Mr. Speaker, today I am going to be talking about two themes: the first is property rights and the second is the economics of the Alto project. My comments on both are in the context of the part of the budget implementation act that deals with the proposed high-speed rail network and the Alto train, which would run 1,000 kilometres from Quebec City to Toronto at a cost estimate of $60 billion to $90 billion.
I am going to start with property rights because the proposed corridor of 1,000 kilometres would run through my constituency. There are two proposed routes that would go through my constituency: a northern route and a southern route. Whichever one is chosen, people who live on that route would be negatively affected, and I thought I would talk a bit about how they would be affected.
Let me start by telling members my own position on property rights. This is an issue that is near and dear to me. It is an issue on which I proposed a constitutional amendment, an amendment to the Charter of Rights, to include property rights. The formula which I suggested, because one speaks in general language in bills of rights and charters of rights, is to say that, when property is taken or its use infringed upon for a government purpose, the owners ought to have a right to full, just and timely compensation. All three of those principles are violated by the expropriation and land use restriction regime proposed under the budget implementation act for Alto.
Alto has published a plan of rough estimates for where the corridors would be. These rough estimates show corridors roughly 10 kilometres wide. It varies along the route. I assume Alto is in the process of doing some geological work to determine where it wants to go. The process that has been outlined for us says that, at the end of this year either the northern or the southern route will be chosen, and additionally, the corridor for the potential rail line will be narrowed to about a kilometre wide. I am not sure if that is actually what will happen, but that is what it has planned to happen.
Within that one kilometre-wide corridor, a thousand kilometres long, and therefore a thousand square kilometres, Alto would have the power to expropriate. This expropriation would occur with a Crown corporation, which includes private investors, and it would do this using expropriation powers normally only exercised by government. That is an extraordinary shift. Additionally, a series of protections for property owners would be stripped away.
The first thing that would happen is that Alto would look and then say it might run along a certain part within that kilometre-wide corridor. It might not, but it is not sure, so it is going to put a property development freeze on all properties that it might go through. Will that be every property within the kilometre-wide corridor? We do not know yet, but a freeze on property, that is to say that someone cannot develop or improve their property, has a real financial impact.
Under the Expropriation Act, this kind of freeze is permitted, and it can be for up to 120 days. Under the new legislation, it would be for up to two years. During those two years, someone would not be able to do anything to their property. If they tried to, they could be fined through what are called administrative monetary penalties, and they can be ruinous penalties.
It is a bit difficult, from the legislation, to determine exactly what those penalties would be. It appears to me that they could be as high as $20,000 per offence, and individual offences that continue over a period of time could result in multiple fines. That, I think, is enough to ensure that anyone would, indeed, not develop their property.
After Alto has built its rail and decided which properties it actually wants, someone's property might be released, at which point they have the right to seek compensation for the loss in value. However, that is a long, slow process, and this would affect thousands of properties, maybe tens of thousands of properties. I actually do not know how many there will be in the as yet undefined corridor.
All these properties would be involved, with people trying to seek compensation, and each one would have to be a negotiated settlement. I think it is safe to say that, for many people, the payback would be less than it was worth or they would simply give up and never actually seek the money that was taken from them. That is for the people who would have a property freeze placed on them.
Will there be any compensation for people whose property value is diminished because the Alto line runs through, cutting the community in half? No, there will be no compensation for those folks. It will significantly affect property values, landlocked properties, properties that can no longer be accessed with ease, properties where formerly people could get to them by simply crossing and driving down the road, where now the road is bisected. Presumably hundreds of roads will be bisected.
Alto will have a strong incentive to try and make it as minimal as possible, the number of roads on which overpasses are built. There is a reason for that: Overpasses cost money. I have heard estimates that a single overpass is as high as $50 million, but I have found some evidence that it may be as low as $20 million. Whatever the case is, multiply that by a few hundred, and we can see that Alto, which is trying to be a profit-making company, is going to finance this money through floating a bond. It is going to have a very strong incentive to be as ruthless as possible and have as few overpasses as possible.
I was wondering: How many overpasses might there be? It is hard to estimate exactly, but I did take some highway construction for property near places where I live or have lived. I used to live on Phelan Road in what is now part of the extended city of Ottawa. Highway 416 was built south of the city. That road was cut off, and so where people could have crossed and talked to their neighbour within a five-minute walk, they now have to drive seven kilometres in one direction, cross over the highway and go seven kilometres back, 14 kilometres in total.
Similarly, east of Ottawa, there is a spot where I go camping. My mother-in-law owns a campground there. To get across Highway 417, people have to drive seven kilometres in one direction, cross over and drive six kilometres back. I have several other examples I could give, but I think the point is made. This is going to divide communities, slow down emergency response times and so on.
Now, in the three remaining minutes I have, I want to talk about the costs of Alto. I do not think we grasp just how badly costed-out this really is. A cost range was given. These were stabs in the dark, frankly. Let us say it is $90 billion. There are 40 million people in Canada, 10 million families of four, and $90 billion divided by 10 million is $9,000 for every single Canadian family of four across the country. It does not matter if they live in Nunavut and will never even see this rail, because every Canadian family is paying $9,000. Every Canadian family across the country is paying for something that is going to service people only in that narrow corridor. The people whose properties will be sliced up are paying $9,000 too. Is that number to be taken seriously? That, in itself, is mind-blowingly high. It is higher than our entire national deficit this year.
As it turns out, there is a fascinating paper written by Prof. Bent Flyvbjerg, who is the professor and founding chair of program management at the Saïd Business School at Oxford University. He writes this, in a recent paper about megaprojects in general:
Performance data for megaprojects speak their own language. Nine out of ten such projects have cost overruns; overruns of up to 50% in real terms are common, over 50% are not uncommon.
Then he provides a list. I will just read some of the rail projects:
The Shinkansen Joetsu high-speed rail line in Japan is somewhat comparable, at a 100% cost overrun; the Boston–New York–Washington Railway, U.S.A., a 130% cost overrun, the Copenhagen Metro, Denmark, a 150% overrun; the Montreal Metro Laval extension, Canada, a 160% overrun; the Minneapolis Hiawatha light rail line, U.S.A., a 190% overrun; and the Troy and Greenfield Railroad, U.S.A., 900%. That, perhaps, is an outlier, but it makes the point.
He says shortfalls of 50% are also not uncommon:
Combine the large cost overruns and benefit shortfalls with the fact that business cases, cost–benefit analyses, and social and environmental impact assessments are typically at the core of planning and decision making for megaprojects and we see that such analyses can generally not be trusted. For example, for rail projects, an average cost overrun of 44.7% combines with an average demand shortfall of 51.4%.
I will stop there and go to questions.
