By Kathryn Exon Smith and Egon Terplan
On February 19, 2025 the federal government announced the first phase of design work on a high-speed rail (HSR) line linking Toronto and Quebec City. Named Alto, the network will cover the 1,000 kilometres between the two cities with a dedicated passenger line, running electric trains at up to 300 kilometres per hour (kph). The project has the potential to be transformative for Canada’s economy and the roughly 18 million residents living in the corridor, generating billions in GDP and reducing travel times by half between some of Canada’s biggest cities. But the hefty anticipated price tag – which some have estimated at over $80 billion – and lengthy timeline for completion mean it is essential to make the most of this investment in mobility by learning from other high-speed rail projects in North America. In particular, there is much to learn from the experience of planning and constructing high-speed rail in three projects in the United States: Amtrak’s Acela in the Northeast, Brightline in central Florida, and California High-Speed Rail. What follows are three key decisions for Alto suggested by looking at these American projects.
Decision 1: Where to locate stations: city centre or city edge
Choosing where to locate stations is a critical early decision, as it shapes the path of the alignment. Stations in the city centre are best for urbanism, but can complicate delivery and increase construction costs. Downtown stations reinforce existing centres, support downtown recovery, and bring the potential for significant transit-oriented development. They also connect with local and commuter routes, creating stronger network effects and encouraging mobility across different scales. Airports, in contrast, bypass the city centre and are often located on a region’s edge.
In Miami, the centrally located station at the terminus of the Brightline high-speed route from Orlando, which opened in 2023, has spurred several new office, retail, and residential projects, including a multi-family and mixed-income development aimed at local workers. Acela trains connect midtown Manhattan with Washington D.C. in less than three hours, speeds that are not possible with air travel when factoring in security and to and from city centres from the airport.
However, construction in centre cities is more complex and can drive up construction costs, particularly if it requires tunnelling or elevated construction. It can also mean higher infrastructure costs from bridges, relocating utilities, and building new streets. Disruption to roadways and travel within the city is also a consideration. HSR stations can add to existing congestion and create new demand for parking, as some rail travellers will want to park near the station, just as they do near an airport. Adding traffic to congested areas may in turn complicate station selection. For example, Union Station in Toronto would be an obvious terminus point, but space constraints have already prompted Metrolinx to look for alternatives for high-traffic interchange stations, including Queen and Osgoode stations for the downtown Ontario Line connections, and East Harbour for future GO commuter lines entering the city.
Right-of-way acquisition in city centres and through more densely populated areas can also be challenging and expensive, with lawsuits and permitting slowing down the process. The California case is illustrative here. The alignment selected will go along the Highway 99 corridor in the state’s Central Valley, which allows it to pass through existing cities and bring rail service to the more than three million people living in the counties around five proposed stations. However, an alignment through existing communities requires much more extensive negotiations with property owners. Settling lawsuits from the many small parcel holders in the cities has added at least 5 years to the planning process, though the long-term trade off will be greater access for these fast-growing cities and greater potential ridership once the line is built. Still, many in California continue to question why HSR was not routed along Interstate 5, which largely runs through undeveloped land on the valley’s west side.
Decision 2: Whether to upgrade incrementally or build a visionary project entirely from scratch
As Canada’s first significant new long-distance passenger rail project in a century, the Alto line has the potential to significantly reduce travel times and pave the way for other rail projects across the country. But its critics have argued that the price tag will only be justified by offering far superior alternatives to existing options. This presents a choice: whether to upgrade the existing route over time or build new high-speed rail infrastructure along a new alignment.
Today, travel times on rail from Toronto to Quebec City can regularly be over 10 hours. By building a new alignment between the cities, travel times could drop by as much as two thirds. Making a public commitment to specific travel times (such as three hours from Toronto to Montreal) may serve as an inspirational rallying cry to shore up initial political and voter support for a truly transformational project. The government’s shift in language from the original “High Frequency Rail” proposed in 2016 to “High Speed Rail” with its 2025 announcement indicates that it sees greater potential benefits from investing more to achieve shorter travel times. But achieving these reductions requires more investment, and it may take longer to realize any tangible benefits, potentially affecting political support over time.
A targeted travel time was the approach taken in California, with part of the project’s funding contingent on a commitment to no more than two hours and 40 minutes between San Francisco and Los Angeles. To meet this goal, construction began in the middle of the route – in the flat, less-densely-populated region of the Central Valley, which allowed for building high-speed capability from the outset. But the construction activity was away from media and voters in Los Angeles and the San Francisco Bay Area and – despite nearly a billion dollars spent on projects in those areas – there was a consequent dip in support that came from less public visibility of the progress, with many critics dubbing the route a “train to nowhere.”
An alternative approach to building new high-speed tracks from scratch would begin with incremental upgrades to existing segments, making them electrified corridors with passenger prioritization. This would require new agreements with the freight companies that own much of the existing track, a challenge in the past, in addition to capital improvements. However, it can produce early political wins and bring benefits sooner, building momentum for further rail investment and giving travellers on high-ridership corridors an opportunity to experience faster travel by rail. In California, some transit advocates are calling for high speed rail to put more of its funding into the major cities as a way to shore up statewide political support, even while continuing to acquire right of way and lay track in the Central Valley. For example, efforts to electrify the existing commuter line between San Francisco and San Jose in preparation for eventual HSR service have proved popular, and are already bringing travel time improvements in the Bay Area.
In the Canadian case, electrifying and upgrading one key segment first – for example, the Montreal to Ottawa connection – would bring economic and travel time benefits to both cities, with the added benefit of giving federal agency staff and MPs a chance to experience rapid rail, and thus advocate for its further expansion. This incremental improvement is the approach that Amtrak took with its Acela line in the Northeast, focusing first on upgrading the tracks around New York City, the densest part of the country for rail travel and still the core of Acela service. Brightline’s incremental approach saw it open with service between Fort Lauderdale and West Palm Beach before extending to Miami and Orlando over the next five years. Ridership on Brightline is triple what was expected, and the line is now expanding to Tampa. It is important to note that Brightline made use of an existing but no longer used rail alignment, so did not need to acquire any new right of way.
Incremental improvements can also keep costs lower and reduce the risk of overengineering for only small improvements, which has been a cause of spiralling North American urban transit costs. But the downside of the incremental approach is it may never reach truly high speeds. The Acela line maxes out at 250 kph and Brightline at 150 kph, far slower than what is proposed for Alto.
Decision 3: How to fund construction — and maintenance
One of the most important factors in Alto’s success will be securing stable and reliable funding, sufficient to complete key segments. A stop-and-go approach will inevitably take longer and cost more. Potential sources of revenue include long-term financing from the federal or provincial governments, public-private partnerships to leverage the value created by the initial public investment, and innovative financing tools such as value capture.
Funding for capital improvements of Amtrak, the American equivalent of Via Rail, is provided through a mix of federal and state funding, including a significant boost from the 2021 Infrastructure Investment and Jobs Act. The single largest ongoing source of California HSR funding is 25 percent of the proceeds of the state’s cap-and-trade funding, but this will end in 2030 unless extended. These examples highlight the challenge with public funding: it is irregular and unpredictable. Unlike roads, transit funding is politically controversial, and often subject to cuts with a change of government or public mood.
Securing multiple funding channels from different levels of government or private partners is one way to protect against this unpredictability. Public-private partnerships in building transit in Canada have come under scrutiny in recent years, but they have proved successful in rail development elsewhere: Brightline in Florida was constructed with mostly private funding, with real estate development along the network as a core component. The organization is now constructing a second HSR line from the outskirts of Los Angeles to Las Vegas, which is expected to be open in time for the 2028 Olympics. The private partner consortium selected for Alto will co-design, build, finance, operate, and maintain the project in collaboration with the Government of Canada, but rather than seeing this as a full outsourcing, it will be essential to have internal government expertise to guide the project’s parameters and monitor progress. It will also be critical to ensure that Alto’s funding does not take away from funding other transit, whether municipal or inter-city.
Canadian planners may also look for funding examples from Japan and Hong Kong, where ongoing rail operations receive funding from station area development. In Japan, JR East receives no government subsidy to operate and generates nearly half its revenue from real estate and other related activities. Other potential sources of revenue include land value capture – levying taxes on the land surrounding stations as it increases in value – which has been successful in Vancouver. California has also explored using the rail right-of-way for distributed clean energy generation, and combining increases in gas taxes with new forms of road pricing to pay for rail projects. As revenues from gas taxes are declining with higher uptake of zero emissions vehicles, shifting to road pricing (tolls or vehicle miles travelled charges) is also currently under study as a replacement, though these remain controversial in many parts of Canada.
Beyond the construction phase, Alto’s leadership must present a plan for funding future and ongoing operations and maintenance, which has been lacking in other Canadian transit initiatives. Existing transit systems are creaking from decades of underinvestment in state-of-good-repair: Via Rail’s operational fleet has been at the end of its useful life for some time, leading to increased maintenance costs and safety risks. Municipal transit systems across Canada are facing operating shortages and maintenance backlogs in the billions of dollars annually. The long-term viability of high-speed rail in Canada will depend upon it having a reliable source of funding not just through the completion of construction but on a permanent basis.
This is an exciting time for Canada: high-speed rail has the potential to not only transform how we travel, but also to bring major economic benefits. Development around stations will bring new housing and economic activity. Creating and building a new system will grow our design and manufacturing expertise. How successful we are depends on getting the big decisions right.
About the authors
Egon Terplan is a Senior Fellow at UC Berkeley’s Institute of Transportation Studies and a Senior Advisor to CA Forward focused on regional economic development. He has also written about high speed rail as an economic development project.
Kathryn Exon Smith is a senior research officer at the School of Cities, where she focuses on research and partnership engagement in infrastructure, transit-oriented communities, and equitable development.
