News from the Hill: Why I oppose Alto

I oppose the ALTO high speed project because of the harm that it will do to communities along the thousand-kilometer route. I’ll give more details below. But first I’d like to present the business case against ALTO. 

The ALTO project is projected, by its promoters, to cost as much as $90 billion. To cover the construction cost, a series of bonds will be floated. If the 3.5% interest rate currently being paid by the federal government on long-term bonds is also paid on ALTO bonds, the annual cost of financing the interest costs on the construction of ALTO will be over $3 billion. 

Add in the cost of actually operating the high-speed trains, and the total annual cost of ALTO will likely rise to $7 billion. To break even, it would therefore be necessary to generate at least $7 billion in revenues from passengers. So if 24 million travellers take ALTO each year (as ALTO’s promoters predict), tickets would have to be about $300 each. But it currently costs only $200 to fly from Toronto to Montreal, and air travel is faster than ALTO. 

This is one reason why scholars at McGill University estimate that ALTO’s ridership is likely to be less than 40% of the official projection. But if McGill’s ridership estimate is correct—and if raising the practical cap on ALTO tickets turns out to be the cost of travelling by air, then the combination of low ridership and low ticket prices will cause ALTO to add as much as $5 billion to our annual deficit, for decades. 

It is my hope that the business case against ALTO will cause Canadians from coast to coast to tell the government to abandon the project. But the real case against ALTO is that it is absolutely inexcusable to impose so much damage to the communities along the route. 

ALTO can only go forward if thousands of properties that lie in the way of the tracks are expropriated by the government. In some cases, this will result in people being forced out of their homes. In others, it will result in properties being bisected, with the property-owner being left with two bisected halves, and a long trip to the nearest overpass, to visit the rest of the property, on the other side of the tracks. In some cases, this will cause a precipitous drop in property values. 

To speed up the expropriation process, new legislation strips away some of the protections for property owners that are normally required under the terms of the Expropriation Act. 

Worse yet, ALTO will have the power, while it is determining which lands it might want to exproporiate, to put development freezes on every property that might be expropriated. These freezes, which can last up to four years, will be subject to compensation for the otherwise fortunate property owners who don’t get expropriated—but compensation happens only at the end of the period, and only after the owner submits evidence as to costs that the government chooses to accept. 

This has prompted a researcher at the Canadian Constitution Foundation to observe that “homeowners would receive whatever the government chooses to pay without any say in the matter.”

In short, ALTO could cause enourmous harm, at mind-blowing cost, and then attract almost no ridership. On this basis, it is clear that the high-speed rail project should be stopped.

By Scott Reid, MP

The views expressed in the News from the Hill column are those of the author and do not necessarily reflect the views of Hometown News or its editorial staff.