Building the case for passenger rail investment

Canada is currently in a new ‘rail renaissance’ with significant investments being considered coast to coast. These investments are an opportunity not only to transform how people move within cities and regions, but to also shape how regional economies develop. 

Across Canada, investment in passenger rail is at historic levels. For example, improved electrified rail projects are under development in the Greater Toronto and Hamilton Area, and in Greater Montreal. Additional studies are also underway to explore the benefits of more reliable interregional passenger rail services that operate at higher speeds and frequencies. 

With rail being considered as a potential transformative investment in many jurisdictions, there is an opportunity to revisit the benefits that improved rail can offer to further develop the case for rail improvements or new rail systems. 

In the past, the case for rail was centered on how the investment would improve travel conditions and, therefore, benefit existing travelers or grow ridership. In recent years, this methodology has expanded to account explicitly for benefits to society of individuals using the rail investment, such as reduced emissions or automobile accidents resulting in death or injury. 

While this approach allows for a better understanding of how a new investment reduces or increases the impacts of transportation, it does not include wider benefits of improved transit services to economic and social development. In many ways, these evaluations often reflect ‘transportation improvements for transportation’s sake’, which may not present the full, compelling case for transit investment. 

An effective rail investment can trigger wider economic benefits, such as increased productivity, by improving connections between industry or innovation centers. 
This may lead to new jobs, accelerated or expanded urban development, and overall increased economic activity. The same investment can also create social benefits, such as improved access to education or a range of public services, which promotes equity across cities or regions. Directly considering these concerns when making the case for a new investment can help decision-makers and stakeholders understand the true benefit of a new rail investment. 

Steer Davies Gleave has applied a ‘passenger market-led approach’ to the design and evaluation of rail projects, including high- speed rail lines, to ensure that the benefits of transportation are considered at all stages of a project. Passenger markets refer to demand for travel by trip purpose, such as commuting or recreation, between different areas of a city or a region. A market-led approach: 

• investigates how travel between different markets can promote economic and social development, and the costs to society (such as emissions or investment in services or infrastructure) of providing this travel;
• explores how people travel today, and how travel markets may change in the future, based on changes in regional economies or demographics;
• determines the value of improving or creating new travel opportunities within travel markets;
• identifies potential solutions that  realize the value of improved travel and their cost to deliver; and
• communicates the benefits to travelers (new ridership, changes in travel time/reliability/frequency), reduction in transportation impacts (lower emissions or injuries/deaths), and wider benefits to society (improved economic activity, urban development, and social equity). 

Our market-led approach expands the focus of evaluation from the transportation service/infrastructure to the rationale for pursuing a new project: the benefits to society of improved transit. This approach can lead to higher potential options during project planning/evaluation, and to more robust and compelling cases for investing in them.