CANADA'S RAIL INDUSTRY
- Audrey Calligaro
- Mar 26
- 5 min read
Updated: Mar 31
Worldwide, the demand for sustainable transportation solutions is driving countries to invest in rail infrastructure. Canada stands out with a rail network of over 49,000 km, the 5th largest in the world, and a robust freight sector that quickly recovered from the pandemic, carrying 70% of intercity freight traffic.
The rail sector is indispensable to the Canadian economy. Not only does it support the growth of several strategic industries, such as agriculture, manufacturing and retail, but it also facilitates Canadian companies' access to global markets. By supporting exports, it improves the interconnection of major Canadian and international cities. This role as an economic pillar is also accompanied by a significant contribution to the reduction of greenhouse gas (GHG) emissions, making the rail sector a key player in the transition to a sustainable economy.
We'll cover current trends, key statistics, major market players, challenges and future prospects to help those wishing to explore opportunities in rail-related sectors in Canada make informed decisions.
Key figures
Acteurs clés
Freight transport :
Passenger transport :
Focus on Quebec and Ontario
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The Railway Sector: A Key Gateway for Global Trade
The rail sector is a crucial gateway to global trade. In 2022, Canadian railroads helped export $200 billion worth of goods to international markets:
Trade with the U.S. and Mexico: Thanks to the Canada-U.S.-Mexico (ACEUM) trade agreement, Canadian companies can benefit from increased trade flows via the Class I rail networks linking these three countries.
Exports to global markets: With major ports like Vancouver, companies can leverage rail networks to access markets in Asia and Europe.
Shortline railroads (CFIL) are particularly important for transporting goods from more isolated regions to the main Class I rail lines.
As far as passenger transport is concerned, the proposed high-speed train (TGV) between Quebec City and Toronto could revolutionize passenger mobility by reducing journey times between these two major cities. This initiative will do more than simply improve travel; it will also boost tourism in the region, while promoting economic integration between Quebec and Ontario. By increasing accessibility and improving connectivity between major urban centers, the TGV can also play a crucial role in reducing the transport sector's carbon footprint, by offering a more sustainable alternative to car or air travel.
Regulations and policies
The sector is governed by the Railway Safety Act. Companies must hold a certificate of fitness to operate. The government also imposes reporting obligations on service and fares.
The Transport 2030 plan, which aims to improve the sector's sustainability, safety and efficiency, is a central plank of Canadian strategy, notably through subsidies to encourage technological innovation and the adoption of zero-emission vehicles (ZEVs).
Rail transport companies are facing increasing demands for transparency and environmental sustainability. Stricter processes also govern the safety of rail operations.
Challenges and Opportunities for the Canadian Railway Sector
Major challenges
Canada's rail industry faces a number of challenges that require innovative solutions and strategic investments:
Aging infrastructure : Rail infrastructures require major investment to modernize facilities and meet current needs.
Urban congestion: Growing demand in major cities such as Toronto, Vancouver and Montreal is exacerbating congestion, making it necessary to develop efficient mobility solutions.
Extreme weather conditions: Fires, floods and other climatic events regularly disrupt rail operations, calling for more resilient infrastructures.
Opportunities
Despite these challenges, the sector presents numerous development opportunities, fostering growth and innovation:
Intermodal transport: Growing demand for intermodal solutions (rail, truck, ship) is helping to optimize the supply chain, cut logistics costs and reduce carbon footprints. Intermodal transport (combining rail, truck and ship) is experiencing strong growth, with a 19.2% increase in intermodal shipments in 2024.
Quebec-Toronto high-speed train: This project could revolutionize passenger mobility and boost tourism in the region, opening up new investment opportunities in rail infrastructure and related services. The official announcement of the Alto project, a high-speed train (TGV) linking Quebec City to Toronto, marks a historic turning point for rail transport in Canada. With 1,000 km of electrified track dedicated exclusively to high-speed trains, the project aims to cut journey times in half: Montreal-Toronto in 3 hours and Montreal-Quebec City in 1.5 hours. A Franco-Quebec consortium, Cadence, comprising CDPQ Infra, AtkinsRéalis, Systra Canada, Keolis Canada and SNCF Voyageurs, has been selected to design, build and operate this high-speed line. The aim is to modernize Canadian rail transport and catch up with other G7 members.
The economic impact is also major: it is estimated that the project will inject up to $35 billion into the GDP annually, and create more than 51,000 jobs during the construction phase. In the long term, the implementation of this infrastructure could double or triple VIA Rail's passenger numbers over the next 12 to 15 years, reflecting growing demand for fast, efficient transportation. At the same time, this project could stimulate other rail initiatives across the country, notably by inspiring new infrastructure dedicated to high-speed passenger transport. However, cost management, land acquisition and environmental assessments remain major challenges.
In conclusion, the TGV between Quebec City and Toronto is not just about improving travel: it could well usher in a new era of rail in Canada, focused on innovation, sustainability and international competitiveness.
🔍🌟Opportunity detected!
Canada has a significant need for suppliers capable of meeting the specific requirements of railway lighting, as technical and regulatory requirements differ considerably from those of public lighting. Adopting lighting solutions that comply with rail standards and the Buy America Act (BAA) is essential to effectively penetrate this market in North America.
Innovations and green technologies
The rail industry is undergoing a significant transformation thanks to the integration of advanced technologies and sustainable initiatives.
The electrification of rail lines, for example, is helping to reduce greenhouse gas emissions while improving energy efficiency. What's more, the development of zero-emission vehicles (ZEVs), such as hydrogen-powered trains, is opening up new prospects for suppliers of environmentally-friendly solutions. Quebec-based Tugliq Énergie is planning to launch a hydrogen train project for mining transport on the North Shore, with the aim of reducing the sector's carbon footprint. Pilot projects such as the hydrogen train in Charlevoix highlight the popularity of new transport technologies and their potential to attract tourists. This type of innovation represents not only a technological breakthrough, but also an economic opportunity, with potential investments of tens of millions of dollars. Rail infrastructure projects in Montreal, for example, place a strong emphasis on electrification to foster a more sustainable future. The Réseau express métropolitain (REM), an automated light rail transit system, is fully electrified and designed to provide fast, clean, zero-emission transportation. This network will extend along several key routes in Greater Montreal, including as far as Montreal-Trudeau airport, helping to reduce greenhouse gas emissions by offering an alternative to personal vehicles. In addition, the extension of the Blue Line will include five new stations, linking the current Blue Line terminus in Anjou, facilitating access to residents of Montreal's east end while promoting the economic and social development of these neighborhoods.
The introduction of artificial intelligence (AI) and Big Data is also transforming the way rail operations work. These technologies enable route optimization, proactive infrastructure management and improved safety. Thanks to advanced analysis systems, companies can anticipate maintenance needs and reduce downtime, improving service reliability.
In short, green and digital innovations are paving the way for a more sustainable, high-performance future for the rail industry.
Long-term projections
Canada's rail industry is expected to grow significantly, supported by investments in sustainable transportation technologies and modern infrastructure. The government's Transport 2030 plan calls for a transformation towards a smarter, greener and safer rail network, in line with sustainability objectives.
Future investments
Federal investments will focus on the green transition and strengthening trade corridors linking Canadian cities to international markets, thereby stimulating the national economy.
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