Montreal's $5-billion rail line starts up in test case for one of Canada's biggest pensions
After years of delays and hundreds of millions of dollars in cost overruns, a Montreal rail system planned, built and largely financed by Canada’s second-largest pension manager is finally rolling.
How it performs will determine whether the project was an expensive experiment or the start of a whole new business line for the $402-billion investment firm.
Caisse de dépôt et placement du Quebec (CDPQ) undertook the 67-kilometre Réseau express métropolitain project in 2015 to link Montreal-Trudeau International Airport and several suburbs to the centre of Canada’s second-biggest city. The project ran into unforeseen obstacles, including the COVID-19 pandemic and the discovery of 100-year-old explosives in a tunnel, which pushed the budget from $5 billion to more than $7 billion.
The first phase of the system, known as the REM, opened on July 28, connecting the southern suburb of Brossard to Montreal’s central station. A second phase in the western suburbs will start next year, and the airport station is expected to be ready by 2027.
Despite the challenges the project faced, CDPQ chief executive Charles Emond praised his firm’s ability to see it through and said the firm is considering similar undertakings around the world.
“The Caisse is one of the few players in the world capable of conceiving, designing, planning, realizing and financing a project like this,” Emond said. “Whether we can do it internationally? Absolutely, it’s in the cards.”
Even with the delays, the project came to fruition quickly and the financial backing of CDPQ ensured the project went ahead, while similar projects like the AirTrain to LaGuardia Airport in New York have died, Emond said.
The governments of Canada and Quebec invested about $3 billion,
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