The government says its high-speed rail project will cost between $60 and $90 billion. However, today’s PBO report estimates the project “could cost between approximately $75 billion and $113 billion to construct.”
Even the PBO’s projections could be optimistic. The PBO’s estimate assumes “cost efficiency comparable to that typically observed in Europe.” However, high-speed rail projects in the U.K. and U.S. have cost about 4.5 times as much as European projects, according to the PBO.
While the PBO report doesn’t include the cost of an extra stop, the CTF previously estimated that adding another stop in Kingston would cost an extra $3.9 billion.
The PBO said that, “we judge that the risk is more likely that the project will go over budget rather than under.” The average global rail project experiences a cost overrun of 39 per cent, according to estimates from mega-project scholar Bent Flyvbjerg.
The government is borrowing $65 billion this year, according to the Spring Economic Update. Debt interest charges will cost taxpayers $58.7 billion this year. That’s more than the federal government will send to the provinces in health transfers ($57.4 billion) or collect through the GST ($53.4 billion).
“The government hasn’t broken ground and this train is already expected to cost billions more,” said Noah Jarvis, CTF Ontario Director. “Taxpayers are already paying more than $1 billion every week just to cover interest on the federal debt and we can’t afford the government borrowing billions more to pay for politicians’ pet projects.
“Carney needs to scrap this high-speed rail project that shows all the signs of a taxpayer boondoggle.”
The PBO said it will be releasing a future report on whether projected ridership will be able to support the train’s operations. However, the PBO did write that “many, if not most, [high-speed rail] systems around the world do not achieve operational profitability.”
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For more information or to schedule interviews, please contact:
Franco Terrazzano
CTF Federal Director
Phone: 403.918.3532
Email: fterrazzano@taxpayer.com
Noah Jarvis
CTF Ontario Director
Phone: 647.523.1450
Email: njarvis@taxpayer.com
