Air Canada, TGV train company join group bidding for high-frequency fast rail project

Air Canada and French train operator SNCF Voyageurs have joined a consortium vying to build and operate a new multi-billion-dollar fast electric train between Windsor, Ont., and Quebec City.
Cadence, one of three groups Ottawa picked in 2023 to submit detailed proposals for the future high-frequency train project, disclosed the last-minute additions of Air Canada and the TGV train operator as it submitted final bid documents to the government in late July.
Canada’s flagship airline, which has historically opposed high-speed rail projects involving cities on its most popular routes in Eastern Canada and Alberta, confirmed involvement but won’t share details, triggering criticism among rail advocates.
Paul Langan, a high-speed rail advocate in Canada for 25 years, welcomed SNCF Voyageur’s addition because it is an experienced train operator across France and Europe.
Air Canada’s move to join Cadence’s team at the last minute doesn’t sit so well, he said.
“It sure is suspect. A direct competitor who has fought against the rails for decades,” Langan said.
“The fact is that they have a well-known history to objecting to anything passenger-railed related.  I think they’re in it to try and control it. They’ll get all this VIA traffic and passenger data,” Langan added. “Certainly, a faster and more efficient rail speed would hurt them.”
What Air Canada gets — and how much it is investing in Cadence — is unclear. The airline said its commitments to the Cadence team “do not require any supplementary disclosure.”
Pressed for details during a conference call with investment analysts Wednesday, Air Canada executives said they were precluded from discussing the airline’s role because of strict government bidding and confidentiality rules, but tried to suggest its role was minor.
“It doesn’t come with meaningful deployment of capital,” chief financial officer John Di Bert said.
Air Canada said it aims to help with “the harmonious integration of a future intercity rail network with existing airport hubs in the Quebec-Windsor corridor, for the benefit of all travelers.”
The federal government’s proposed High-Frequency Rail (HFR) electric train network is slated to run on almost 1,000 kilometres of dedicated and mainly electrified tracks between Windsor and Quebec City, with stops in Toronto, Peterborough, Ont., Ottawa, Laval, Que., Montreal and Trois-Rivières, Que.
If it goes ahead, it will be the biggest Canadian infrastructure and transportation project in the 60 years since the St. Lawrence Seaway was built. It will likely cost taxpayers tens of billions of dollars.
That’s why the government is trying to enlist private partners to help finance and build it while offering the chosen companies a decades-long concession to operate the trains.
Cadence is a consortium made up of global companies, and a huge pension fund, with expertise in the design, development and operation of large-scale transportation infrastructure projects.
Other Cadence members include CDPQ Infra (the infrastructure investment arm of Quebec’s Caisse de Depot pension fund), SYSTRA Canada, Atkins Realis Canada (formerly SNC-Lavalin) and Keolis Canada.
The other two consortiums are:
Transportation lobby group Transport Action Canada (founded as Transport 2000 in 1977), is also displeased with Air Canada joining the Cadence team belatedly and the lack of transparency about it.
In a statement Wednesday, the group noted that Air Canada does have existing rail-air partnerships in Europe. “But for an airline to bid on HFR raises questions about conflict of interest, competition, and the transparency of the process.”
“Allowing one of three shortlisted consortia to reveal major changes in its composition only when it was too late for the others to respond was unfair,” Transport Action Canada added, saying the government has not answered any of its questions about it.
The federal government has created a separate Crown corporation called VIA HFR Inc. to manage the faster electric rail project, early work and its procurement.
VIA has previously said the project could cost taxpayers between $6 and $12 billion, but those estimates predate a period of fast-rising construction costs hit by inflation, which have hurt major pipeline and port construction projects across the country.
The government has refused to disclose updated figures.
It has already spent $500 million since 2019 to advance the electric railway effort through different federal departments and agencies.
That includes $43.7 million transferred to VIA HFR by Transport Canada in the 2023 budget.
VIA HFR has already hired more than 100 employees and plans to hire another 50-60 workers, CEO Martin Imbleau said in a recent question and answer session.
Imbleau said the project aims to cut rail times in Eastern Canada, boost business and economic development, and connect Toronto and Montreal and three capitals in two provinces.
“This project is no longer a luxury. It is a necessity,” Imbleau told VIA HFR’s annual meeting in June.
Imbleau said he didn’t think federal Conservatives would axe the project if they win the next election.
In Europe, governments are clamping down and trying to restrict many short-haul airplane flights to curb aircraft emissions pollution amid climate change, a move that favours existing rail networks.
French lawmakers are trying to ban short flights between Paris and cities already connected by TGV high-speed trains, such as Lyon, Nantes and Bordeaux, something Air Canada must be watching closely and with some trepidation, Langan said.
Air Canada appears to be getting a foot in the high-speed rail door ahead of any future move to curb short-haul flights here, to mitigate any potential future losses. Estimates of Air Canada’s potential loss of traffic to a higher-speed train electric network range from 11 to 40 per cent, Langan said.
Aviation analyst Addison Schonland speculated the airline’s alliance with SNCF Voyageur in Cadence also may be a business development play aimed at luring future French tourists with a fast and integrated Eastern Canadian flight-rail network. (Air Canada has such deals with SNCF in Paris.)
Cadence said the federal government is expected to announce its pick for preferred project partner by year-end. The selected consortium will then build, finance and help operate the train network in partnership with the government.