CDPQ Infra's REM de l'Est Project Put on Hold?

Jason Magder of the Montreal Gazette reports planners of the REM de l'Est put project on hold: 

Facing criticism from urban planners, heritage activists, the region’s transit authority and the city’s mayor, the planners of the city’s most expensive transit project will go back to the drawing board.

The Caisse du dépôt et placement du Québec said Thursday it put the controversial $10 billion REM de l’Est project on hold, as it has not yet met the social acceptability needed for a project of such importance.

Destined to be presented for public hearings at the Bureau d’audiences publiques sur l’environnement this spring, the project is now on hold indefinitely so planners can respond to criticisms of the project. That means the project likely won’t be delivered by the original target of 2029.

“With the magnitude of a project like the REM de l’Est, which is essential for the east and northeast of Montreal, we place great importance on all partners adhering to a common alignment,” said Jean-Vincent Lacroix, a spokesperson for CDPQ Infra, a subsidiary of the Caisse. “Taking the time to ensure such alignment before launching the BAPE process is natural and necessary.”

First presented in December 2020, the project would see a driverless electric train network built over 32 km and serve 23 stations in transit-starved areas that aren’t covered by the métro network, connecting the downtown core with Montreal North and Pointe-aux-Trembles.

The project, however, has been the subject of much criticism, specifically that the above-ground rails in the downtown core will create an urban scar in the city’s landscape, akin to another Metropolitan Expressway.

Montreal Mayor Valérie Plante repeated on Thursday that the project must meet the “winning conditions” that the city has already outlined in meetings with CDPQ Infra, and it must also address all the concerns of the committee of independent experts that have evaluated the project. So far, that has not happened, she said.

“CDPQ Infra must ensure the success of the REM and do its homework so that this can be an exemplary project,” Plante said in a statement. “All the experts endorse the conditions outlined by the city since the beginning of this process so that this project meets the standards of Montrealers.”

Plante added that she wants the city to have a seat at the table so it can be part of the decision-making on how the project will be integrated into the urban landscape.

Others have been more categorical in their criticism of the project. Longtime urban planner and transit expert Florence Junca-Adenot said the project would weaken existing transit systems by competing with them.

“Normally when you build a new project, it should increase the use of public transit and serve the needs of commuters. In this case, the REM de l’Est does neither of those things,” Junca-Adenot told the Montreal Gazette in February.

The Autorité régionale de transport métropolitain said last month that CDPQ Infra should find “a better alignment between the commuting needs, the urban settings it would cross, the proposed mode and the construction costs.”

However, the city’s opposition blasted Plante, saying she is endangering the future of the project, and East End commuters will continue to be underserved.

“Due to her lack of leadership, Mayor Plante is slowing killing Montreal’s largest public transit project,” opposition leader Aref Salem said in an emailed statement. “She has had more than a year to clarify with stakeholders what she considers ‘an exemplary integration’ of the REM de l’Est since its first announcement in December 2020.”

Junior transport minister Chantal Rouleau, whose East End riding would be served by the project, said the project needs to be improved, but it must come to fruition to better serve the needs of commuters.

“At this stage, it is premature to hold a BAPE,” she said in a statement. “That being said, we want the BAPE to happen. It is necessary for a big project such as the REM the l’Est. We are still confident that we will come up with the best project for the East of Montreal.”

I wasn't going to touch this hot potato with a 10-foot pole.

But it's Monday, most people working at Ontario pensions are on break this week, so I decided to talk a little about REM de l'Est since it's closer to home.

Important preamble: Nobody at CDPQ or CDPQ Infra contacted me about this story and they definitely have nothing to do with my views below.

And since I don't shy away from controversial subjects, let me state right off the top this is Montreal politics at its worst and if this REM de l'Est project isn't delivered by the start of the new decade, the people living in Montreal's East End will pay the ultimate price because they will continue using subpar transit for their commuting needs.

Got that? It's not Mayor Plante and the bureaucrats advising her that will pay the price. They'll be long gone, collecting their fat defined benefit pension payments by then. It’s the working class and middle class increasingly living in the city's East End which will pay a very heavy price.

So why did the project get put on hold?

I reckon the folks at CDPQ Infra are fed up with the political nonsense and decided to once again open public discussions on the project.

But the real reason this project is being put on hold is because of special interests looking to torpedo the REM and now REM de l'Est.

These are architectural, urban planning and environmental interest groups who didn't like the "aesthetics" of the proposed REM de l'Est because god forbid we build it above ground and "expose our city to an eyesore".

"Let's build it underground," they say or just don't build it at all.

Great, sounds easy, except building underground will balloon the cost by ten times minimum and endanger our buildings in the downtown core.

How much more? Minimum ten times more. 

In fact, an article just came out on how Montreal Metro's Blue line extension is finally a go, but province says it's behind schedule:

After being discussed for decades, the Montreal Metro's Blue line extension project is back on the rails for good and finally on its way to realization, the Quebec government announced Friday.

But the project will be more expensive than originally planned, and it is three years behind schedule, set for completion in 2029.

The Blue line extension, which in recent years had an estimated price tag of $4.5 billion, is now set to cost $6.4 billion, said Chantal Rouleau, the province's junior transport minister who is also responsible for the Montreal region.

Rouleau announced the plan during a news conference Friday, alongside Montreal Mayor Valérie Plante.

Rouleau confirmed the plan is still to add five more stations to the Metro line — Pie-IX, Viau, Lacordaire and Langelier, with the terminus being in Anjou.

The Anjou station will now be built under Highway 25, and not on the parking lot site of Galeries d'Anjou — a plan that was sharply contested by the shopping centre's owners.

Cadillac Fairview and Ivanhoé Cambridge went as far as to launch a legal fight when Montreal's transit authority, Société de transport de Montréal (STM), filed an expropriation notice. 

"The Blue line will go to Anjou. The project has been enhanced to open up to an entire population who will now have access to a public transit system worthy of the name," said Rouleau in a statement. 

The province says moving the station to Highway 25 will provide access to the surrounding neighbourhood's and the incoming light-rail network, known as the REM de L'Est. However, that project is now on hold over a dispute with Montreal.

As for the Blue line extension, the province will foot much of the bill, with the federal government expected to pitch in $1.3 billion. 

Quebec officials also announced a $1.12 billion grant to the Montreal's public transit authority, the STM, to continue planning the Blue line project and fund the Metro's asset maintenance and universal accessibility programs.

Provincial politicians last gathered for an announcement regarding the project during the spring of 2018, six months before the last provincial election. 

Regardless of the delays, Montreal's mayor says this is something her administration wants.

"Our administration has always made mobility a priority and we have worked tirelessly to make the Blue line extension a reality," Plante said in a statement.

Aref Salem, leader of the official opposition, Ensemble Montréal, said residents of the Saint-Léonard and Anjou boroughs have been waiting for this project for more than 40 years. 

While it's good news for those who live in the city's east end, Salem said, he criticized Plante for not maintaining "tight control" over the project's progress. 

"After numerous court cases and a project bill that is increasing by $15 million every month, it took the Quebec government to take the file in hand to finally move forward," said Salem in a statement.

As you can read, the article clearly states that the project is now set for completion in 2029 at a cost of $6.4 billion instead of the initial estimate of $4.5 billion.

Think about that, extending the Blue line by nearly 6 km will end up costing just as much as the entire 67 km REM project.

All this to say it costs a lot more (ten times more) to dig underground and there are always delays and cost overruns. 

It's also interesting to note there's no public outcry on the cost overruns concerning the extension of the Blue line which will amount to $2 billion more than initial estimates but everyone is up in arms over REM de l'Est.

It's beyond ridiculous.

I'm also fed up reading nonsense and disinformation emanating from the the Autorité régionale de transport métropolitain (ARTM), the Société de transport de Montréal (STM) and Exo, which operates existing commuter trains.

They all have an angle to play and that's why they're spreading lies and disinformation on this project.

Two weeks ago, Allison Hanes wrote an article, Why not consider alternatives to the REM de l'Est?, ending n this note:

The point is, the REM de l’Est should not become a take-it-or-leave-it proposition. If we’re going to spend $10 billion, it’s worth taking the time to get this right. Not only is this important to ensure significant amounts of public and private money are used wisely, it is also crucial given the role transit projects play in shaping cities for generations to come.

I'm not sure if Ms. Hanes is aware of the intense planning that took place for the REM but it's the same planning and consultations that are taking place for the REM de l'Est.

These are top-notch planners and engineers who know what they're talking about and CDPQ Infra has extensively consulted all stakeholders including the public.

Yes, $10 billion is no small chunk of change but it will balloon to $20, $30 billion or more if we succumb to the demands of every interest group (just look at my Blue line example and that's not just due to inflation!).

Or, more likely, they will kill this project and screw the hardworking residents living in the East and Northeast end of Montreal.

That's the real tragedy here.

Mayor Plante's "winning conditions" are not in the best interests of the people she is serving. Not when it comes to housing and not when it comes to transit needs.

I have more confidence in the CAQ government when it comes to making better decisions for the long-term prosperity of the city and province.

Anyways, I got my views out there, feel free to agree or disagree but the amount of nonsense I am reading these days on REM de l'Est really irritates me. 

I hope the public consultations are fair but I fear they will be hijacked once again by special interest groups looking to kill the project. 

Montreal's residents in the East End deserve better, a lot better.

Below, CDPQ Infra is proud to announce the REM Montréal-Est project! Easier to get around, time savings, connections with the existing network, plus a stunning view of the city and river. This new public transit network will further drive the development of Montréal-Est.

Think about it, getting to downtown Montreal from Cégep Marie-Victorin in 30 minutes, from Pointe-aux-Trembles in 25 minutes and from Maisonneuve Park in 10 minutes.

I also embedded a recent CTV News Montreal report on the project going over different views.

I still believe REM de l'Est will significantly improve the quality of life of people living in this area and immensely improve our city in every way. 

I hope the provincial government takes control here and we get this project back on track (something tells me this project will be part of a campaign promise come next provincial elections).

Update: CDPQ Infra posted a comment, A better understanding of the model, which I encourage you to read here and below:

Why talk about efficiency when we should be talking about public transit? Are the two compatible? 

First of all, let's remember that the mission of the Caisse de dépôt et placement du Québec (CDPQ) is to make Quebecers' savings grow. This is the very foundation that underlies all of its investments. But is this search for profits incompatible with developing a quality transportation solution?

Ultimately, the expected return is not guaranteed and will only be achieved if the proposed transportation solution is adequate and meets real needs. This is the basis of the link between our expertise and public interest. This solution has to make sense in terms of service, while being viable and achievable within a reasonable timeframe. Seeking a return becomes a powerful incentive for efficiency, but cannot be at the expense of the network’s acceptability and adoption by the populace. 

This is why the private sector is generally not attracted to this type of investment, because the returns are generated over the long term. 

Ultimately, the more people who use the REM or the REM de l’Est, the more revenue it will contribute to meeting the performance target. And the more public transit users there are, the better it will be for mobility, the environment and society’s collective well-being.

The purpose of CDPQ Infra

CDPQ created an infrastructure subsidiary, CDPQ Infra, to act as principal contractor for major public infrastructure projects in Québec, elsewhere in Canada, and around the world. Why? Because on a global scale, the infrastructure deficit is growing and investments in major infrastructure projects, including public transit, are not keeping pace. Long-term investors, like CDPQ, can play an important role in bridging this gap by providing capital and expertise.

It was during the financial crisis of 2008 that CDPQ realized that infrastructure investments offered more stable and resilient returns in the face of market fluctuations. In this context, CDPQ began building a larger infrastructure portfolio. Now, rather than just investing in the four corners of the world, the appeal is to use this capital to also contribute to developing transportation here by creating a team of dedicated experts. Hence the reason behind CDPQ Infra’s arrival.

A beneficial approach on several levels 

The organization’s model is unique: acting as an investor and, simultaneously, as principal contractor. In concrete terms, following a mandate received from the government, CDPQ Infra ensures the realization of a transportation project from A to Z, from planning to completion, including consultations and financing. The company also assumes the risks associated with the project: financial risks, construction risks, traffic risks, etc. It is this risk taking that explains the desire to identify a viable and realistic solution that will be able to see the light of day. 

For public authorities, this is a lever for ensuring the completion of major projects, by contributing to part of the financing while avoiding taking significant risks (cost overruns, delays, loss of goodwill, etc.).

This model sparks curiosity even on a global level as governments are looking for innovative ways to finance infrastructure projects which, let’s not forget, are in deficit.

Business Model Table

Example: Construction of the REM under way

In 2015, the Government of Québec asked CDPQ to study a structuring public transit project for the Greater Montréal area. At the time, two needs had to be met: a link to Montréal-Trudeau International Airport and another to the South Shore. The file had not progressed for years and it was then that CDPQ Infra, a CDPQ subsidiary, was given a mandate by the government. After eight months of intensive studies, the subsidiary submitted a solution that was able to meet both existing needs with a single project: a 67-km, fully automated electric light rail network with 26 stations. The REM was born.

Leading the way with a complementary approach

These are challenging times for public transit services, and the health crisis does not help the financial environment, with many operators calling for additional funding. This situation must not lead to a decline in public transit, which would inevitably have consequences for mobility and the environment. This means being receptive to other funding structures and proposing new methods, and sometimes even a paradigm shift. 

This paradigm shift must not be at the expense of other networks. For this reason, it is important to work closely with all transportation companies and the ARTM. In this regard, CDPQ Infra has initiated new ways of doing things that lead to innovation for all: 

  • The mechanisms defined for land acquisition and expropriation in Phase 1 of the REM paved the way for an approach that is now defined for everyone, with Bill 66, in order to simplify the processes that were in place and accelerate certain infrastructure projects that are important to society.
  • Contributions related to the sharing of increased land value, allowing a portion of the profit raised through future real estate developments to be reinjected into public transit, have given the ARTM additional leverage for the financing of any transportation project in the metropolitan region.

Beyond innovation, the introduction of a structuring transportation network will boost the existing offer and the long-term efficiency of the overall network:

  • The arrival of the REM will allow the redeployment of bus networks to optimize local service for the benefit of communities, and increase the number of trips. 
  • Metro lines will become less congested during rush hour, attracting more customers over the long term. 
  • The REM will encourage many users to leave their cars at home and take public transit. Those who were already using public transit will see their quality of service increase by avoiding long bus rides to get to the metro. 
  • With frequent service, the arrival of the REM will encourage more users to take public transit outside of rush hour and also use the metro, which will have several connections with the REM. 

We need to rally behind a vision where networks are not in competition with each other, but where each contributes more broadly to providing the best possible service to users. Any new, modern metro line increases the attractiveness of public transit in general, so all networks can benefit. And let’s not forget that investments in public transit generate benefits that go far beyond the economic aspect: reduced greenhouse gases, gains in urban space and revitalization of neighbourhoods, improved quality of life, time savings for users, and much more. 

Map of the major metropolitan transportation network

REM and REM de l’Est: A collective success

If projects such as the REM and the REM de l’Est prove successful, as CDPQ Infra hopes, the whole of Greater Montréal will benefit. Citizens will have access to a modern public transit system that will serve communities and contribute to neighbourhood development, as well as generate long-term returns for Quebecers’ savings.

This is a great comment on the model and let me reiterate this: "We need to rally behind a vision where networks are not in competition with each other, but where each contributes more broadly to providing the best possible service to users."