Ottawa Ontario - The Canada Infrastructure Bank will consider financing up to half of a $1 billion project to create a passenger train service between the Calgary airport and Banff, with a start date as early as 2025.
 
The ambitious rail plan is being driven by the Alberta government, and the private booster of the project, Liricon Capital, has progressed from an assessment that began last year to the project accelerator stage, where there's a high likelihood of a bank investment, said John Casola, chief investment officer for the bank.
 
There's no firm commitment yet, but the project, which would twin existing rail tracks, "has legs," Mr. Casola said in a recent interview.
 
The potential ridership and the level of support from the province contribute to the project being a viable one for the bank, he said.
 
"When you look at all of those factors, this looks good," Mr. Casola said.
 
He said the federal Crown corporation would consider investing up to 50 percent, depending on what is needed.
 
The project would require both public and private funding, and the twinning of one of the busiest stretches of Canadian Pacific Railway Ltd. track through downtown Calgary and the Morley reserve of the Stoney Nakoda Nation.
 
The project is being envisioned as a means for reducing vehicle trips to Banff, and reducing per-person transportation greenhouse gases, connecting the communities along the route, while also boosting tourism.
 
Crucially, it would add Calgary to the list of Canadian cities with direct rail for passengers between the airport and downtown.
 
However, some environmentalists have raised concerns about how increased rail movement in the mountains could affect wildlife.
 
Next steps for the project include more detailed engineering studies on the route, ridership, safety, and indigenous and community consultations, paid for by the bank, the Alberta government, and Liricon, Mr. Casola said.
 
In an Alberta government news release set to come out this week and obtained by The Globe and Mail, Premier Jason Kenney praised the project, saying it "has the potential to be the first airport-to-mountain community transit solution of its kind in North America, making Alberta an even more compelling destination for global visitors year-round."
 
The railway giant, Canadian Pacific, has also expressed new openness to exploring the idea, according to the government's news release.
 
The key private booster of the project, Liricon, the holding company that controls the Mount Norquay Ski Resort, and holds a long-term lease on the Banff train station, has inked a memorandum of understanding with CP.
 
"Any proposal to co-locate a passenger rail service on CP property must preserve our capacity to move freight, both at current levels and those required to support future growth," Lesli Tomlin, director of communications for CP, said in an e-mail.
 
"Alberta's economy depends on a freight rail transportation system that can safely and efficiently move goods and commodities, especially through this critical trade corridor."
 
Invest Alberta Corp., on behalf of Alberta Transportation, is aiming to have a development agreement in place by the end of 2021, according to the news release.
 
"On this basis construction could commence by the end of 2022 with the service in operation by 2025."
 
The infrastructure bank doesn't offer grants but provides low-interest debt or equity investments in Canadian infrastructure projects.
 
Its structure is meant to help attract private financing to reduce costs to governments.
 
In April, the Parliamentary Budget Officer warned the bank is unlikely to spend even half its $35 billion budget over its 11 year mandate, despite government pledges to get the cash flowing to new green projects.
 
Some opposition MPs have also questioned whether it has lived up to a mandate of bringing private-sector investment to projects.
 
After criticism of the bank's initial lack of progress, Ottawa approved leadership changes in 2020, and a new "growth plan" to spend at least $10 billion over three years.
 
When asked about other proposed rail projects in Alberta, between Edmonton and Calgary, Mr. Casola said he wouldn't comment on any specific plans.
 
"I don't want to leave you with the impression that Alberta has a quota of one rail deal," he added.
 
"But the economics have to make sense, and it has to be something that the province is serious about."
 
The Calgary-Banff rail project fits into the political ambitions of both the Trudeau and Kenney governments, to push economic development projects that could diversify Alberta's economy, and to create more green-oriented public transit projects.
 
Provincial backers hope the train could someday run on zero-emission hydrogen fuel.
 
Liricon owners and Banff residents Jan and Adam Waterous originally pitched the train idea to the bank and the Alberta government as part of what they say is their broader push to make the Rocky Mountain town more public transit oriented.
 
"It's really about pedestrianizing the park," Ms. Waterous said.
 
"It's about the bigger picture for Banff."
 
For decades, people took the train to Banff.
 
Train ridership eventually declined, and passenger service between Calgary and Banff stopped in 1990 after Ottawa cut funding to Via Rail, which in turn reduced passenger rail routes across the country.
 
As described by the Alberta government, the new Calgary-Banff rail project would involve about 150 kilometres of track with seven stops along a dedicated line built within the existing CP corridor.
 
The Alberta government says the service could have up to 10 departures per day from the airport to Banff, and the capability of running an express service from Calgary airport to downtown Calgary every 15 minutes.
 
Kelly Cryderman.