Cadence wins $3.9B High Speed Rail development contract but delivery timeline is cause for concern

On February 20, 2025, Canada’s Minister of Transport Anita Anand announced that the Cadence consortium has been selected as the winner of the VIA-HFR Request for Proposals that was published on October 13, 2023. VIA-HFR was rebranded as “Alto” and, as we anticipated, the high-speed 300 km/h+ option in the bid was confirmed. After decades of studies, this is the furthest any modern intercity rail proposal has advanced in Canada. However, the government once again stopped short of fully committing to build the much-needed project to relieve congestion on Kingston and Drummondville routes.

The government announced that a further $3.9 Billion would be spent over the next five years on the co-development phase of the project, during which Cadence—composed of CDPQ Infra, AtkinsRéalis, Keolis, Systra, SNCF Voyageurs, and Air Canada—would work alongside Alto to design the railway, along the same corridor proposed for High Frequency Rail (HFR) but requiring a new alignment for higher speeds, with an “investment decision by Canada” to proceed with construction not being made until the end of the decade.

This announcement had originally been expected to take place in November or December. The reason for the delay is unclear, as has been the case with previous timeline slippages, and the funding has yet to be allocated in a federal budget, so final confirmation is likely to come after the federal election anticipated this spring.

Cost escalation concerns

Following the announcement, VIA-HFR / Alto published a Business Case Summary which includes a cost estimate in the range of $60-90 Billion for High Speed Rail (HSR) and $45-75B for “enhanced conventional rail” which appears to refer to the 200 km/h option in the RFP.

For comparison, the figure of less than $5B quoted for 170 km/h HFR including full electrification in 2016 would be less than $10B today, adjusted for inflation using the Non-residential Construction Price Index for Toronto. The government has still not released a side-by-side comparison of the 170km/h HFR option with the 200 km/h and 300 km/h high-speed option, and it is noteworthy that Alto’s ridership forecast is more than double that which VIA Rail originally forecasted for a high-speed case with shorter running times:

Alto’s forecast is double current European average costs of €25M/km for high-speed rail, a number which the European Court of Auditors previously criticized for being excessive. Scaling European costs would put the project at about $40B, including a fleet of new high-speed trains.

Further timeline extension

The reaction of many Canadians when HSR is discussed is “I’ll believe it when I see it”, which is entirely understandable after decades of false starts. However, the timeline released by Alto in their Business Case Summary and then withdrawn does not offer the prospect of seeing it under construction before the early 2030s, nor accepting passengers until the 2040s.

The Alto team published a version of this document with a timeline, later updating it to remove that section. Hat tip to rail advocate Tom Box for catching a copy of the original version:

Which segment of the route each phase refers to was not documented, but from this table it can be deduced that the private sector concession period would run until 2085.

We hope the reason this timeline has been withdrawn is to improve upon it. Not opening the line between Toronto and Quebec City until the early 2040s is not a reasonable timeline, especially considering more than a decade of planning has already been done. The Quebec-Windsor corridor needs results—tangible improvements in passenger rail capacity and service quality, even if incremental—promptly.

Meanwhile train travel time and service reliability in the corridor has degraded significantly over the past decade, through a hiatus in infrastructure investment and lack of political will to tackle the host railway interface, partly due to the prospect of HFR serving as a panacea. VIA Rail can not be expected to function effectively if faced with acting in “caretaker mode” for a further decade and a half, let alone meet growing travel demand in a way that prepares the way for Alto to succeed.

This is the same mistake as California HSR and UK HS2 have made. All hopes are hung on the project while the public sees no tangible results for an extended period, followed by years of disruptive construction. This results in the project and its budget becoming a football, which significantly complicates project management to put it mildly.

Project risk increased by procurement model and outsourcing operations

Transport Action continue to believe that a fifty-year private sector operating concession is not in the best interests of Canadian taxpayers nor of rail passengers. Ridership and revenue over the long term will be determined by factors outside the control of the private sector partner but foreseeably within the government’s control, such as housing and immigration policy, and by factors largely outside Canada’s control, such as US trade policy.

The contracting model currently proposed appears to leave Canada holding a significant risk in the event of a major shortfall, while still paying a premium to the private partner and foregoing the profits in the event of success, including the opportunity to reinvest operating profits to expand passenger rail in Canada or to use lower fares as a policy tool. 

Getting High-Speed Rail on track

Even though we have many concerns, Transport Action would like to see the project succeed. If it is to have any chance of success, Alto, Cadence, and the government must recognize that surviving another election cycle without having something to show for the expected $3.9B expenditure would be highly improbable. Therefore, we recommend the following steps:

• Invest in Canada’s capacity to deliver the project, including academic programs and standards development. Transport Canada and the government have been remiss in not advancing this earlier, because without Canadian standards for building a high-speed railway and certifying it for operation, so contracts can be clear and everyone knows what will be expected of them, it will be impossible to land the project on time and within a reasonable budget.

• Start visibly working and delivering tangible benefits early. This is not necessarily at odds with the point above, because early works, such as double-tracking and signalling immunisation ahead of electrification on VIA Rail owned infrastructure, can also be used to train apprentices and validate standards before committing to larger builds.

• Ensure the promised Dorval transportation hub is built, bringing together STM buses, Exo, VIA Rail, and the REM in a modern station with easy access to the airport, and made forward compatible with high-speed services. Nearly half a billion dollars allocated for this project in the 2022 federal budget is sitting unspent, at least partly because until the HFR procurement process played out, it wasn’t clear what future state to design it for, so this should now proceed swiftly.

• Provide substantive and ongoing public engagement. The transparency of the HFR project to date has been poor, and the uncertainty about route, technology, and timeline created by the government’s decision to change the procurement model erased much of the outreach work previously undertaken by VIA Rail. This needs to be improved so that public support can be maintained.

• Ensure the sustainability and growth of VIA Rail’s services within the corridor and across Canada. Political support for high-speed rail will falter if other regions of Canada see their services neglected or cut. The promises of improved services to Kingston and Drummondville to come with HFR, and of improvements to services and infrastructure in southwestern Ontario need to be brought forward and delivered this decade, as they would have been on the original HFR timeline. Failing to accommodate demand growth in the corridor over the next decade or more would do long-term economic damage to Canada that also dampens future Alto high-speed ridership.

• Provide a clear regulatory environment for passenger rail services, with Transport Canada resolving the track access issues over Metrolinx, CN, and other host railway infrastructure that currently impair reliability, travel times, and equipment utilization on VIA Rail’s corridor services. The consortium is supposed to eventually take these over as the “Local Services” in the RFP, and they will be vital feeders to the high-speed route.

• Considering the current geopolitical environment, ensure that the project uses as much domestic content as possible and works with suppliers in countries that reliably honour their trade agreements with Canada, to shield the project from supply chain disruption and further cost escalation.

Rather than spending extra years in procurement and planning to finalize a complex, costly and high-risk outsourcing deal, we would rather see the expertise of the consortium applied to design and construction, with train operations remaining public, as originally intended. After all, by Alto’s estimates, every extra year expended is $24B of foregone economic opportunity for Canada.