A railway boom for Ontario and Quebec is long overdue

AACI | Vice President, The Regional Group of Companies Inc.
  • Dec. 9, 2016

Shortly after the Liberal win in the last federal election, I wrote about how today’s infrastructure builds become tomorrow’s real estate investments. It’s what happens after the construction workers go home that truly matters.

John ClarkI’ve also touched many times on the plight of towns and small cities across Canada, where local manufacturing industries have shifted offshore, employment prospects are dim and young people have decided to try their fortunes elsewhere.

Here in Ottawa, you don’t have to look far to find examples of this. Just down the road in Smiths Falls, the local economy has been depressed for years. This community of about 9,000 still struggles to recover from the loss of anchor employers, most notably, the closure of the Hershey factory in 2009. (The transition of that facility into a producer of premium medical marijuana hasn’t made up the difference – yet.)

Infrastructure is key to economic revival

The key to reviving the economic engine of a town like Smiths Falls is infrastructure. New infrastructure investment gives an incentive to employers to set up shop and to jobseekers to put down roots. It can also turn that town into a bedroom community attractive to commuters looking to get further away from the congestion and inflated housing prices of a major city.

The right transportation infrastructure is crucial.

Using Ottawa again as an example, we’ve seen the halo effect in action when our region’s major highways extended their four-lane reach. Carleton Place, down Highway 417, and Kemptville, much further down Highway 416, have both been invigorated by an influx of new residents who work in Ottawa.

Highway 31 out the other end of the city, on the other hand, remains a two-lane country hardtop all the way down to the 401. The growth and development of communities along that route is stagnant.

The Trudeau Liberals carried themselves into office on the promise of stimulating Canada’s economy with infrastructure spending. They recently announced the new infrastructure bank as part of that mandate. It’s obvious what kinds of infrastructure investments need to be made to stimulate economic activity both inside and outside our major cities. Without the connective tissue of roads, railways, airports and canals, Canada is just a geographic expression.

A new rail service for Ontario communities

So it was with great interest that I listened recently to a presentation by VIA Rail CEO Yves Desjardins-Siciliano. He is pushing for a new high-frequency rail service between Quebec City, Montreal, Ottawa and Toronto that will also serve smaller cities that have been without direct rail service for years, such as Peterborough and Trois Rivières.

Current VIA passenger service could as much as triple, using a dedicated track to avoid interference with slower freight trains. It would not be a high-speed service in the world-class sense, still using conventional North American equipment with speeds of about 175 KPH, but travel times would still be shortened significantly. And with the increased frequency, same day or next day return trips would be much easier to schedule.

Desjardins-Siciliano mentioned private dollars could be involved, which would be in keeping with the federal infrastructure bank concept. Private sector involvement would likely be key to making this financially viable. Peterborough, for example, did have its own rail connection until 1989, when the cost of its operation became unsupportable – community support would be a key element to move this forward now.

The economic impact of faster and more frequent service could be considerable. Wherever there is good transportation infrastructure, growth happens. This in turn has a positive impact on real estate value and development. Not only would businesses find it easier to operate between different smaller communities, even commuters might find it more desirable to live further outside of Montreal, or Ottawa or Toronto. Also, it could create new inter-city business partnerships with businesses in Ottawa able to partner with businesses in places like Peterborough to the west or Trois Rivières to the east.

It’s time for the stars to align

Desjardins-Siciliano is confident the federal government will soon give its blessing to the idea. I expect it could be included in the 2017 federal budget due in the spring. He predicts the new service could be running as soon as 2020.

This idea isn’t new. It’s been on and off the table several times over the past decade, with money offered at various points from both the federal and Ontario governments. But for one reason or another, the stars just never aligned. I believe it’s time they did, and this time, they can.

If the greenlight does come, savvy real estate investors and developers will no doubt give serious consideration to the new opportunities that will arise in communities large and small along the route.

To discuss this or any other valuation topic in the context of your property, please contact me at [email protected]. I am also interested in your feedback and suggestions for future articles.

John Clark is Vice President with The Regional Group of Companies Inc. He has more than 33 years of experience in the real estate appraisal field, is a fully accredited…

Read more

John Clark is Vice President with The Regional Group of Companies Inc. He has more than 33 years of experience in the real estate appraisal field, is a fully accredited…

Read more

Industry Events