Canada's proposed high-speed rail programme could cost as much as $113 billion, roughly 25% more than the federal government has estimated, according to a new warning from the Parliamentary Budget Officer (PBO).

The figure lands as Ottawa moves ahead with one of the largest infrastructure commitments in the country's history, a rail corridor intended to link Quebec City and Toronto through Montreal, Ottawa and other population centres in the Quebec City–Windsor corridor.

The PBO's assessment puts the independent budget watchdog at odds with the government's own costing. A 25% overshoot on a project of this scale translates into more than $20 billion in additional spending exposure for federal taxpayers, before any cost inflation from land acquisition, tunnelling or electrification works that typically accrue during delivery.

The warning follows the government's selection in February 2025 of Cadence, a consortium including CDPQ Infra, AtkinsRéalis, Keolis, SYSTRA, SNCF Voyageurs and Air Canada, to co-develop the ~1,000 km line. The consortium's mandate covers design, financing, construction, operation and maintenance under a public-private structure that ministers have presented as a way to transfer delivery risk to the private sector.

That risk-sharing claim now faces scrutiny. Cost escalation of the magnitude the PBO identifies would test the allocation of overruns between the federal partner and the Cadence consortium, and could force revisions to the phased implementation plan the government has sketched for the corridor.

The budget officer's estimate also raises questions about the business case. Proponents of the project, branded VIA HSR or "Alto" in federal communications, argue that high-speed service at speeds up to 300 km/h would capture a substantial share of trips currently made by car and air in Canada's busiest travel corridor, home to roughly half the country's population. Higher capital costs lengthen the payback horizon and increase the operating subsidy the line may require in its early years.

For comparison, the government's earlier official estimate placed the programme at approximately $80–90 billion over its full build-out, a range ministers acknowledged was preliminary. The PBO's $113 billion figure suggests the true cost profile sits above even the upper bound of that range, echoing patterns seen in high-speed rail programmes abroad, where final outturn costs have routinely exceeded initial estimates.

Finance officials will now face pressure to reconcile the competing numbers before the next federal budget cycle. The PBO's role is to provide independent analysis to parliamentarians, and its cost projections have previously shaped debate on major files including defence procurement and pharmacare.

No construction start date has been fixed. The government has said design and development work with the Cadence consortium will precede any final investment decision, meaning the $113 billion warning arrives early enough to influence the structure of the deal rather than merely to score it after the fact.

How Ottawa responds — through renegotiated risk allocation, revised phasing, or an updated public cost estimate — will determine whether the PBO's figure becomes a negotiating benchmark or a line item in a final bill taxpayers discover a decade from now.