No offence Duncan but this is sooo an idea that the NDP would embrace…take two successful private rail enterprises and combine them into one nationalized entity that's likely to be subject to demands for subsidized service, have a union monopoly, etc. We would seize a company like CP that does the bulk of its business shuttling bulk goods in the Prairies, to provide improved commuter rail service to a region with 15% of the population. It's Toronto centric ideas like this that cause so much consternation in the rest of Canada.
Do you remember what happened to air fares after Canadian was bought out, and before Westjet expanded? Air Canada was having a field day. They cut capacity and raised fares immediately after the merger. It hurt the public and in the long run it has hurt the airline which has since suffered a stream of labour issues, fleet management problems, etc. arising from the merger. A CP/CN merger would be worse. The lack of competition would drive up bulk freight rates screwing farmers, miners, etc. throughout the country, unless of course, we mandate the new entity not to be as profitable and subsidize their customers. Our entire rail system would also be left at the mercy of a single union controlled entity. And the merger of two unionized entities would probably lead to some of the same labour issues that Air Canada faced post-merger.
Next, there is the issue of nationalization. Nationalizing CN/CP would probably be the largest expropriation of private assets in the history of Canada. I'd be curious to know how it would be pulled off. Would you expect the government to pay tens of billions to buy out all the shareholders? Or would you simply pass a bill nationalizing the companies, screwing over thousands of investors out of tens of billions of dollars?
I have no doubt that CN/CP have probably considered a merger as private enterprises. I also have no doubt that both have reached the simple conclusion that it would be difficult to pull off and that no Liberal or Conservative government would ever allow it.
If you want to improve rail service in the GTA, it's simple to do it. The weston sub is a good example. Empower GO to negotiate with CN/CP. Let them buy corridors, lease capacity, etc. Better yet, have GO build it's own corridors (we have plenty of unused Hydro ROWs for example) that would not be subject to interference from any other company. In the worst case scenario we can expropriate CN or CP owned corridor. There is no need however, to expropriate their entire business.