Alberta Gets on Board with Passenger Rail

Last week, Premier Danielle Smith and Minister of Transportation and Economic Corridors Devin Dreeshen announced Alberta’s Passenger Rail Master Plan, representing a dramatic shift in how Albertans will move around the Province.

Today, Alberta has no daily regional or intercity train service. Alberta’s plan for rail consists of numerous potential projects, and is meant to move people efficiently both locally, and across the Province.

Where will it take Albertans?

The proposed projects include:

• Commuter rail systems for both Calgary and Edmonton, with the former connecting downtown Calgary to the Calgary airport, and suburbs like Airdrie and Okotoks, and the latter connecting downtown Edmonton to its airport and the suburb of Leduc.
• Regional rail corridors between Calgary, Red Deer, and Edmonton, with the potential for high-speed service, and links from Calgary to nearby provincial and national parks
• Additional regional rail lines connecting Calgary to Lethbridge and Medicine Hat, and Edmonton to Fort McMurray and Grand Prairie.
• The development of transit hubs to link local light rail transit (LRT) systems in Calgary and Edmonton to these new intercity and commuter rail services.

The UCP’s vision for rail isn’t just limited to moving tourists, residents, and businesspeople between cities. Facing rising housing prices as more Canadians and newcomers move to Alberta, Smith envisions rail as a way to help grow the Province’s housing stock.

“I’ve already challenged Red Deer to look at becoming our next million-person City, and so (rail is) a great new way to grow our affordable housing in central Alberta”. – Premier Smith

Alberta is launching the process of identifying private sector consultants to build out the plan, with an RFEOI in April 2024, an RFP in summer 2024, and the first project targeted to begin construction in 2027. The study will focus on the plan as a network, rather than individual projects, highlighting the government’s “sum of the whole” approach.

How Alberta can learn from Ontario as it embarks on a rail revolution

Alberta’s Passenger Rail Master Plan would help to inform which projects would take priority and phasing. It looks at a 15-year horizon, with projects delivered by a new Crown Corporation modelled after Ontario’s regional transit agency Metrolinx, with the potential for private sector involvement.

In fact, during the announcement, Premier Smith revealed that she visited Ontario’s regional transit agency Metrolinx to learn about the GO Transit rail system, and how Alberta could emulate its growth and success.

Based on Ontario’s experience with expanding the GO Transit network through the GO Expansion project, StrategyCorp has outlined three ways that the private sector can get on board with rail in Alberta.

1.     Transit Oriented Communities

Building homes near rail is an effective way to tackle Canada’s housing crisis, and people are willing to pay more to reduce their commute times. A CMHC study found that when GO Transit expanded to East Hamilton and Niagara Region home values jumped between 7% and 8%.

In Ontario, government and developers have taken notice of the associated land value uplift of rail transit, and often partner together to deliver new homes and stations. Some examples of Transit Oriented Communities on the GO network include Spadina-Front GO in the heart of downtown Toronto, Woodbine GO near Pearson Airport, Park Lawn GO in Etobicoke, and the Orbit in the rural community of Innisfil.

Leveraging the private sector through Transit Oriented Communities to build new stations can help Alberta realize ancillary benefits of transit such as housing, while reducing capital costs associated with station construction. In Ontario, expedited planning permissions, reduced parking requirements, and extra density have also often been critical elements of these projects, to help to provide value for the developer proponents.

Alberta may want to look at how Ontario has developed this program to deliver more housing near transit, as well.

2.     Public Private Partnerships

P3s (or PPPs) are the gold standard for delivering transportation and infrastructure projects across Canada. In Ontario, Infrastructure Ontario has shifted most procurement for major transit projects to an “Alliance Model”. This version of PPPs puts a focus on reducing blame, collaborative decision-making, and best-for-project solutions which reduces risk and drives better outcomes for both proponents and government.

Alberta’s ambitious future rail network buildout will likely involve large-scale private sector involvement, from planning to buildout, to potentially operations. Ensuring that progressive and effective PPP models are used from day one is essential.

3.     Hydrogen trains and technology

The Government of Alberta has invested significantly in hydrogen energy and has a long-term plan to grow the sector via its Hydrogen Roadmap strategy. In the freight rail sector, Alberta has invested in Canadian Pacific Kansas City Railway’s hydrogen locomotive program.

While overhead catenary wires are typically the preferred option to decarbonize heavily used rail corridors, serving the edges of Alberta’s future passenger rail network with hydrogen trains is not only good for the environment, but directly aligns with Alberta’s hydrogen push. The potential for a made-in-Alberta solution is a great opportunity for government and industry.

Potential end-to-end private project delivery

Across North America, the public sector is traditionally responsible for transit and transportation, especially passenger rail. This paradigm has been uprooted with Brightline, the first new private passenger rail operator in the United States in almost 100 years. Using a land development plus rail approach, Brightline operates between Orlando and Miami. This model is being repeated with Brightline West, a 320 km/h high-speed rail project which began construction in 2024 to connect Las Vegas to Greater Los Angeles.

The private delivery of rail services, with some government support, could allow Alberta to capitalize on market creativity while reducing their required up-front investment in their future rail network. It is also an opportunity to work with the private sector on delivering homes near rail, directly aligning with Alberta’s home building and road de-congestion goals.

The Big Question: Will Alberta remain on track?

Alberta’s Passenger Rail Master Plan is an ambitious and future-oriented vision for a growing province, intended to transform mobility, build homes, and help grow the economy.

This ambitious plan will be a test of both the private and public sector. Can the private sector replicate the creative and innovative solutions that have gained steam elsewhere in North America?  And can Alberta’s government learn lessons and best practices from other jurisdictions and avoid a similar fate as Ontario—which has been beset by rising construction and labour costs in the midst of North America’s largest transit buildout?

The future is uncertain, but good plans appear to be in place. The hardest part is now approaching—transforming a line on a map to passengers in seats.