15. High Frequency Rail

Location: Ontario, Quebec, National

Issue: High Frequency Rail – General (during RFQ process)

Date: March 7, 2023

Suggested Responses

• High Frequency Rail is expected to be the largest transportation infrastructure project in Canada in generations, bringing faster, greener, more frequent and reliable service to travellers.
• On February 17^th, the Government of Canada launched the next major step in the procurement process for High Frequency Rail, a Request for Qualifications, with the goal of identifying a shortlist of qualified respondents to advance this project.
• This will be followed by a Request for Proposals, which will aim to competitively select the best consortium to work with VIA HFR, VIA Rail’s new subsidiary, to design and develop the project.
• Throughout the procurement and co-development process, the private sector will be encouraged to present innovations to meet or exceed project outcomes, including those that would allow for a responsible consideration of high speed segments where there will be the greatest impact and benefit to Canadians. 

If pressed on High Speed Rail

• Throughout the procurement and co-development process, private sector respondents will be encouraged to analyze the possibility of developing segments of high speed rail in the Québec City to Toronto Corridor.
• This will allow the Government to assess the potential benefits and costs of integrating segments of high speed rail.

If pressed to provide a specific project cost estimate

• At this time, it is too early to establish a specific cost for High Frequency Rail in this corridor. Solutions presented throughout the procurement process will help inform cost estimates, which will be further refined throughout the co-development phase once a private developer partner has been successfully identified.

If pressed on impact on VIA Rail employees

• The Government will ensure VIA Rail employees are protected by establishing mandatory requirements for the private developer partner.  
• Through their proposal, the private developer partner must demonstrate that they will respect VIA Rail employees, their collective agreements and benefits, and commit to a collaborative approach with their unions. Any proposal that does not meet these criteria will not be considered by the Government of Canada.

Background Information

• In March 2022, the Government of Canada launched the procurement process for the High Frequency Rail project with a Request for Expressions of Interest.  
• There was a high level of interest in the Project from both domestic and international parties, with formal responses from a total of 54 interested parties. Responses confirmed support for the overall approach, sought clarifications on some elements of the project, and suggested ways to enhance the design of the procurement process. 
• Based on market feedback, the Government made some changes to the procurement timelines, including launching the Request for Qualifications on February 17, 2023, and shortening the Request for Proposal period.  
• The purpose of the Request for Qualifications is to identify and qualify up to three top respondents.  These top respondents will then be invited to participate in the Request for Proposals process, which will eventually lead to the selection of the private developer partner.  This private developer partner would work collaboratively with VIA HFR to co-develop and optimize the High Frequency Rail project.      
• On February 21, 2023 during a briefing to parliamentarians on the High Frequency Rail project, an MP asked a question regarding ridership and revenue forecasting studies which could not be answered during the briefing due to lack of time.  The MP submitted the question in writing.  For reference, the response can be found below:  
  • The ridership and revenue forecasting studies are commercially confidential and cannot be publicly released. These studies are intended to be shared with the Request for Proposals (RFP) Proponents during the RFP Phase and will help the RFP proponents further develop their own ridership and revenue forecasts for the project as part of their bids to become the Government’s Private Developer Partner during the project’s Co-development phase. As a result, releasing the ridership and revenue forecasts to the public could impact the integrity of the HFR procurement process. However, while the specific ridership studies will not be available, the business case supporting the HFR project will be made publicly available and within that report will be a high-level summary of the ridership and revenue forecasting. The release of the RFP is planned for August-September 2023. The business case supporting the HFR project will be made publicly available late Summer 2023.

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QUESTIONS AND ANSWERS (Used in the context of the RFQ launch for Media Lines)

Q1. What is the purpose of the High Frequency Rail Request for Qualifications?

A1. The purpose of the Request for Qualifications is to identify and qualify up to three top respondents. These top respondents will then be invited to participate in the Request for Proposals process, which will eventually lead to the selection of the private developer partner. This private developer partner will work collaboratively with VIA HFR to design and develop the High Frequency Rail project.

The Request for Qualifications provides an updated overview of the High Frequency Rail project, and describes:

• The procurement process including the evaluation criteria, security requirements, proposal development funding support, and key principles of the deal structure;
• The roles and responsibilities of the private developer partner; and
• The project outcomes that the private developer partner will have to meet or exceed.

Q2. What are the next steps following the Request for Qualifications?

A2. Now that the Request for Qualifications has been released, next steps include:

Activity	Timeframe (estimated)
Information session on Request for Qualifications	March 21, 2023
Deadline for response to Request for Qualifications	April 24, 2023
Government of Canada evaluation of Request for Qualifications and identification of Qualified Respondents	April-July 2023
Government of Canada issues Request for Proposals	August-September 2023
Deadline for response to Request for Proposals	June 2024

Q3. What did market participants have to say about the project during the Request for Expressions of Interest?

A3. There was a high level of interest in the project from both domestic and international parties, with formal responses from a total of 54 parties. Responses confirmed support for the overall approach, sought clarifications on some elements of the project, such as roles and responsibilities, and suggested ways to enhance the design of the procurement process. The results of this process were included in the Request for Expressions of Interest (RFEOI) Update issued on October 31, 2022.

Q4. What is envisioned for the Request for Proposals evaluation criteria for selecting a private developer partner?

A4. A private developer partner will be chosen based on their demonstrated capacity to deliver the High Frequency Rail project with the best benefits for Canadians. They will be asked to present their analysis for a technically and commercially feasible solution, along with a business plan and management plan for the co-development, construction, and operations phases of the project.

The Government of Canada will also be looking for:

• how the solutions meet or exceed the project outcomes;
• understanding of the project and its associated risks;
• Indigenous participation plans;
• partnership and collaborative strategies for Indigenous Peoples; and
• readiness and capacity to proceed.

This strategy will drive respondents towards the maximization of project outcomes, while considering the cost-benefit trade-offs of alternatives for meeting or exceeding project outcomes.

Q5. What will be the role of the private developer partner?

A5. The private developer partner will be engaged in the early stages of the High Frequency Rail project development process to work collaboratively with VIA HFR, who is responsible for advancing the High Frequency Rail project and delivering positive results for Canadians.  

Subject to further Government of Canada decisions, it is expected that the private developer partner would enter into a contract with VIA HFR to design, construct, partially finance, operate and maintain High Frequency Rail through a long-term contract.  

Q6. Will there be Canadian content requirements? Why is the Government of Canada looking internationally for a private developer partner instead of just looking for a Canadian company, which would create Canadian jobs?

A6. The Government of Canada is committed to modernizing intercity passenger rail services in a way that will best meet the transportation needs of travellers for years to come, while also creating jobs and economic growth.

High Frequency Rail is one of the biggest rail projects in the world. It is the largest transportation infrastructure project that Canada has seen in half a century, and the first new inter-city passenger rail system in Canada in a very long time.

Recognizing the project’s scale and complexity, the Government of Canada is seeking world-class knowledge and expertise for all aspects of the project, particularly from those companies that have successfully delivered complex infrastructure projects in Canada, North America and around the world. Throughout this process, it will respect its obligations under international trade agreements.

Delivering the High Frequency Rail project will require substantial Canadian expertise, Canadian labour, and Canadian companies throughout all phases of the project, including construction and operations. 

In addition, the Government of Canada will be encouraging the private developer partner to maximize economic benefits to Canadians and Canadian suppliers while respecting Canada’s rules-based approach to international trade. 

Q7. Is the launch of the Request for Qualifications a definite signal that the High Frequency Rail project is going forward?

A7. The Request for Qualifications is an important next step in the formal procurement process for the High Frequency Rail project.

As with any large-scale infrastructure project, the Government of Canada is advancing a staged, decision-making approach to leverage input collected throughout the procurement process and to inform the next steps and decisions to advance the High Frequency Rail project.

For example, the Request for Qualifications will result in a short list of potential private developer partners who will then be invited to participate in a Request for Proposals process. At the end of the Request for Proposals process, a private developer partner will be selected to work with VIA HFR to co-develop and optimize the High Frequency Rail project.

Some future phases of the project are subject to further Government of Canada decisions, including a decision on the Impact Assessment. These are required before establishing a binding agreement between Canada and the private developer partner to fully implement the project.

Q8. Is the Government of Canada privatizing VIA Rail?

A8. No. High Frequency Rail will dramatically expand and improve passenger rail service in Canada. VIA Rail and its employees will play a critical role in this expansion of passenger rail service, working with a private developer partner.

Under this collaborative model, VIA HFR has been established to act as a strong public sector counterparty to a private developer partner. It will enter into a contract with a private developer partner for the design, construction, operation and maintenance of passenger rail service in the Québec City to Toronto Corridor. And that contract will include the role of VIA Rail and its employees.

The Government of Canada is bringing in the private sector to help deliver the best project for Canadians by leveraging its innovation and by transferring revenue risks. This will benefit Canadian taxpayers by mitigating ongoing financial costs of delivering this expanded rail service.

The Government of Canada will ensure that VIA Rail workers are protected. The Government of Canada will retain ownership of VIA Rail, its assets, and VIA HFR. As part of this process, the Government of Canada will require any private developer partner to respect VIA Rail employees, their collective agreements and benefits, and to demonstrate how they will work with VIA Rail employees and unions. These criteria will be mandatory and any proposal that does not meet them will be deemed unacceptable by the Government of Canada.

Throughout the High Frequency Rail project, federal legislation, notably the Canada Labour Code, compels the private developer partner to continue to employ unionized employees on the terms and conditions of applicable collective agreements at the term of the transfer and ensures the basic premise of continuity in the conditions of employment of non-unionized employees that would become employed as part of the High Frequency Rail project.

Furthermore, in addition to the statutory obligations under the Canada Labour Code, contractual obligations to ensure such continuity could also be imposed on the employer in the contract, including an obligation to employ any employees whose employment would not be automatically transferred by operation of law.  As a federally regulated employer, other notable federal legislation pertaining to workers would include the Accessibility Act and Employment Equity Act.

The Government of Canada will ensure that the public interest is maintained, for example, through a fare policy and minimum service requirements for local communities.

More details on the transition of operations to the private sector will become available over time and at key decision milestones, such as following the Request for Proposals and the co-development phase.

Q9. How can Indigenous Peoples and all Canadians provide feedback on the project?

A9. The Government of Canada is committed to an ongoing dialogue with Canadians and building nation-to-nation, government-to-government relationships with Indigenous Peoples. Input and feedback from Indigenous Peoples throughout the life of the project will be essential to developing an effective project that creates mutually beneficial socio-economic development and project participation opportunities.

The Government of Canada has been proactively reaching out to engage more than 40 First Nations, Innu and Métis communities, groups and other entities. Initial outreach includes providing an introduction to the High Frequency Rail project; inquiring about how parties would like to be engaged going forward; and providing Indigenous Peoples an opportunity to express initial views and feedback on the project.

Indigenous Peoples and all Canadians who may have input, questions or concerns about the project, can also provide their feedback through the High Frequency Rail project website.

Indigenous Peoples and the public will also have the opportunity to contribute to the project over the coming years through the Impact Assessment. Information on this engagement process will be forthcoming.

Q10. How will the Government of Canada work with Indigenous communities to ensure economic opportunities?

A10. The Government of Canada is committed to advancing Rights and Reconciliation for Indigenous Peoples in its development of the High Frequency Rail project.

This approach is grounded in the principles of engaging early and meaningfully in accordance with the principles of the United Nations Declaration on the Rights of Indigenous Peoples, fulfilling the Crown’s duty to consult and accommodate, and advancing priorities on reconciliation (including identifying opportunities for the participation of Indigenous Peoples in the High Frequency Rail project).

In this context, the Government of Canada looks forward to working with Indigenous Peoples on a range of matters, such as supporting opportunities for Indigenous-led businesses. To foster meaningful two-way dialogue, the VIA HFR team is engaging each individual Indigenous group and community to co-develop early engagement plans.

The Government of Canada places great value on selecting a private developer partner who prioritizes and values meaningful relationships with Indigenous Peoples. In this context, during the Request for Proposals stage, the Government of Canada is planning to evaluate the Indigenous participation plans of proponents to encourage collaboration opportunities with Indigenous Peoples, businesses, communities, and organizations.

Q11. How will the Government of Canada ensure respondents develop concrete plans to support socio-economic benefits and project participation opportunities?

A11. At the Request for Proposals stage, the Government of Canada will require respondents to detail in their proposals how they, as the private developer partner, would facilitate opportunities for Indigenous participation in the project, including: opportunities for the exploration and creation of socio-economic benefits; contracting with Indigenous businesses, communities, entities, and Peoples throughout the project phases, including services for the construction and operation of the project; inviting Indigenous Peoples to share Indigenous knowledge to inform the project; and ensuring opportunities for Indigenous Peoples to participate in the impact assessment process to better understand the potential impacts of the Project on Indigenous traditional territories.

Q12. Is this project ever going to be built? When will High Frequency Rail be operational?

A12. The Government of Canada is committed to transforming intercity passenger rail to meet the needs of travellers. This commitment is evidenced by the major milestones the project has achieved this past year, and the momentum we are building with the launch of the formal stage of the procurement process.

Key milestones include:

• In March 2022, the Government of Canada launched the procurement process with the Request for Expressions of Interest.
• In November 2022, a wholly owned subsidiary of VIA Rail (VIA HFR) was established to be a dedicated project office that will work collaboratively with the private developer partner to design, develop and optimize High Frequency Rail.
• Now, in February 2023, the Government of Canada has released the Request for Qualifications, which brings the project one step closer to finding a private developer partner.

Following the Request for Qualifications, the next key steps will include launching the Request for Proposals process in August-September 2023, and then selecting a private developer partner.

Q13. Large infrastructure projects like these are notoriously hard to keep on budget. What measures has the Government of Canada put in place to ensure costs are properly managed over the course of the project?

A13. A modern and efficient transportation system leads to shorter travel times, less air pollution, more time with family and friends, and stronger economic growth.

The Government of Canada is implementing a robust, cost-management strategy for High Frequency Rail to ensure it transforms the way that Canadians move, work and live in a financially prudent manner. As part of this cost-management strategy, the private developer partner will be incentivized to innovate and reduce costs to create better value for money, while protecting the public interest. It also includes annual cost updates from the private developer partner, recurring due diligence, open-book reporting to manage costs and scope changes, as well as specific measures at every phase of the project.

Q14. How will the work in Southwestern Ontario (SWO) be incorporated into the project to support the Minister’s mandate letter commitment?

A14. The Government of Canada has contracted external advisors with expertise in railway planning, engineering, and operations to analyze options that will support the commitment to improved passenger rail service in Southwestern Ontario. The results of this work are expected at the end of 2023. After that, the Government of Canada will be able to further explore the feasibility of integrating Southwestern Ontario into the High Frequency Rail project; this is expected to include collaboration with VIA HFR and the private developer partner during the co-development phase.

Q15. Why not high-speed rail?

A15. The Government of Canada is committed to shortening journey times and achieving higher speeds in the corridor. Our recent investments are only the beginning of the Government of Canada’s efforts to reinvigorate passenger rail in Canada.

There are many systems around the world that integrate both high speed and high frequency.   

Through a progressive public-private partnership, the Government of Canada will work with the private developer partner to assess sections of the High Frequency Rail service for potential high-speed rail, where it provides value for the additional investment.

There will be ongoing assessments as to how the service can be improved over the course of the project. This responsible approach will ensure Canadians get good value for money. 

If pressed

High-speed rail can bring great benefits in terms of journey time and travel speed.

However, building an end-to-end high-speed rail system is complex, costly, and time consuming.    

For example, a full, high-speed rail system between Québec City and Toronto would require a fully enclosed (fenced) corridor, a straighter alignment with full, double tracking, as well as complete grade separation (the use of viaducts and tunnels) on an alignment that currently has over 1,000 public and private crossings.

A full, high-speed rail service would also be more disruptive to communities and to the ecosystem than the High Frequency Rail project, and lack some of the benefits of connecting regional centres to the new service.

That is why the Government of Canada has established a procurement and co-development approach that allows for a responsible consideration of high-speed segments in the corridor. This will allow a prudent assessment of the benefits and costs of high-speed rail on each segment to determine where high-speed rail could make financial and operational sense, with the goal of integrating such segments into the High Frequency Rail project where possible.

Q16. Will High Frequency Rail serve Dorval Station?

A16. Yes, High Frequency Rail is expected to serve Dorval Station.

The private developer partner and VIA HFR are expected to develop a project that improves integration with other modes of transportation where possible, including regional and local public transit, VIA Rail’s non-corridor services, and airports.

For example, High Frequency Rail is expected to provide targeted connections to certain locations, like Dorval station near the Montréal-Trudeau Airport, as well as Jean Lesage International Airport near Québec City.

Q17. What does High Frequency Rail mean for existing VIA services between Québec City to Toronto?

A17.  VIA Rail’s existing passenger rail services in the Québec City to Toronto corridor will continue operating during the development of High Frequency Rail. Eventually, these services are expected to be integrated with High Frequency Rail services into a single network, and the private developer partner will be required to maintain connectivity to these existing communities in this corridor.

The implementation of High Frequency Rail offers the opportunity to optimize services on these routes to better address local needs, such as more tailored service schedules. This work will be further explored during the co-development phase of the project.

Q18. How will High Frequency Rail avoid the challenges experienced in the Ottawa Light Rail Transit (LRT) project?

A18. Over the past several years, the High Frequency Rail project has been the subject of significant research and analysis to determine the best approach to procure and develop High Frequency Rail. 

This analysis has been informed by the emerging best practices around the world in successfully developing complex transportation infrastructure projects.

We have undertaken extensive analysis of the lessons learned from other projects that have run into problems, to be guided by the lessons from their mistakes. We have studied the Ottawa LRT extensively for this purpose, including taking careful note of the findings and recommendations from the Public Inquiry.

There are four key areas where the Government of Canada is taking a different approach for the High Frequency Rail project than the City of Ottawa took with its LRT project, in order to avoid the risks and problems so evidently encountered by the City on its project:

1. The Ottawa LRT separates the responsibility for maintenance, that is performed by the private developer partner, and operations, that is performed by OC Transpo. In contrast, with High Frequency Rail, the private developer partner will be responsible for both construction and operations. This will align incentives since any issues resulting from construction during operations would remain the responsibility of the private developer partner, which greatly mitigates the risks associated with integrating new operating procedures, infrastructure, equipment, technology and maintenance protocols in a single service network.
2. High Frequency Rail’s innovative procurement model incorporates a rigorous co-development phase. During this phase, the public sector and private developer partner will work together to develop the project. This will help all parties understand project risks and work with aligned incentive to set common expectations about how they will be mitigated.
3. The Ottawa LRT suffered from changing and insufficient standards for testing, commissioning, and acceptance of the completed project, with best practices for project launches not being followed. The private developer partner’s responsibility for the operation of the system will create an incentive to avoid premature commissioning, and the clear oversight by VIA HFR and Transport Canada will further mitigate this risk for High Frequency Rail. These parameters will be publicly communicated.
4. The Government of Canada just established VIA HFR as a wholly owned subsidiary of VIA Rail to manage the development of all aspects of High Frequency Rail. VIA HFR already has three very highly qualified and experienced founding board members, and is in the process of recruiting world-class experts in large passenger rail project development. VIA HFR will operate with a very high degree of transparency as it advances High Frequency Rail. This is all in sharp contrast to the Ottawa LRT project, which tried to operate by running the project with municipal employees and weak transparency.