Existing congestion on the Via Rail line—with on-time performance for passenger rail around 65 per cent—indicates that demand for services already exceeds capacity. With freight services having “right of way,” investment is required in dedicated passenger rail infrastructure.
Our recent C.D. Howe Institute paper explores the economic and environmental benefits of Alto, the proposed high-speed rail service in this corridor. Using scenario modelling over a 60-year period, it estimates total benefits ranging from $15-billion (in present value terms) under a conservative passenger growth scenario, to $27-billion under the most optimistic scenario. It examines five key impacts: rail-user benefits, reduced road congestion, improved road safety, agglomeration effects (leading to productivity growth and higher GDP), and lower emissions.
Focusing on the gross economic impact of the project across construction and operation, Alto estimates that it could generate approximately one per cent of Canada’s GDP, and result in more than 50,000 jobs during construction. Forecast GDP impacts often generate higher estimates than transport appraisals due to differential treatment of economic opportunity costs. Alto also forecasts that the high-speed rail network will drive higher-density transit-oriented developments, support the development of 63,000 residential units, boost land values, and generate municipal tax revenues. Indeed, there are various international case studies that observe economic development and higher land values around high-speed rail stations.
Home to 43 per cent of Canada’s labour force, the Toronto-Quebec City corridor is the country’s most densely populated and industrialized region, generating approximately 41 per cent of Canada’s GDP. With Transport Canada projecting a 21-per-cent population increase by 2043—adding five million people in Quebec and Ontario, more than half of Canada’s total growth—demand for all modes of transportation, including passenger rail, will only intensify. Where else in Canada could such a project make this great an impact?
Of course, no major project comes without uncertainties. Alto’s costs are not yet fully clear, and while preliminary estimates are in the $60-billion to $90-billion range, final figures will depend on numerous variables, such as the level of government subsidy, ticket pricing, the pace of construction, and financing arrangements.
Some wider issues have also been raised. While the corridor connects Canada’s largest economic hubs, benefits may concentrate in major cities like Toronto, Montreal, and Quebec City, leaving smaller municipalities with fewer direct gains and risking regional disparities. Passenger demand remains uncertain, particularly amid shifting immigration trends, and lower-than-expected ridership could weaken the project’s returns. Environmental and land-use concerns persist since building the line would require significant land acquisition, and could disrupt sensitive ecosystems or agricultural areas.
Whilst Alto was not listed among the first two sets of “major projects” announced by Prime Minster Mark Carney this fall, it has been included as one of seven “transformative strategies” identified by the federal government. If subsequently designated as a “major project,” the Major Projects Office could help to accelerate regulatory approvals and structure financing, bringing forward delivery timelines, and allowing Canadians to reap economic and social benefits sooner. Moreover, through the work of the Indigenous Advisory Council, designation would help to advance Alto’s vision of a nation-to-nation relationship with Indigenous Peoples, fostering economic reconciliation, and creating socio-economic benefits for communities.
Although some project details require further development, the federal government signalled its support for Alto in the 2025 budget by allocating more than $125-million of funding over the next five years, alongside a proposal to accelerate the project’s development. In the context of Canada’s push to drive investment and nation-building, Alto high-speed rail represents a sweet spot across much-needed transport modernization, and an opportunity for broader economic and social transformation.
Tasnim Fariha is a senior policy analyst with the C.D. Howe Institute, where David Jones is a senior fellow.