kEiThZ
Superstar
The running theory among some rail fans is that industry will come in with a top up. Apparently, the last TGV line built had 40% financing from private sector. So it's not entirely far fetched that the government's contribution of $8-12B attracts additional capital that results in something that is between that is between HFR, as originally envisioned and full HSR.
My concern is:
1) Everybody is vastly underestimating cost and performance. What happens when the bids come back and $20B reduces Toronto-Montreal to 4 hrs, and industry is just not willing to put up more to get shorter trip times because they doubt the business case? By the government's own estimate full HSR from Toronto to Quebec would cost $65B.
2) The ticket costs. YDS originally pitched HFR as a low cost, low risk alternative that would be affordable for the middle class. HSR that has to compete with airplanes will require fares on par with airplanes. What happens when we give industry a low cost $12B loan and end up with $200 HSR tickets that most of the population can't afford? The alternative will now be even longer trips through the Kingston hub. Imagine 7 hrs from Toronto to Montreal via Kingston for the same fares as today. Two tier service after a massive taxpayer subsidized loan. And this is all coming right as EVs further reduce the marginal cost of driving and automation reduces the stress of doing so.
Politically, they can try to box in Pierre Poilievre. I'm not sure it will work. Ultimately, governments have a lot of sovereign authority to get themselves out of contracts they don't like. And he may be willing to spend billions in penalties just out of spite. Wouldn't be the first time a leader did that. I do expect he'll run against any rail proposal. That's what opposition does. He'll probably argue that industry should be able to do it all on its own. He'll probably argue that this is all some Liberal insider play. The appointment of Pritchard isn't helping here. For example, imagine if SNC Lavalin is part of the winning bid. The hope among some railfans is that these large institutional investors and global infrastructure players being in the project will dissuade cancellation. Nobody will want to hurt Canada's reputation as a place for business. I guess we'll see. But I've not seen politicians place long term national interest ahead of petty partisan politics in a long time. And I have doubts that PP will be in the vanguard on this.
My concern is:
1) Everybody is vastly underestimating cost and performance. What happens when the bids come back and $20B reduces Toronto-Montreal to 4 hrs, and industry is just not willing to put up more to get shorter trip times because they doubt the business case? By the government's own estimate full HSR from Toronto to Quebec would cost $65B.
2) The ticket costs. YDS originally pitched HFR as a low cost, low risk alternative that would be affordable for the middle class. HSR that has to compete with airplanes will require fares on par with airplanes. What happens when we give industry a low cost $12B loan and end up with $200 HSR tickets that most of the population can't afford? The alternative will now be even longer trips through the Kingston hub. Imagine 7 hrs from Toronto to Montreal via Kingston for the same fares as today. Two tier service after a massive taxpayer subsidized loan. And this is all coming right as EVs further reduce the marginal cost of driving and automation reduces the stress of doing so.
Politically, they can try to box in Pierre Poilievre. I'm not sure it will work. Ultimately, governments have a lot of sovereign authority to get themselves out of contracts they don't like. And he may be willing to spend billions in penalties just out of spite. Wouldn't be the first time a leader did that. I do expect he'll run against any rail proposal. That's what opposition does. He'll probably argue that industry should be able to do it all on its own. He'll probably argue that this is all some Liberal insider play. The appointment of Pritchard isn't helping here. For example, imagine if SNC Lavalin is part of the winning bid. The hope among some railfans is that these large institutional investors and global infrastructure players being in the project will dissuade cancellation. Nobody will want to hurt Canada's reputation as a place for business. I guess we'll see. But I've not seen politicians place long term national interest ahead of petty partisan politics in a long time. And I have doubts that PP will be in the vanguard on this.