Infrastructure agency to pitch in to help move along Via Rail project: sources
Rail company wants to build a multibillion-dollar new network of dedicated passenger-rail lines in Ontario and Quebec.
OTTAWA—The federal infrastructure bank is going to put some money behind a few final, financially risky steps in Via Rail’s high-frequency rail project, sources say.
The rail company wants to build a multibillion-dollar new network of dedicated passenger-rail lines in Ontario and Quebec, so its trains will no longer have to yield to freight trains on borrowed tracks.
Announcements are promised Tuesday in Trois-Rivieres, Que., with Transport Minister Marc Garneau and Infrastructure Minister Francois-Philippe Champagne, and also in Peterborough, Ont., with Gender Equality Minister Maryam Monsef, the local MP.
A planning advisory said an announcement would be made “related to the advancement” of Via’s proposed rail corridor between Quebec City and Toronto.
Two sources, speaking on condition of anonymity because the details are not yet public, say the Canada Infrastructure Bank will cover the financial risk for the last studies, among other requirements, needed before any new rail lines are built.
The sources didn’t say Monday how much money will be provided, or what would specifically be funded, but the agency’s backing could help Via more easily find a private partner to cover the cost of a proposal that has been under review for more than a year.
Transport Canada has been looking over the Via proposal for more than a year. Garneau’s department planned this year to review revenue and ridership forecasts as well as the overall business case to help officials craft options for government consideration.
The infrastructure bank has long been eyed as a key source of money for the project, given its mandate to “de-risk” projects at an early stage in order to draw in private backers when real construction work gets underway.
So far, the agency has gotten involved in two projects, first with a $1.28-billion loan to an electric-rail project in Montreal, and last month with up to $2 billion in debt to expand GO Transit’s rail network around Toronto.
Via estimates building dedicated passenger-rail tracks connecting Toronto, Ottawa, Montreal and Quebec City and buying new trains for them would cost $4 billion. The result would be faster, more frequent, more reliable service, the company says. High-frequency rail is different from high-speed rail, which would also need dedicated tracks for much faster trains, and which would likely be much more expensive.
Documents tabled in Parliament earlier this month provided a window into the talks the agency, the Finance Department and Via Rail were having about the high-frequency rail proposal.
The response to a written question from Trois-Rivieres New Democrat Robert Aubin said a range of public-private models are still being assessed “with varying degrees of private sector investment.” Options include having a private partner help with designing and building new tracks or devising a broader deal to include financing, operating and maintenance agreements.
The Liberals created the infrastructure agency in 2017, hoping to use $35 billion in federal funding to pry three to four times that much from the private sector to pay for new infrastructure projects that are in the public interest.
In practice, that means projects need to meet federal policy objectives, along with those of the jurisdiction housing a particular project. Projects must also be attractive to the private sector, meaning they need to bring in money to pay off investors.