Yeah, I have to question those annual revenue numbers. They seem optimistic. Say at $250 for a round-trip ticket ... that's about 8-million 1-way trips.
Ridership was forecast at 11.9 million for the whole corridor, and 6.6 million for the Toronto-Montreal portion. That was for 2005, the first year, and expected to grow significantly from there.
But in reality, the population of the catchment areas that would benefit from HSR is close to half that (also the number is not 20 million...you can't just add the populations of Ontario and Quebec). Keep in mind that the majority of VIA's passengers today are traveling between Toronto and Ottawa and Montreal. How happy will folks in Belleville, Cobourg, Smith Falls, Brockville, etc. be when they hear about a service that could well cost them rail service all together? Yes, I know there's the argument that you could run parallel services to those communities. However, I doubt the ridership is there to be able to support those services for very long. That's why I am skeptical that the entire population of the corridor would support a project that could well result in diminished service for their communities.
Yes, the population of southern Ontario and Quebec is in the 18-19 million range. The cities that would be served by HSR are about 13 million, not including nearby cities like Hamilton, Barrie, etc. That's easily 15 million people who'd directly benefit from HSR in the Corridor.
The European context is very different. There is far more local transit available at the end of your destination (even among the suburban destinations) which means that you don't necessarily need a car when you get there. In our case, we aren't quite there yet (and at the rate we're going it might take a decade or two). Aside from that, in Europe HSR is part of a very built-up rail network of inter-city trains, regional trains, commuter services, etc. We barely have an inter-city service today. I am skeptical about running after we've barely learned to crawl.
Ah yes, the classic “we’re not Europe” argument. You’re making it sound like European cities are on some whole other plane of existence. They’re not. When it comes to the things you mention – density, transit, etc. – Toronto and Montreal are closer to European cities than to most American cities. When it comes to Toronto, GO Transit would likely be the most important feeder for HSR, and that’s getting major expansion regardless. Even VIA Rail has had steady ridership increases since the 90s. Besides, these things are all taken into account in the high speed rail studies.
Or you could ask them if they support a $20 billion dollar rail project even if it will not service their community? I think the polling questions were far too generic. How about telling them what high speed rail is? Then telling them the specific proposals that are a priority for Canada and what they entail... and then asking them the question. I am sure the response would be far less enthusiastic.
I wouldn’t be so sure. Going by the questions it could be that the pollsters did tell people about the specific proposal. For example: “Would you support, somewhat support, somewhat oppose, or oppose government funding the complete high speed rail project?” That seems to suggest that there’s a specific project that they’re asking about.
I have always wondered if a more logical place to start would be 'Medium Speed' rail. I envision an upgrade of the current corridor to max out at around 200 kph wherever possible. Combine that with a few service reductions at logical points such as cutting out Port Hope and Trenton. This would give you non-express trains capable of doing Toronto-Ottawa in say 4 hours. Throw in some passing tracks and express train service and maybe you could get express Toronto-Kingston-Ottawa or Toronto-Kingston-Montreal trains down to about 3 hours (which is certainly competitive with commercial aviation).
The problem is grade crossings and the freight companies. Trains can only go so fast before grade separation is needed. And as long as VIA has to use CN track, then it doesn’t matter how fast the trains go, they’ll always have to stop for freight trains and schedules will always be constrained. Once you decide get rid of level crossings and build dedicated passenger track, the costs get so high that you might as well go full high speed. I’d be curious to see how Collenette’s VIA Fast proposal dealt with this.
The report concludes what most megaproject reports conclude, that while technically feasible the project is sensitive to variations in discount rates, construction costs and ridership potential and represents a "high financing risk for each party involved". The only situation under which the private operator could repay public investment was assuming a 0% discount rate over 30 years, which is really more of a technicality. Specifically, the system would not be viable if it included costs of capital where "cost of funds would significantly exceed the HSR's projected financial returns, regardless of the considered scenario."
The project didn't conclude that we should build HSR. It recommended governments conduct further with an eye to clarifying the rate of return. The only way their assumptions made sense were assuming a private company "must agree to take on all project risks," so they in turn suggested that the "initiative for the next stage lies with the private sector." I guess the private sector wasn't interested in a low return, high risk multi billion dollar project.
The important issue for discussion here is the 'best case' projected public sector IRR of 3.6%. Is this an acceptable return, or could we do better elsewhere.
(btw, thanks for providing this report, many a google search turned up nothing.)
There’s a link to the report on highspeedrail.ca. It’s a messy site from a design point of view but it has a lot of information.
That 3.6% is excluding tax revenues. Including tax revenues, it’s 7.1%, and 12.3% for the private sector. A fully public project would have a higher public IRR.
The recommendations stated that since 70-75% of the project would be publicly funded, the governments have to indicate that they will proceed to the next phase. The private sector won’t be willing to put up money unless there’s a government commitment. The recommendations also state that if the conditions couldn’t be satisfied, that the government should revisit the project in 3-5 years. Obviously that didn’t happen.
The 1995 Report found that in all circumstances 300kph systems provided better financial returns than 200kph, claiming that both would require an entirely new system with minimal cost difference between the two. Using the standard federal discount rate, the only route they found to be viable was a 300km/h route between Toronto-Ottawa-Montreal (and not further to QC or Windsor).
The 3 governments agreed on 8%, and at that rate 3 of the 4 options are viable. Even at 10%, the only likely option is still viable. The Mirabel route is irrelevant now that it’s not a passenger airport, and the 200-250 km/h option is unlikely because it costs almost as much as the 300 km/h option for less benefit. We’ll likely see the numbers look better with the updated study, with population growth and more transit investment compared to the mid 90s.
