The construction of a high-speed train (TGV) that could connect Montreal to Toronto in less than two and a half hours would stimulate competition from Canadian companies, says a professor specializing in productivity issues in the country.
“A TGV will promote competition between companies in all sectors, particularly in services,” argued HEC Montréal professor Robert Gagné. As it stands, an entrepreneur can choose not to put any effort into prospecting for clients in Toronto because it’s long and complicated, but with a train that takes them to downtown Toronto in two and a quarter hours, it changes the game,” he continued.
Mr. Gagné made these remarks as part of the competition summit which took place on Thursday, October 5 in Ottawa. As a guest speaker, he spoke on Canada’s untapped competitive potential.
Canada has a competition deficit compared to the countries of the Organization for Economic Co-operation and Development (OECD), he repeated many times during the event. Canada actually ranks at the bottom of the pack according to its product market regulation index. This index assesses the extent to which public policies promote or hinder competition in product markets.
With the TGV, the idea is to bring together the markets of Toronto (6 million inhabitants) and Montreal (4 million) to make a single, huge market of 10 million people within which businesses from both Large cities compete to serve this large pool of consumers.
“Canada is a huge country where population concentrations are rare and isolated from each other, which is nothing to encourage competition,” the academic who directs the Center on Productivity and Prosperity explained to his audience. Walter J. Somers Foundation.
In addition to attracting new clients, companies would also have easier and cheaper access to experts in the two major cities, which would undoubtedly increase their productivity, argues the professor.
Currently, the federal government is leaning towards a high frequency train (TGF) rather than high speed (TGV) project. Cheaper and slower than the TGV, the TGF would connect Montreal and Toronto in four hours instead of the current five hours. According to an update of a study dating from 2020, a Quebec-Windsor TGV would cost 80 billion.
Unlike the TGF, a TGV would compete with the plane in the Montreal-Toronto corridor, the journey time of which is estimated at three and a half hours taking into account traffic jams to get to and from the terminals. If it were powered by electricity, the TGV would also contribute to the reduction of GHGs compared to air travel.
According to Mr. Gagné, the TGF, as proposed by the federal government, will not change anything in the dynamics of interurban transport between the country’s two main cities, unlike the TGV.
“I would go all in [for the TGV], even if it cost 100 billion,” said the professor. What is 100 billion these days? he continued. The Canadian government spent much more than that during COVID. »
Such comments from a professor known for his harsh criticism of the way in which public administrations manage taxpayers’ money do not fail to arouse astonishment.
