Air Canada involvement in High Frequency Rail project generates concern

OTTAWA, Ontario — Air Canada has joined one of the consortia bidding for Canada’s High Frequency Rail project, raising concerns about conflict of interest and transparency in the bidding process.

The Canadian airline and SNCF Voyageurs, the operating arm of the French national railways, were both late additions to the Cadence consortium, Global News reports, according to paperwork filed at the July 24 bid deadline. Cadence was one of three consortia selected last year to participate in the Request For Proposals for the high-frequency rail project, which seeks to build a passenger-only route between Toronto and Quebec City. At that time, Cadence included CDPQ Infra, the infrastructure arm of Quebec’s public pension fund; AtkinsRéalis (formerly SNC-Lavalin); Systra Canada, and Keolis Canada.

The winning consortia will receive a long-term contract to operate the Windsor-Quebec City corridor as well as build the new passenger-only line. The slow-moving but massive project has been projected to cost at least C$6 billion, although that figure is several years out of date and the Canadian government has declined to offer an updated estimate. A winning group could be chosen sometime this year [see “Canada’s High Frequency Rail project begins Request for Proposal phase,” Trains News Wire, Oct. 14, 2023].

Air Canada has confirmed involvement but declined to offer any details. The company’s chief legal officer, Mark Galardo, dispatched a question on the topic during the company’s quarterly earnings call on Wednesday, saying, “At this point in time of the process, we’re unable to comment in any way, shape or form. It’s a very strict and rigorous bidding process that is being led by the federal government.” Chief Financial Officer John DiBert did say that the airline’s involvement involves “no significant commitment of capital or CapEx to envision at this time.”

Air Canada’s involvement is being viewed with suspicion because of the company’s history of antipathy toward passenger rail, according to rail supporters.

“The fact is that they have a well-known history to objecting to anything passenger-rail related,” Paul Langan, an author, historian, and long-time Canadian high speed rail advocate, told Global News. “I think they’re in it to try and control it. They’ll get all this VIA [Rail Canada] traffic and passenger data. Certainly, a faster and more efficient rail speed would hurt them.”

Passenger advocacy group Transport Action Canada, in a Wednesday press release, said it had asked the Canadian government what steps had been taken to address several areas of concern regarding competition, conflict of interest, and transparency of the bidding process, among them:

— That the government may have given Air Canada access to High Frequency Rail information that provides competitive advantages over other airlines and VIA Rail Canada;

— That allowing one of the three consortia to reveal major changes in its makeup only when it was too late for the others to respond was unfair;

— That requests for information about High Frequency Rail have been turned down or heavily redacted over the last decade on the grounds that the material was commercially sensitive. Air Canada’s entry into the process means either those redactions were spurious, or sensitive information has now been given to a competitor.

“The response we received only partially addressed our concerns about future competition and didn’t address our concerns about lack of transparency nor about access to competitive information,” the group said. “Air Canada and Cadence were unable to offer further clarification, citing procurement rules.”

Saying it can no longer be confident that the process for selecting the company to help build and operate High Frequency Rail is transparent and fair, the organization has called on the government to release “the maximum amount of information possible for public scrutiny.” It also called on accelerating the process of building the high-frequency line, and for keeping its operation in the hands of VIA, “not another country’s railway, let alone an airline.”