High-speed rail costs could reach $113 billion, 25% more than estimated, PBO warns

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OTTAWA — A new report by Ottawa’s fiscal watchdog warns that the planned high-speed rail project from Toronto to Quebec city could cost as much as 25 per cent more than the Carney government’s highest estimates.

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The Parliamentary Budget Officer (PBO) estimated in a report released Thursday that the project’s costs would run between $75-billion and $113-billion, compared to the government’s estimated range of $60 billion to $90 billion. The upper end of the PBO’s estimated range is 25.6 per cent higher than the government’s.

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“This range reflects the considerable uncertainty inherent in large-scale rail infrastructure projects,” the report said.

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The report raises fresh questions about one of the Liberal government’s signature projects, as Prime Minister Mark Carney tries to balance his desire to bolster Canada’s infrastructure and the country’s growing debt.

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The high-speed rail project would add about 1,000 kilometres of electrified high-speed rail using trains designed to travel up to 300 kilometres per hour. The project was unveiled by former prime minister Justin Trudeau in February 2025, just weeks before he left office. It was referred to Carney’s new Major Projects Office in September 2025. Construction is expected to begin in 2029 and the vast majority of the bill will be paid by the federal government, although there may be private sector involvement.

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But the project’s rising cost estimates may not be finished. PBO Annette Ryan also warned that any major changes to the rail plan, such as diverting the line to run through Kingston, Ont. or adding tunnels or overpasses would add significantly to the project’s cost.

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The PBO’s analysis concluded that about 15 kilometres of tunnel would be needed to connect Laval, Que. and Montreal. And the government announced in June that Kingston is being considered for a potential stop.

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The PBO report, based largely on previous high-speed rail projects in Europe and the United States, notes that the details of the proposed route have not yet been made public, and that much of the route will need to go through costly, rocky Canadian Shield. Dense, urban areas, such as the Montreal area, are also more difficult and costly for a rail project.

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The report also tamps down the economic benefits of constructing the high-speed rail project, saying Canadians should expect only a “modest” near-term economic stimulus. For this part of the analysis, the report focuses on the Ottawa-Montreal leg of the proposed project because it’s expected to be completed first. Each dollar spent on construction would boost gross domestic product, or the size of the economy, by about 80 cents during the first year of construction, growing to about 90 cents by the fifth year.