Transport Committee on Feb. 8th, 2024

[Karl Blackburn]

I would be happy to do so, Ms. Koutrakis.

For this investment, the government's priority is to resist requests for stations from mayors of municipalities along the project's route. If the government were to give in to these requests, which I would venture to describe as political, the goal of a high‑speed or high‑frequency train unfortunately wouldn't be achieved.

As Mr. Freemark just said, the areas must be well established. These include the areas in the network between Quebec City and Toronto, such as the capital, Montreal and the major urban centres. At the same time, it's necessary to develop measures for secondary transportation that will encourage greater use of existing infrastructure.

The government must show a willingness to prioritize these major centres. This is vital to ensure the project's appeal, viability and, of course, effectiveness.

[Annie Koutrakis, Liberal, Vimy, QC]

I think I have time for a quick question, which will be for Mr. Katz-Rosene.

Can you clarify at which point you consider planes to be more effective than a train such as an HSR train?

[Prof. Ryan Katz-Rosene]

You are talking about planes?

[Annie Koutrakis, Liberal, Vimy, QC]

Yes. Oftentimes we hear that the competition for the train is planes. At what point do you consider the plane to be more effective than an electric train, like HSR, and also, what is your opinion in terms of competitiveness? Are we talking about Toronto to Vancouver, or are you also talking about shorter distances like Toronto to Montreal or Montreal to Ottawa?

[Prof. Ryan Katz-Rosene]

There's a lot there.

Presently, for air travel, if you factor in the time it takes to go to the airports—which in Toronto and Montreal are not in the centre of the city—and to go through security and all that stuff, you're talking about a trip of three hours and 15 minutes at the very least, and then meandering your way through once you get through to the other side. We're looking at trying to achieve a train line that will be close to that in terms of being competitive with aircraft. We're looking at trying to bring the travel time to approximately three hours or three hours and 15 minutes if we want to see people choose the train over the plane, but there are other factors as well.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Ms. Koutrakis.

I'll now give the floor to Mr. Barsalou‑Duval for six minutes.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Thank you, Mr. Chair.

Welcome to all the witnesses. I'm pleased that they are joining us today for this important study.

Mr. Blackburn from the Quebec Employers' Council, I assume you must know Quebec quite well, given your position and what you did before that.

Let's start with connections to other modes of transportation. We talk a lot about the commute time from city to city and we wonder if we want high-frequency rail, or HFR, or high-speed rail, or HSR. However, be it HFR or HSR, some people are wondering if having no connection to downtown areas might pose a problem.

Take downtown Montreal, for example. If we look only at the time from station to station to determine the shortest possible route between Montreal and Quebec City or Montreal and Toronto, but the Montreal station is actually located in the north end of the city rather than downtown, the data on the speed of the route could ultimately be skewed, because the actual travel time could be much longer for most users who want to arrive downtown.

In your opinion, how important are connections to other modes of transportation, and are they an issue for you?

[Karl Blackburn]

You have a very clear view of the situation and that's a very good question. Thank you for reminding me how important this factor is.

We're looking at how we can develop our land as opposed to ensuring efficiency in terms of travel time. Earlier, Mr. Freemark provided some data that I think is essential. If we want this huge investment to deliver for decades to come, we must find a way to reduce travel times so as to encourage people to take the train.

I'd also like to have connections with the other modes of transportation. I think we need to look at it holistically, in complementarity with the other modes of transportation we have access to in Canada, such as air, road, of course, and even waterborne.

To come back to the specific question you're asking, it's crucial that rail transport reach urban centres if we want users to prefer that mode of transportation to save time and travel efficiently, while taking advantage of the infrastructure already in place. Of course, we should be able to prioritize investments along those lines.

I'm privileged to have our chief economist, Norma Kozhaya, with me today. She connects the dots between the various economic impacts and has a view of the various investment projects in terms of certain locations and certain directions. I'd therefore like to ask her to shed some light on how we need to prioritize choices we must make regarding destinations.

[Norma Kozhaya, Vice-President of Research and Chief Economist, Quebec Employers' Council]

Thank you, Mr. Blackburn.

Good morning—

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Unfortunately, I have to interrupt you, but your colleague may have an opportunity to provide an answer later. I don't have much time and I'd like to ask at least a second question.

The high-frequency rail project the government is currently proposing would save about 20 minutes on the Montreal-Toronto route compared to the travel time on the road, and would be 45 minutes faster than the current rail service.

Right now, the commute time between Montreal and Quebec City, for example, is shorter by car than by train. So the 20-minute gain I just mentioned doesn't necessarily change anything. Do you feel the time the project claims to save is enough to justify the investment at this time?

[Karl Blackburn]

We're prioritizing high‑speed rail, so travel times need to be significantly improved. Unfortunately, current forecasts don't allow us to justify these investments without a high‑speed rail project. In some cases, there may be high frequency, but there certainly needs to be considerable gains in travel time.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Ms. Kozhaya, do you want to add to your colleague's answer?

[Norma Kozhaya]

Yes, thank you.

I believe that a gain of 20 or 30 minutes is certainly not enough to change the behaviour of citizens and make the train really interesting and attractive.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Earlier, you talked about costs. I think that's an important element. Right now, we're having a debate without knowing the real costs associated with a high‑speed train and a high‑frequency train, but everyone has an idea about that.

The government seems to be saying that it wants an HFR or an HFR+, in other words, a high‑frequency train that travels at high speed in some places. A call for tenders was issued, and some people submitted bids. However, we get the impression that the government isn't giving us any figures and that the choice doesn't really belong to the public.

What do you think about the importance of transparency in the choices available to us? Transparency would allow us to have a societal debate. If we don't have the figures, it's difficult to have one, isn't it?

[Karl Blackburn]

Numbers are key. As you mentioned, we only have estimates and examples of what's been done elsewhere in the world.

The government is there to decide, so it will choose the options that will enable it to make the best possible investments. In this context, we must, on the one hand, draw inspiration from the best in the world and encourage a partnership project between the private and public sectors; on the other hand, we must see this investment as an investment for the coming decades. It's important not to see it as a short‑term investment, but for the next 50, 60 or 75 years. We'll never have a second chance to get this project off to a good start.

[The Chair, Liberal, Peter Schiefke]

Thank you very much, Mr. Blackburn and Mr. Barsalou‑Duval.

Next we have Mr. Bachrach.

The floor is yours. You have six minutes.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you, Mr. Chair.

Thank you to all three of our witnesses. I think this testimony is very pertinent to the study we've undertaken.

It feels like the choice between high-speed rail and high-frequency rail has been fairly well canvassed so far. I'm going to try to focus on this question of public versus private procurement models and how they could affect the outcomes of the project.

I'll start with Mr. Katz-Rosene. I believe it was you who mentioned the importance of getting the objectives of the project established near the beginning. Of course, with this P3 model the government has gone with, one of the objectives in the mix is delivering profits for private investors.

When we look at public models and private models of rail development around the world, what happens when private profit motives come into conflict with public objectives around transportation and the sorts of things we've been talking about at this meeting? What's the risk if those objectives come into conflict?

[Prof. Ryan Katz-Rosene]

I agree that there are some real risks that come to my mind when I think about the possibility of this being a privately funded thing, and as you pointed out, a private firm has a fiduciary responsibility to obtain profits.

I see a couple of risks there. One that's well-documented in the literature is a lack of transparency. If this is a government-funded project, a public project, there's an accountability process and a transparency process built into that, and I think that's worth keeping.

Another potential risk is a safety risk, or other risks, as a result of a private firm trying to cut costs to maximize the value gain. That's a real potential concern. If a firm is focused on maximizing the value and the return on investment, and all of a sudden something comes up that might be more expensive but is the right thing to do today because it's the climate-friendly option or the safer option, that could get pushed down as an objective.

Another risk is that a private firm might want to see greater returns on investment quicker. We might end up seeing fares, the fee structure for tickets, go up. That places additional risks. It's like a ladder of risk in terms of the project potentially amounting to failure, because a firm may want to see greater returns. That leads to a higher likelihood of tougher competition from other modes, because all of a sudden it's more expensive to take the train than it is to take one of these discount flights or hop in your car. All of a sudden the ridership projections that we have are not fulfilled. That's a real risk to the project.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you.

Mr. Freemark, I'm wondering if you have examples from the international experience of countries that have successfully built high-speed or high-frequency rail using a public procurement and operation model. Are there countries that are building public projects and succeeding?

[Dr. Yonah Freemark]

Among democracies, there are a variety of approaches that have been undertaken in recent years to invest in inner-city rail projects. My view is that there are a range of approaches. There is the United Kingdom approach, which has been at an extremely high cost and is based on an almost private concession model for high-speed rail development. That was the process that was undertaken for the line connecting the Channel to London, and now from London to Birmingham. That line has been quite pricey. I'm not sure that the U.K. has done a great job of controlling costs.

On the other side, there's the Spanish model, which is very much public sector driven. The Spanish government has done an excellent job through its infrastructure management, called Adif, to restrain costs. Spain has some of the lowest high-speed rail infrastructure costs in the world, which is interesting, because it is true that it has taken a purely public sector approach.

That said, it's worth noting there are many varieties here. I agree with my fellow panellists that the key issues—more than who is ultimately building or managing the line—are transparency, and assurances from the government that the government is controlling the day-to-day project design, planning and construction. Without high levels of capacity coming from the public sector, you're likely to see some major problems with cost escalation and major problems with design changes over time.

No matter what, it would be in the country's interest to ensure that it has a large number of public staff members with high-level capacity working on overseeing the project, whether or not the project is ultimately private or public in composition.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

This is my last question. I know I have just under a minute, so I'll frame the question and come back to it in my next round.

In my view, as an MP from a western province, what we're considering here isn't just rail service between Toronto and Quebec City; we're talking about the future of rail service in our entire country, because Via Rail, our public passenger rail provider, currently derives 95% of its revenue from that corridor. If it's privatized, as is the government's current plan, it's going to be expected to deliver passenger rail service along all the rest of their routes throughout the country, with 5% of the revenue. To me, that seems totally untenable.

If the objective is to deliver passenger rail for all of Canada at the highest level possible, given the resources, do you feel that the public procurement model or the private procurement model is going to have the best chance of getting us there?

I'll leave it there and I'll return to it next round. Thank you.

[The Chair, Liberal, Peter Schiefke]

Thank you, Mr. Bachrach. The question has been posed. We'll let our witnesses percolate over that.

Next we'll go to Mr. Lewis.

Mr. Lewis, the floor is yours. You have five minutes, sir.

[Chris Lewis, Conservative, Essex, ON]

Thank you very much, Mr. Chair. I appreciate that.

Thank you to each of the witnesses for appearing here today.

I'll dive right into it. The first thing, which I've brought up at this committee before, is that I'm very disappointed and/or concerned that this conversation isn't centred more around Windsor to Toronto for at least part of the study. Windsor, of course, being next to Detroit, is the busiest international border in North America. That's nothing to do with the witnesses. I'm just making a statement. That's where our commodities come through.

Mr. Freemark, I listened keenly to you when you spoke about a shift from cars and planes to trains, so this question is for you, sir. Ironically, I just looked up taking a train from Windsor to Ottawa. If I were to do that, it would take me 13 hours. If I drove from Windsor to Ottawa, it would take me just under eight hours if I stopped only one time for fuel. If I flew, it would take me five hours.

My question for you, sir, is with regard to the investment. Is there any way to close that gap? Am I missing something? How do I best represent my constituents in Essex, in the Windsor area, to ensure that the financial implications into it will actually have a result at the end?

[Dr. Yonah Freemark]

You know, I think I hear from your question, and from the previous question, that there's an interest in thinking about Canadian rail in general, not just the Toronto-Quebec City corridor. I can understand that. Obviously, nobody wants to feel like the national government is investing in just part of the country and not in many other populous locations.

Certainly the rail service from Windsor to Toronto currently, and planned in the future, is completely inaccessible to most people. It's way too slow. The result is that the vast majority of people making journeys along that corridor are currently driving to do so. As I'm sure you know, air service in the sections west of Toronto is also quite poor. Folks are generally driving to make those types of journeys.

It is also true that Toronto is such a large metropolitan area that even though London, Windsor, etc., are not enormous metropolitan areas, the size of Toronto as a huge population centre could make investing in a substantially improved rail service from Toronto to Windsor actually worth it. This would be especially true if there was co-operation with the United States to connect into Detroit, but perhaps that's for another conversation.

Even so, I think it's worth pointing out that yes, that corridor should be considered as well.

[Chris Lewis, Conservative, Essex, ON]

Okay. Thank you very much.

Mr. Katz-Rosene, I would like to open the same question to you, sir, because I know you touched on it as well.