Alberta not ready to kick-in funds on Calgary-Banff rail link despite new proposal

The company behind a proposed passenger rail service that would connect the mountain resort town of Banff, Alta., to the Calgary International Airport says the project would cost $1.5 billion, and it could use some funding from the Alberta government.

But while Premier Jason Kenney says he sees much merit to the project, the province isn't ready to dedicate funds toward it at this time.

Still, the owners of the Mount Norquay ski facility just north of the town have submitted a new proposal to the Alberta government in hopes the rail line could be constructed as a public-private partnership.

Liricon Capital Ltd. owns the ski resort and also holds a long-term lease for the Banff Train Station. It's newly named investment partner is Plenary Americas, a portfolio company of Caisse de depot et placement du Quebec (CDPQ).

The company has been working for years to develop a multi-modal tourism and transportation hub.

They say the link between the tourist town and Calgary would help reduce the burden of passenger vehicles in Banff National Park.

On Wednesday, Kenney said the provincial government is looking at the proposal closely but isn't ready to put money behind it.

"We are not at any point ready to commit to money on this. We have to give this a very close rigour, and that's the stage we're at right now," he said.

Kenney says the train has "a lot of potential merit," such as improving tourism in the Banff area, increasing access to jobs in the Bow Valley and reducing carbon emissions.

Jan Waterous, managing partner with Liricon Capital, says the goal is to have the train run on hydrogen but "worst case scenario" they have the train run on diesel and electricity to start, then transition to hydrogen.

She said her company's proposal is to have half of the $1.5-billion capital cost provided by the Canada Infrastructure Bank, which has already signed a memorandum of understanding to complete studies and due diligence for the project.

The remaining portion would be covered by Liricon, Plenary and debt financing, Waterous said. While project partners aren't asking the province to commit any upfront capital funding, they are asking it to commit $30 million annually to the project. The province would not start payments until the rail line is complete, which could be as early as 2025.

"It's essentially a mortgage payment on half the capital. And the reason it's only on half the capital is because the other half we can cover from ticket prices," Waterous said in an interview. "So this is actually very good value for the province."

Liricon hopes to get a yes or no from the province by early February, Waterous said, so that it can move on to the advanced design phase of the project