Budget officer sees Alto high-speed rail at C$75bn–C$113bn, with overruns likelier

Canada’s Parliamentary Budget Officer puts the Alto high-speed rail cost at $75 billion to $113 billion, a range whose upper end exceeds the government’s $60 billion to $90 billion estimate.

The cost analysis published on October 1, 2026 treats $75 billion as its central estimate and sets the upper end at $113 billion. Because the line would be a new build for Canada, the budget office judged that the project is more likely to go over budget than under it. All figures are in 2024 Canadian dollars and cover construction of the baseline route only.

The range leaves out the southern option through Kingston, which the government asked Alto to assess on June 22, 2026. A Kingston route would add uncertainty, in the budget office’s view. The analysis answers a request from the Standing Senate Committee on National Finance and is the first of two parts; a follow-up report will test whether forecast ridership is enough to sustain operations.

How the budget office reached its range

The estimate draws on a Transit Cost Project database at New York University’s Marron Institute of Urban Management covering 94 dedicated high-speed lines that the report describes as complete or nearing completion. For 57 of them, the data were detailed enough to measure how tunnels, elevated track, start year and region shape the cost per kilometre.

Alto is often described as a 1,000-kilometre line, but the budget office assumed no more than 850 kilometres of new track, close to the road distance between Toronto and Quebec City by way of Ottawa and Montreal. On that basis, the government’s range equals about $71 million to $106 million per kilometre. The budget office’s own figure works out to $88 million to $133 million, against an international median of $82 million.

Its baseline assumes that Canada builds with the cost efficiency typical of past European projects and that construction starts in 2029.

Even the upper end of the budget office’s estimate stays below the most expensive tenth of lines in the sample. High Speed 2 and California’s Merced–Bakersfield segment are unfinished, so their final costs may exceed the reported figures. International costs are converted from 2023 purchasing power parity to 2024 Canadian dollars, and Alto figures assume 850 kilometres of new track. Source: Parliamentary Budget Office, Table 2 and Figure 2.

Tunnels near Montreal and Canadian Shield terrain

The budget office singled out two stretches of the route. It assumed roughly 15 kilometres of tunnel under Mount Royal to connect Laval and Montreal. Between Ottawa and Peterborough, about 130 kilometres could cross the Canadian Shield, where trains running at 300 km/h would need extensive rock cutting and filling. The model treats that terrain as 100 kilometres of elevated structure.

Each additional kilometre of tunnel would add about $169 million to the total, within a range of $142 million to $196 million, and each additional kilometre of elevated track about $153 million. Timing matters too: every year that the construction start slips is associated with roughly $1.5 billion in extra cost, as real construction costs for high-speed lines have risen internationally.

Annette Ryan, the Parliamentary Budget Officer, said Canada’s legislation is meant to avoid the overrun drivers seen in American and British projects, but added:

“Canada’s route geography has some significant cost escalators — most notably tunnelling in and around Montreal, and the complexities of the Canadian Shield portion”

Where the budget office sees the larger risk

The report rates institutional and project-management risks above engineering ones. After adjusting for tunnels, elevated track and start year, projects in the United Kingdom and the United States came out about 4.5 times costlier than European ones, within a range of about 3 to 7.3 times. That estimate rests on only three UK and US observations. The gap comes mainly from two very expensive cases: California’s Merced–Bakersfield segment, slowed by land and permit problems, and High Speed 2 between London and Birmingham, affected by design and management shortcomings.

Two federal laws aim to narrow that gap. Bill C-5, the One Canadian Economy Act of June 26, 2025, fast-tracks large projects. The High-Speed Rail Network Act, passed as Bill C-15 on March 26, 2026, deems the line-location approval granted, consolidates review into one Impact Assessment Act process, gives Alto a right of first refusal on land and amends the federal Expropriation Act. In the report’s view, these measures may cut legal, permitting and schedule risks without eliminating them, and court challenges remain possible.

If the laws fall short, costs could rise well beyond the published range. The budget office set its range to capture the true cost five times out of six. A bootstrap test in the report’s appendix puts the upper bound for a 16% tail at $115 billion and gives a one-in-40 chance that the total reaches $243 billion or more.

Modest stimulus from Ottawa–Montreal construction

Only the Ottawa–Montreal segment falls inside the budget office’s 2029–2033 assessment window. Building it would raise real GDP by about $1.8 billion, or 0.07%, in 2029 and by $2.0 billion in 2033, measured in chained 2017 dollars, while employment gains would grow from about 4,300 to 9,000 people. Each figure is a yearly level effect, not a running total. The estimates leave out how the spending is financed and any productivity gains once trains run, and the effect would be smaller if the project displaced other construction in an economy near full capacity.

Employment gains build fastest in the first two years, while the GDP effect stays close to C$2 billion a year. Figures are yearly level effects against the budget office’s June 2026 baseline and should not be summed. The window covers the first five years of a seven-year construction period. Source: Parliamentary Budget Office, Table 4.

Alto expects construction of the Ottawa–Montreal segment to begin in 2029–2030 and each construction phase to take seven to 10 years. It describes the $60 billion to $90 billion range as working assumptions for planning purposes that should not be read as a project budget.

Earlier cost estimates for the corridor

Past studies of high-speed rail in the Toronto–Quebec City corridor produced figures from $14 billion to $80 billion in 2024 dollars, but they priced different projects. A 1995 federal-provincial study put a Windsor–Quebec line at $21 billion, a 2011 update at $37 billion, and a 2021 estimate covering only Toronto–Montreal at $14 billion. Estimates the report dates to 2026 ranged from $61 billion to $80 billion. The report adds that if the rise in the fixed capital formation deflator seen from 2010 to 2025 continues and the government’s range, in 2024 dollars, is spent evenly from 2029 to 2045, nominal outlays would reach $93 billion to $124 billion from those price increases alone.