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Does Canada's Tech Future Ride on Rails?

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When Steve Woods got a call from a high-profile Silicon Valley venture capitalist, he really wanted to help the guy out. The VC was flying into Toronto to take care of some business and was hoping to shoot out to Kitchener-Waterloo for a few meetings while he was in town. Woods, Google Canada's senior engineering director, is a problem solver, but there was nothing he could do to get around the fact that it'd take his compadre close to two-and-a-half hours to get from downtown Toronto to K-W during the times he could travel that day.

"I said I'd help him work out whatever options he wanted and I gave him some train options, which were just ludicrous. He was like, 'That's just crazy. Ten at night or 5 in the morning...what are you talking about?' And so, it was very much untenable."

Tech peeps, it may be time to focus more seriously on teleportation.

If the Toronto-K-W region is ever to fully reach its potential as a technology supercluster, functioning fluidly as a single, contiguous innovation sector, the ability to move human capital between the two nodes is essential, be it employees, investors or entrepreneurs.

As it stands, the only options available during normal business hours are a twice-daily train service that is only of use to commuters travelling into the GTA from Waterloo Region and a highway corridor so traffic-clogged that short distances on a map become time-sucking journeys aided by the magic of bumper-to-bumper traffic.

Those who would argue that there's no real need to travel in an age when remote communication is easy miss the personal point: As OMERS Venture CEO John Ruffolo explains it, the innovation sector only really begins to flourish when people physically run into each other, share ideas and collaborate on new ones. Those "serendipitous collisions," as Ruffolo calls them, are where the magic really happens -- and they don't occur at opposite ends of a computer terminal. Besides, there's a reason why successful CEOs can almost always be found on the road, even if it is the 401.

"That human interaction is absolutely critical," says Kunal Gupta, CEO of Polar, a Toronto-based software company that provides publishers with a platform to deliver and monetize their content on mobile devices. "I'm constantly in Waterloo and I'm meeting Waterloo guys constantly here in Toronto -- I think that activity is already happening. It's not scalable today and it's not efficient, but it is already happening."

The dream train is in the station

Okay, so the transporter's not going to happen anytime soon.

But can the same be said for a high-speed train with regular, all-day service from Toronto's Union Station to Kitchener's downtown core and vice versa?

It seems like a dream, but Rod Regier, the executive director of economic development for the City of Kitchener, is building a case for it.

"It's an expensive project," he concedes. "You have to twin the tracks, you have to build some bridges, you have to put in some infrastructure -- a 2009 estimate pegged the cost at around $400-million, but it's gotten more expensive now."

More importantly, it requires buy-in from the province, the feds and Metrolinx, and with myriad competing demands, it's not going to be an easy sell. (Metrolinx's current provincial transit improvement plans are focused on train service through the Toronto-Hamilton corridor and from Pearson Airport to Union Station in advance of the 2015 Pan Am Games in Toronto, with no mention of the corridor west of the airport.) Still, a business case is at least being discussed at the municipal level.

"If we took all of the vacant land within a five-minute walk of the multi-modal station at the intersection of King and Victoria [in downtown Kitchener]," says Regier, "we could put about five million square feet of building on the scale of the Tannery in place."

At current densities, Regier says you could put at least 15,000 tech workers into that space. At 2011 figures, he continues, those tech workers would generate about $1.1-billion in personal income, bringing their personal income tax total to the magic number of, you guessed it, $400-million.

"So the personal income tax haul, out of that one station area, is going to be enough to pay for the system upgrade every single year for the rest of time, never mind the operating costs. We're not talking about corporate income tax. We're not talking about HST, we're not even talking about the multipliers [other jobs] that come with tech employment. We're just saying that the personal income tax coming out of directly employed tech workers in that one space will pay for this system. We think it's a good case."

It dovetails nicely with a recommendation this week from the Transit Investment Strategy Panel -- a citizen board appointed by the Premier to scrutinize the Metrolinx Investment Strategy -- that only revenues collected within the Greater Toronto Hamilton Area be used to fund transit projects in that region, freeing up revenues collected outside the GTHA to be used in other priority areas.

Whether or not it carries weight with the province, the feds or Metrolinx remains to be seen: While Regier and his ilk are finalizing the details of their pitch, the triumvirate is looking the other way.

The Pearson connection

Understandably, Metrolinx's focus on improving transit in and around Toronto before the 2015 Pan Am Games doesn't thrill advocates of a more efficient Toronto-K-W train system. But it is a starting point. Honest.

The Union-Pearson Express, a rail link between Union Station and Pearson Airport, is expected to be completed by in 2015, offering travelers a 25-minute train trip between the country's two busiest transit hubs. For tech businesses visiting the area, it'll make travel into Toronto's downtown core a snap. And for the regional tech community at large, that opens up access to more foreign capital and more opportunity.

Make it easy for a venture capital guy to fly in from San Jose, says Steve Woods, and the potential for investing will increase accordingly.

"You can measure [venture investment] actually," says Woods. "If you draw a circle around where their office is, [their investments] decline with anything, like transit, that adds time to them and their companies."

To be on the map for investors worldwide, says Woods, we need to make it easy to get to K-W from the GTA and other major destinations.

The UPE, then, should be viewed for what it could be: the first real link in a train corridor that's needed to connect Waterloo Region to both Pearson (which is key) and Toronto's downtown core. And it's already under construction.

Reality check for the dream train

The K-W connection, on the other hand, remains a pipe dream.
It currently takes two hours to travel on the GO Train from Kitchener to Union Station - a trip that, under ideal conditions, one could theoretically make in 70 minutes by car. (Via also runs two trains daily that take about 100 minutes but their schedules aren't ideal for most commuters.)

"Quite honestly, the fact that Toronto and Waterloo are largely connected by trains hauling grain is sort of stupid these days," says Google's Woods. "There should be some sort of people mover that makes sense - in Japan they would solve this, cause I'd be getting from here to downtown Toronto in about 8 minutes. But you know, I can't. Instead it's nearly two-and-a-half hours of near-death experiences on the 401."

Hyperbole? Maybe, but it's a sentiment justifiably borne out of frustration with what's possible and what's actually happening.

So when it comes to the nuts and bolts of actually running faster, more regular passenger train service through that corridor, Jeff Casello, one of Canada's foremost experts in public transportation, provides a reality check.

He agrees that Regier's $400-million upgrade estimate sounds about right (though he thinks it'd be better funded by collecting tolls on the 401), but cautions that anyone expecting to see bullet trains flying along at 350 km/h is going to be sorely disappointed. Better service is one thing, huge speed increases are another.

"The physical rails have to be pretty perfect in order to start going to any kind of higher speeds," says Casello, associate dean at the University of Waterloo's school of planning and department of civil and environmental engineering. "When you start getting to higher speeds you need to be much more precise with the physical infrastructure so it would take a pretty significant upgrading of our physical infrastructure to get to any kind of higher speeds."

Currently, he told me, trains in that corridor could top out at 80-90 km/h, though passenger train speeds here are commonly clocked at around 50 km/h due to track restraints and conditions. Further complicating matters is the fact that this is currently a single-track stretch of rail shared by GO, Via and heavy freight trains, all competing for precious track space. For the time being, freight pays the bills.

Perhaps most important, says Casello, is the need for any busy passenger train to tie into a substantial, high-functioning transit system wherever it drops off it passengers.

"If you're going to travel by rail, between cities, you need to be able to move around easily in the city where you end up," says Casello. "So if you end up in Toronto at Union Station, you've got all sorts of choices to get anywhere in the city. The key thing is for the Region of Waterloo, with our growing bus system and with our proposed LRT, the same thing will be true."

If the current plans stay on, ahem, track, Casello says he expects to see the Region's light rail system up and running by 2017.

"When you get off the train you'll be able to access the entire region really conveniently with good transit. And that gives us a huge advantage."

For the tech companies settling in Kitchener's Innovation District, that convenience is an understatement - their offices will be walking distance from the train station.

The rail gamble

Meanwhile, back in Toronto on any given morning you can find groggy Googlers boarding a 32-person shuttle bus that ferries them up the 401 to the company's Kitchener-Waterloo office. Both Open Text and BlackBerry run similar employee shuttle services and, like any vehicle navigating the 401 corridor, they're subject to the whims of road travel, from dangerous weather to infuriating congestion delays. Whether they arrive by shuttle, car or "vanpool" (Google also runs a 7-seater van from the downtown core), Steve Woods says between 20 and 30 per cent of Google's staff commute in from the GTA. Waterloo Region itself estimates that there are as many people commuting into the area for work every day as there are going out.

Little wonder then, that the current twice-daily GO Train service from Kitchener to Union Station has raised some eyebrows. Thing is, with 100 passengers estimated to be departing from K-W each day, the case for increasing frequency on that line seems hard to make.

"I think this is the chicken-egg problem we always have in transportation planning," says Casello. "There's not many people using the system right now, but that's because the system is bad."

Certainly, demographic projections warrant a second look: by 2041, the Ministry of Infrastructure expects to see the Waterloo Region's population spike by 64 percent; job numbers in the Region are set to grow by 38 percent in the same time frame.

But it's going to take some bold moves to see any plan put in motion.

Just ask the transportation guru: "As soon as you start to invest in the system, then you start to see people respond. But until you actually start to provide alternatives for people, you can't really know what the demand is," says Casello. "And in nearly every instance when you improve quality of a transportation investment, you see increased demand for that."

Build it and they will come.

If a technology supercluster is ever to develop between Toronto and K-W - and the economic development of the country may depend on it - that's one of the biggest bets we're going to have to make.