u/Case_Federal

Tl;dr: Cancelling contracts is bad for creating new ones. Thus cancelling ALTO could have consequences for Alberta’s rail plan among other rail projects in Canada.

I commented in response to someone about the consequences of ALTO being cancelled due to NIMBYism, and wanted to share my own thoughts/industry experience here.

With large infrastructure projects like ALTO, contractors take on a lot of risk to sign on the job (hiring staff, subcontracting, relocating people, etc.), and thus are less likely to sign if they perceive a high risk of cancellation with little compensation. Risk of cancellation is always written in contracts, but bidding contractors often measure the risk of cancellation based on the jurisdiction’s own history of cancelling projects.

The less faith contractors have that the project lead (e.g. ALTO/Gov of Canada) can manage risk (including political risk), the less likely they are to take on a project unless there are generous cancellation clauses. Remember, private companies have their own reputations to maintain, taking on projects that get cancelled and having to lay off hundreds of people is bad for their reputation.

Now… if a project like ALTO was to be cancelled over NIMBYism, it will have enormous consequences on the future of rail transit expansion across Canada for decades to come. No contractor would want to sign on Alberta’s rail expansion projects for example if they fear the Government of Canada will bend the knee to NIMBYs and cancel the project (the Federal Conservative Party will have a horrible reality check with this if they win and cancel ALTO). The only reason they would sign is if they’re guaranteed more compensation in case of cancellation (which can increase the project’s cost, which in turn decreases the probability that it starts construction at all). This also means talent avoids Canada for other more reliable jurisdictions. So we lose both the investment and the know-how for building rail. We’re already seeing something like this play out after Metrolinx divorced with Deutsche-Bahn.

And finally, if we tried to revive ALTO again after killing it, the project cost would balloon enormously unless we somehow guarantee the project cannot be cancelled again (wouldn’t really work in our current political system). In other words, every time we cancel a major project, the more difficult it becomes for future generations to build the same project.

I wanted to make this post because I see a lot of folks offering 1 of 2 alternatives to ALTO: 1 - buying back freight railways, and 2 - building VIA HFR instead.

Both of those sound like they’d be cheaper, less disruptive, and a better value, but they won’t be:

1 - buying back freight railways: the reason this would be pretty difficult is because the freight railways really don’t want to sell. Yes the government could possibly expropriate the tracks if they wanted to, but that would completely devastate the CN and CPKC operations, which as much as we dislike their (lack of) cooperation for passenger rail, they are in fact major contributors to Canada’s economy and transportation of goods. Taking over the line from Montreal to Toronto would mean completely changing how goods from the St. Lawrence arrives in Toronto, and vice versa. This would massively impact Canada’s trade capacity, and could cause logistical nightmares for Canada’s food system. Food from the port of Montreal arrives at the Ontario Food Terminal for example. Then there’s the issue of upgrades. The tracks would likely need many repairs and upgrades to handle 200kph speeds, and the government would likely still want to electrify the line, costing billions anyway, at the cost of completely altering Canada’s trade and food supply. In Europe and Asia, freight railways often have completely separate tracks from passenger rail operations for this very reason.

2 - VIA HFR: it’s true that conventional rail is cheaper than HSR on the very granular scale, but when building from scratch, most of the infrastructure needs are the same. Ultimately VIA HFR will still need to cut through rural properties, will still involve electrification, and will be the same length of double tracks. The cost estimate for this by the end was $45-70 billion, after which ALTO was born because there’s really no logic behind spending such a huge amount of money on a rail line that wouldn’t be a whole lot faster than what already exists. ALTO achieves speeds that would actually convince people to take the train instead of driving or flying, building ridership and having a quicker return on investment. VIA HFR unfortunately would have been much slower at recouping costs because ridership wouldn’t grow substantially if the trains aren’t much faster than the status quo.

The leader of the sovereigntist Parti Quebecois, Paul St-Pierre Plamondon, who is also leading in the polls, says his government would pull Quebec out of the ALTO high-speed rail project due to costs.

This is pretty bad news for the project. However it’s also potentially bad news for the party’s hopes of winning this fall.