after political and financial commitments are locked in. Canada’s limited experience in building high-speed rail, combined with its history of struggling to deliver infrastructure projects on time and on budget, only adds to the risk.
Comparing Costs and Benefits
The costs of the Alto project are significant, with estimates suggesting that it will cost roughly $250-million to $375-million for each minute of travel time saved. This is higher than the average cost of €90-million per minute saved ($146-million) found in a 2018 European Union audit of high-speed rail projects. Additionally, the project’s costs per kilometer are estimated to be around $60-million to $90-million, which is materially higher than the average of $40-million per kilometer for European high-speed rail lines. While proponents of the project point to potential benefits, including faster and more reliable travel, reduced road congestion, and improved economic connectivity, these benefits are modest relative to the capital investment required.
The Economic Case for Alto
The economic case for the full Alto corridor has not yet cleared a conservative cost-benefit test. A 2025 C.D. Howe Institute report estimates that high-speed rail could deliver $15-billion to $27-billion in benefits, but this does not assess whether total benefits exceed the project’s costs. Furthermore, the use of public-private partnerships to manage some fiscal risk does not eliminate the risk of cost increases, as taxpayers remain the backstop if costs rise or assumptions prove optimistic. The core issue with Alto is premature commitment, and Ottawa should lean on the brakes until a solid business case exists.
Conclusion and Recommendations
In conclusion, the Alto high-speed rail project poses significant fiscal risks due to its massive scale and complexity. While the project’s goals are ambitious, the risks of premature commitment, high costs, and uncertain benefits make it essential to slow down and reassess the project’s viability. Ottawa should prioritize a thorough cost-benefit analysis and ensure that all crucial details are resolved before locking in commitments. By taking a more cautious approach, Canada can avoid the pitfalls of costly infrastructure projects and ensure that its investments in high-speed rail deliver long-term value for taxpayers and users alike.