That traffic isnt an impediment to electrification as there are no double stacks or auto racks. Sure, one could embargo the line to freight once and for all, but might as well let that little bit of business continue. Trucking would be more expensive - the City is a customer, we don't need yet another cost to hit the taxpayer - and there might be a few jobs lost.
The point wouldn't be to completely stop serving what few customers there are downtown, but to reroute the freight, what little there is, around Union. But InsertName's answer besides, it becomes moot if that freight is less than catenary height as that pertains to proposing vertically stacking an RER twin track to run around the shed and to the leads each end of the USRC. If lateral space permits around the shed, then three tracks. It could go even more if supports go outside the embankment, but it's going to look like hell as it is, and I'm thinking the most streamlined and efficient way this could be done within the present USRC footprint. My concern is it looking like the ELs of New York and Chicago, not pretty. That being said, until the Gardiner comes down, the sightlines of a vertical tier can't make things much worse. The upper deck would do two things: It would speed RER across slower traffic and tracks, avoiding the ladder switches into Union, and it would act as a 'flyover' to allow choosing which corridor to continue on at each end of the Union Yard. Speaking of "yard", it might even avoid the imposed yard speed limit. Platforms of course would also have to be on an upper level. Engineering wise, it would be relatively easy and efficient to utilize that grade separation. My big worry continues to be visual. The track underneath, due to even the lesser needed vertical gauge, would have to be lowered somewhat to allow the stack to clear under the four bridges to the west of Union.
Complicated? Absolutely, but still a fraction of the complications and costs of tunneling. And able to be connected directly to the rest of the Union passenger corridors and platforms.
What would drive it being approved is the incredibly massive, disruptive and expensive cost of tunneling, and it would be able to be far more flexible in terms of accessing the corridors north as well as east-west by wyes at each end of the deck. One saving grace for it being a deck is...you guessed it, being able to be merged into the Rail Deck Park. That might in fact be one of its best selling features. "Yes, it's pig-ugly, but it will be mostly hidden by the park".
As for vertical separation of RER tracks, think Long Island Railroad in parts of NYC. Due to the very high thrust-to-weight ratio and distributed traction of modern EMUs, climbing steeper incline ramps than even the present fly-under at Bathurst is possible.
I believe Metrolinx is going to start on the new platform at union this year, replacing those bypass tracks anyway.
That is what I was wondering. For what little use those tracks serve (and freight could be routed up via the by-pass) for passenger use, that space is very valuable.
Edit to Add: On reflection, comparing flown tracks to NYC's and Chicago's ELs is unnecessary. We have the modern model at the airport and the airport spur.