PBO Warns Alto High-Speed Rail Costs Could Surge Beyond Official Estimates

As first reported by CBC Toronto, a new report from the Parliamentary Budget Office (PBO) warns that the proposed high-speed rail project connecting Toronto and Quebec City could cost significantly more than initial official estimates.

Following a request from the Senate finance committee, the PBO analyzed the projected costs for the corridor, which is being overseen by the Crown corporation Alto. The budget watchdog estimated that the baseline route—which excludes a potential stop in Kingston, Ont.—could reach a total cost of between $75 billion and $113 billion. This range represents a substantial increase over official estimates, which were placed between $60 billion and $90 billion.

According to CBC Toronto, the PBO attributed these potential cost increases to the inherent uncertainty of large-scale rail infrastructure. The report identified tunnels and elevated structures as the primary cost drivers, noting that each additional kilometer of tunnel could add $169 million to the total, while each kilometer of elevated structure could add $153 million.

While Alto is considering a stop in Kingston, the PBO noted that such an addition would introduce further uncertainty. The watchdog cited a conflict between easier construction geography and the challenges posed by higher regional population density and ecological sensitivity.

In its analysis, the PBO looked at high-speed rail projects in the U.S., the U.K., and Europe. It found that projects in the U.S. and U.K. suffered from significantly higher costs due to project-management weaknesses, design changes, litigation, permitting, and land acquisition difficulties. The PBO suggested that Bill C-5, known as the One Canadian Economy Act, which aims to streamline approvals, might mitigate some of these risks, though it noted that the effectiveness of these provisions in court will be a key factor in controlling costs.

Transport Minister Steven MacKinnon has defended the project as a means to create new opportunities for Canadians and build a strong economy. He stated he is confident the project will improve lives despite inevitable controversy.

Conversely, Conservative transport critic Dan Albas has called for the project's cancellation, describing it as a "Liberal high-speed rail boondoggle" that will likely go over budget and arrive late. Albas expressed concerns regarding the expropriation of productive farmland in Quebec and Ontario. The Bloc Québécois has also raised concerns regarding consultations and expropriations, and residents in eastern Ontario have voiced opposition to the route.

Despite the cost warnings, the PBO estimates the project would provide modest economic stimulus. Construction is expected to begin in 2030, with the Ottawa-Montreal segment projected to raise real GDP by approximately $1.8 billion in 2029, growing to $2 billion by 2033. Employment is expected to increase from roughly 4,300 to 9,000 jobs.