VIA Rail

[robmausser]

If anything, I suspect that there is a backroom deal with Ottawa saying "OK, we will accept your building a rail line that competes Toronto-Ottawa, but we airlines get competitive advantage on Toronto-Montreal".

- Paul

What do you propose VIA do?

There is no alignment that VIA can own that goes directly between Toronto to Montreal that bypasses Ottawa. The current CN route is not on the table, nor will it ever be. They will not allow passenger priority and they especially wont allow electrification.

Any HSR would still use the Toronto > Ottawa > Montreal route and Toronto to Ottawa will always be faster because its closer.

The as-is HFR plan is still an improvement because even the fastest current VIA time from Toronto to Montreal of 4 hours and 50 minutes for the late train is a complete lie. Ive never once in the 20 trips Ive taken from Toronto to Montreal been on time. It averages 5.5h.

HFR will be a big improvement over this because it will be reasonably on time.

Also, 3 hours for flight time from downtown Toronto to Montreal is a pipe dream when you factor in security, etc etc. Maybe with REM but even still thats pushing it.

 

[crs1026]

What do you propose VIA do?

It's not VIA that needs to do something. It's Ottawa.

My serious belief is that CP and CN ought to be forced into co-production, freeing up one of three main lines between Toronto and Montreal. I would put CP on CN in one direction, and CN on CP in the other on the premise that this creates the greatest balance in interests/power between the two railroads, and is a template they are familiar with on lines south of Sudbury and west of Kamloops.

That leaves VIa with one of the two tracks on the CN mainline, plus the sections of triple track (which are admirably placed to enable meets on an hourly service). VIA can enhance speed on that track, add sidings, or add a third track.

There would have to be an expropriation discussion, but I'm confident the price would not come in different than HFR. Frankly, if CN and CP were each slipped a billion dollars' signing bonus, it would be a bargain. I don't believe they would argue all that hard if there were money on the table.

Ottawa can begin an investment fund, banking an amount every year against the day when the freight railways need more capacity - that won't happen for a couple decades, or longer. The coproduction zone west of Kamloops currently handles triple the volume of the Toronto-Montreal rail business, and over much harsher terrain. Say $20M per year, an amount that is affordable within the VIA envelope. Pass a law requiring long term zoning and land use such that a widened right of way can be created over decades.

It's pretty close to a fantasy scenario, and that's the whole point..... the public policy around rail passenger is so hands-off it's ridiculous.

I do sympathise with VIA trying to keep its head above water under a regime with a policy of "abandonment by neglect".

- Paul

 

[kEiThZ]

The Catalan issue means that HSR in Spain is also a national unity project. So maybe if separatists gain ground in Quebec...

The separatists are massively helped by the Montreal-Quebec segment that cuts travel time to just over 2 hrs. It's arguably the segment that benefits the most. Massive cut in travel times from 3:21 to 2:10. Competitive with driving and flying.

Meanwhile, bolstering ties between Toronto and Montreal....

 

[Darwinkgo]

Pass a law requiring long term zoning and land use such that a widened right of way can be created over decades.

Yeah, that isn't happening. There is legal precedent from Alberta that as soon as land is so designated, the land owners can force the government into expropriation proceedings. You can always expropriate later, and put in safety standards that make building too close to the corridor onerous (which is already happening).

That isn't even touching on federal-provincial jurisdictions about land use planning.

 

[kEiThZ]

Also, 3 hours for flight time from downtown Toronto to Montreal is a pipe dream when you factor in security, etc etc. Maybe with REM but even still thats pushing it.

Why? Looking at aviation data, Porter averages about 1 hr gate to gate. Union Station to Island Airport is 20 mins by transit or 15 mins by cab. Porter recommends 1 hr pre-boarding. And the REM website says 20 mins from airport to downtown with 10 min frequencies at peak and 15 mins off-peak. Add all that up and it's 3 hrs. But if you want to be generous, 3.5 hrs max.

HFR is going to have some pre-boarding time. Let's assume 15 mins and no disembarkation time. That's still at least 1.5 hr penalty by rail. This is why I argue they should get the funds to cut at least another 30 mins from the trip. Preferably 45 mins.

Ottawa-Montreal is interesting too. In how little they are investing in it. $91.5M to go from 1:58 to 1:33. But as Urban Sky pointed out they had scheduled 1:35 before. So the funds are probably just enough to reduce congestion and ensure consistent timings. Yet, every minute cut here drives a whole new market: Intercity commuters. Getting this down to 1:20 or less, makes this line borderline commutable daily. The question is what would it take to cut another 13 minutes.

 

[crs1026]

Yeah, that isn't happening. There is legal precedent from Alberta that as soon as land is so designated, the land owners can force the government into expropriation proceedings. You can always expropriate later, and put in safety standards that make building too close to the corridor onerous (which is already happening).

That isn't even touching on federal-provincial jurisdictions about land use planning.

Well, that's why you pass laws - to change the rules so past precedent doesn't govern any more.

The federal-provincial-municipal thing is not that big a deal IMHO. The Feds say, look, we are not asserting jurisdiction, but there is a reality that we will need another rail corridor one day. So we are directing you to go ahead and plan it in your land use planning. By the way, we would be perfectly happy if you planned it as a widening of the existing corridor, but if you decide you want it somewhere else, thereby leading to an expropriation some day right through the communities you have planned and built.... be careful what you ask for.

- Paul

 

[Darwinkgo]

Well, that's why you pass laws - to change the rules so past precedent doesn't govern any more.

They tried that and it failed - good ol regulatory taking is just the same as expropriation and demands similar compensation. The government can't get things for free.

Set the corridor you want, restrict new development, and set aside a budget allocation for anyone that wants compensation today, or at any point in the future until you need to expropriate what is left when you finally need to build. It isn't rocket science.

 

[kEiThZ]

If anything, I suspect that there is a backroom deal with Ottawa saying "OK, we will accept your building a rail line that competes Toronto-Ottawa, but we airlines get competitive advantage on Toronto-Montreal".

- Paul

Could be true. But... With airport congestion getting to what it is, would AC and WestJet really care to have some demand (outside of Covid) bled to VIA? I doubt it. There's enough feeder traffic on their network to fill an hourly schedule. The question is really one of aircraft size.

Also, if I were AC and WestJet, I might consider that a decent rail service does far more damage to Porter then it does to them, relatively speaking. Porter's business in Ottawa and Montreal is substantially origin-destination. Far less of their business is transiting through YTZ. On the other hand, the larger carriers give up a handful of rotations out of YYZ and downsize the aircraft operating those routes. Small price to pay to watch rail possibly take out or at least substantially reduce a competitor.

 

[robmausser]

It's not VIA that needs to do something. It's Ottawa.

My serious belief is that CP and CN ought to be forced into co-production, freeing up one of three main lines between Toronto and Montreal. I would put CP on CN in one direction, and CN on CP in the other on the premise that this creates the greatest balance in interests/power between the two railroads, and is a template they are familiar with on lines south of Sudbury and west of Kamloops.

That leaves VIa with one of the two tracks on the CN mainline, plus the sections of triple track (which are admirably placed to enable meets on an hourly service). VIA can enhance speed on that track, add sidings, or add a third track.

There would have to be an expropriation discussion, but I'm confident the price would not come in different than HFR. Frankly, if CN and CP were each slipped a billion dollars' signing bonus, it would be a bargain. I don't believe they would argue all that hard if there were money on the table.

Ottawa can begin an investment fund, banking an amount every year against the day when the freight railways need more capacity - that won't happen for a couple decades, or longer. The coproduction zone west of Kamloops currently handles triple the volume of the Toronto-Montreal rail business, and over much harsher terrain. Say $20M per year, an amount that is affordable within the VIA envelope. Pass a law requiring long term zoning and land use such that a widened right of way can be created over decades.

It's pretty close to a fantasy scenario, and that's the whole point..... the public policy around rail passenger is so hands-off it's ridiculous.

I do sympathise with VIA trying to keep its head above water under a regime with a policy of "abandonment by neglect".

- Paul

Unless we change to a completely socialist country, this will never ever happen. Lets stick to realistic goals.

 

[micheal_can]

Unless we change to a completely socialist country, this will never ever happen. Lets stick to realistic goals.

You mean like Britain?

 

[Urban Sky]

It's Orange Shirt Day today, but if you haven't heard of it yet or don't know what it is about, I warmly invite you to read this sobering article...


***


But back to the topic at hand and just a quick reply to these two comments:

Sure. But even the HFR proposal, as per the rumours we've had, doesn't seem robust. It seems to literally be the most barebones possible. Which, if we're not getting HSR for several decades seems sad. I get the fear of scope creep. But surely there is some middle ground where they can do CAIV Analysis to invest towards a more optimal system.

Do you really think that a bank which has been set up to bring public infrastructure projects and private investors together would not prepare multiple scenarios to adjust their pitch to the financial involvement these investors (private or public) would be willing to commit?

And to all people who obsess here about "low-hanging fruits", I would like to hear your answers for the following questions:

1. How is the Benefit-Cost Ratio (BCR) calculated for a given project?
2. How is the Internal Rate of Return (IRR) calculated for a given project?
3. What are the main determinants of the BCR and IRR for HFR?
4. How do the BCR and the IRR change if you harvest the "low-hanging" fruits (i.e. by spending the $91.5 million on OTTW-MTRL) before HFR gets approved and funded?

I also have questions for those who believe that HFR is not ambitious enough:

1. What are the main determinants of the BCR and IRR for HSR?
2. How does every additional minute shaved off from the HFR travel time affect the BCR and IRR for HSR?
3. How does double-tracking or electrification of HFR affect the BCR and IRR for HSR?

Only in Canada, do we spend billions, ignore low-hanging fruit opportunities and claim that any more ambitious (reasonable in the rest of the world) objective is an obsession. The Madrid-Zaragoza-Barcelona corridor is of similar length ~600km, is anchored by similar population metro areas as Toronto and Montreal and yet, Spain built HSR that made the travel time 2h30min between Madrid-Barcelona. That's how you compete with flying and driving on this corridor. Even if there is a case for HFR, it's silly that in 2020, we think we should build the simplest and cheapest proposition that other countries have had since the 1950s (if not earlier) and ignore any serious attempt to actually win over mode share with HSR.

What's really frustrating is we don't have political economy frictions that other countries struggle to overcome. We've had majority federal government after majority federal government ignore railways. It's simply a lack of will (or ignorance?) that prevents HSR on this corridor. A minister that took one look at Spain (or elsewhere) could come back and literally demand/fund it in to existence. Instead we pretend that ministers are limited by the knowledge of technocrats who can't fathom building HSR.

I don't understand why HSR proponents in this country are so obsessed with Spain, but if I wanted to convince any politician (especially conservative ones or those with a particular interest in fiscal policies) of the merits of HSR, Spain is definitely the absolutely last HSR nation I would mention to them, given the abysmal value-for-money they represent to the taxpayer:

Source: re-post from Comment #636


Let's be absolutely clear, Spain is nothing else than the living proof that there is a way to somehow quintuple your HSR network while failing to grow overall rail ridership faster than your population:

Source: re-post from Comment #2,616


Show any politician in Canada the following table and they will point out the same two countries which we should definitely not try to emulate, just like they won't be impressed that the (relative) length of a Nation's HSR network only explains 11% of its rail ridership:

Source: re-post from Comment #1,746 in the Quebec-Ontario HSR Study thread

 

[kEiThZ]

Do you really think that a bank which has been set up to bring public infrastructure projects and private investors together would not prepare multiple scenarios to adjust their pitch to the financial involvement these investors (private or public) would be willing to commit?

I would sincerely hope so. But all the public information doesn't seem to show multiple options and value investment being considered. A normal clue would be when budgets are given as a range instead of a fixed number. We don't see that.

To be clear, I trust VIA and its staff. It's the government's instructions to the JPO that I'm less confident about.

And to all people who obsess here about "low-hanging fruits", I would like to here your answers for the following questions:

This would be very difficult without their modeling assumptions being published.

Ultimately, the discussion that we're having. And some of the pessimism is a result of the lack of information. I get that VIA is in a delicate spot with commercially sensitive information and its obligations to government. Wish they would provide more info on their thought process at least on HFR. Just think of what the discussion here would be if you weren't around.

 

[Allandale25]

Brief HFR mention here.

Infrastructure bank to unveil plans to invest billions in priority areas

Among the priority areas are agricultural infrastructure in Western Canada and broadband to expand access to high-speed internet service

financialpost.com

 

[crs1026]

Do you really think that a bank which has been set up to bring public infrastructure projects and private investors together would not prepare multiple scenarios to adjust their pitch

And to all people who obsess here about "low-hanging fruits", I would like to hear your answers for the following questions:

1. How is the Benefit-Cost Ratio (BCR) calculated for a given project?
2. How is the Internal Rate of Return (IRR) calculated for a given project?
3. What are the main determinants of the BCR and IRR for HFR?
4. How do the BCR and the IRR change if you harvest the "low-hanging" fruits (i.e. by spending the $91.5 million on OTTW-MTRL) before HFR gets approved and funded?

I also have questions for those who believe that HFR is not ambitious enough:

1. What are the main determinants of the BCR and IRR for HSR?
2. How does every additional minute shaved off from the HFR travel time affect the BCR and IRR for HSR?
3. How does double-tracking or electrification of HFR affect the BCR and IRR for HSR?

To be clear, like @kEiThZ, I trust VIA fully, and I admire those (YDS being one) who conceived and propelled this proposal through the eye of the needle. When all else has failed, this may come to be. That’s impressive. Also to be clear, I have never argued for HSR. If you scan back through this thread, I tried to speak about HxR, the point being what we need are BT - better trains - and not replicating some other country’s trophy railway.

As to those questions - I don’t know the detailed methodology, but I do appreciate the need to have in hand very good answers to such when one approaches one’s Board seeking large amounts of capital to propose a new venture.

My point is, the purpose of those numbers is to demonstrate sound judgement and generate confidence, not to arrive at a scientific projection of future dividend payments. If those formulae and methods were how Ottawa sets policy, they would be in a big manual on line somewhere, and every initiative proposed by Crown agencies would use them, and nothing would squeak through without equal fiscal merit. That isn’t so. We have VIA being forced through a boot camp obstacle course that would make USMC recruits quiver, while in the next lane, government executes other procurements using other criteria (or none at all, as we saw with WE) and with much more straightforward funding processes. I am criticising Ottawa, not VIA, who are undoubtedly being held to ridiculously strict decision rules.

I have no doubt that the proposed line will run in the black. But consider what happens when the investors come forward and ask, can we have growth, and the only answer is, “we built in the wrong place for that”

In my little circle of average citizens, I hear not a peep of dissent to the HFR proposal. They don’t care about the details, and the general buzz about IB and careful study has deadened any sense this is a boondoggle. When they hear “ the government is trying to make the trains better”, they nod appreciatively. It’s an idea with broad acceptance in Central Canada. But when they go to ride, and they find that is’s five+ hours to Montreal, they may not like what they see.

I would sure like to see the numbers for this route evaluated in relation to more direct routings.

HFR will be pleasing, and by running in the black it’s bulletproof. But as a case study for how government policy is advancing key goals around productivity, mobility, road safety, etc etc, it’s a failure unless one can show gains for Ontario-Quebec more broadly. Satisfying investors with a Toronto-Ottawa service but leaving passengers elsewhere on the platform is not good policy.

- Paul

PS - re question 2 - I think I have been consistent in pointing out that when you incrementalise that question on a curve by curve basis, you reach the wrong answer. The ROI on straightening the Manvers curve will certainly be negative, but the ROI on taking a half hour off end to end trip time may be positive. Plus, the relationship that matters for public investment is not speed directly to ROI, it’s speed to ridership to ROI. Let’s see VIA’s numbers on ridership and market share and reduction in auto use at various speed levels. And let's dwell on what the impact of that added ridership will be beyond the investors' return.

 

[SFO-YYZ]

Why? Looking at aviation data, Porter averages about 1 hr gate to gate. Union Station to Island Airport is 20 mins by transit or 15 mins by cab. Porter recommends 1 hr pre-boarding. And the REM website says 20 mins from airport to downtown with 10 min frequencies at peak and 15 mins off-peak. Add all that up and it's 3 hrs. But if you want to be generous, 3.5 hrs max.

HFR is going to have some pre-boarding time. Let's assume 15 mins and no disembarkation time. That's still at least 1.5 hr penalty by rail. This is why I argue they should get the funds to cut at least another 30 mins from the trip. Preferably 45 mins.

Ottawa-Montreal is interesting too. In how little they are investing in it. $91.5M to go from 1:58 to 1:33. But as Urban Sky pointed out they had scheduled 1:35 before. So the funds are probably just enough to reduce congestion and ensure consistent timings. Yet, every minute cut here drives a whole new market: Intercity commuters. Getting this down to 1:20 or less, makes this line borderline commutable daily. The question is what would it take to cut another 13 minutes.

Several points here:

1. Not everyone uses Porter or YTZ for travel to Montreal. I know a number of my colleagues who fly exclusively from Pearson to YUL (better airport facilities, lounge, bigger planes, other personal reasons).
2. Union to YTZ is 20 min by transit, but also factor in time to get to Union station. My office is downtown but I've lost count how many times I've sat in Uber stuck in downtown traffic, often times taking 30 min + to drive to YTZ from a downtown office.
3. Frequent delays arriving in and departing from YTZ airport. YTZ has a 10 pm landing time cutoff (not sure if it's a hard rule but frequently cited by airline staff), so if you couldn't land before then, your plane has to be diverted to YYZ (happens to me 10% of the time for night arrivals). In cold weather, YTZ runway also has limitations which cause frequent diversions to YYZ (or even worse, twice we've had our YTZ bound plane diverted back to Montreal half way during flight due to extreme cold conditions in YTZ).

The realistic travel time between YTZ and YUL, when you factor in the above, is more likely 4 hrs (or more, depending on how long it takes for you to arrive at YTZ, minus any delays or equipment maintenance issues which seem to happen frequently to the YTZ propeller fleet). As for Pearson-YUL, it's easily 5-6 hrs door to door.