The recently released Calgary – Bow Valley mass transit feasibility study has residents and tourists alike imagining rail trips through the Bow Valley Corridor. But how would a passenger rail service impact the Calgary economy? Calgary Economic Development analyzed the impact of this passenger rail for Calgary for the estimated completion/operational date of 2027.

Calgary-Bow Valley mass transit study

The viability of passenger rail transit service between Calgary and Banff National Park was commissioned by the towns of Banff, Canmore and Cochrane, as well as the City of Calgary, and Improvement District 9, as a proposed way to reduce vehicle congestion along the Bow Valley Corridor.

For rail service, the study recommended a central Calgary rail station in East Village or a station near the Sunalta C-Train station at the west end of downtown.

Banff visitors: a current snapshot

In 2016, there were 3.8 million visitors to Banff National Park – 840,000 visitors (21 per cent) stayed overnight in Calgary. Based on data from the Tourism Industry Association of Canada and the composition of visitor origin, an average overnight visitor spends an average of $1,000 per trip in Calgary (this includes accommodation, food/beverages, clothing, local transportation and other spending).

For 2016, the visitors and average spending figures estimate around $840 million in total spending for overnight stays in Calgary while visiting Banff National Park. This is approximately 52 per cent of the total visitor spending in Calgary in 2016.

Visitors forecast 2027: without rail service

Calgary share of visitors will continue to grow as Banff remains a favoured destination for tourists worldwide. Destination Canada approximates that Canadian visitor spending will increase by 2 per cent per year on average.

Considering annual visitor growth rates and spending increases, we estimate that more than 1.03 million Banff visitors will stay overnight in Calgary in the year 2027. Without the inclusion of rail service, our analysis concludes that 2027 spending of overnight Calgary visitors (who travel to Banff) will be $1.28 billion – an average visitor spending of $1,250.

Visitors forecast 2027: with rail service

We anticipate that the existence of a Calgary to Banff passenger rail service will impact the Calgary economy in two ways:

A rail service would increase overall visitors to Banff – bringing new visitors to Calgary. A rail service will grow Calgary's share of Banff visitors – increasing the per cent of total visitor spend.

Conservative, moderate, and optimistic scenarios were analyzed to calculate the growth in Calgary’s spending share and induced demand for 2027 in the table below.

Total spending by share of Calgary visitors All things being equal Conservative Moderate Optimistic 22% 35% 45% 55% 2027 Induced demand All things being equal 0% $ 1.27 B $2.03B $2.61B $3.18B Conservative 2.5% $ 1.31B $2.10B $2.67B $3.26B Moderate 5% $ 1.34B $2.13B $2.74B $3.34B Optimistic 10% $ 1.41B $2.23B $2.87B $3.59B

As an example, with a moderate growth and an induced demand at 5 per cent, the direct economic impact to Calgary’s economy from visitor spending will increase from $1.3 billon to $2.7 billion in 2027.

The results from this analysis emphasize that a mass transit system will accelerate urbanization and connectivity in Calgary, expand and enhance tourism, cultural and recreational assets. Calgary is more than a doorway to the Rocky Mountains and the rail service will not only benefit Calgary’s opportunity but highlight why Calgary is a great place to make a living and a life.

For more information on the economic impact of the Calgary to Banff passenger rail service, contact Hubba Khatoon, Research & Strategy Economist, Calgary Economic Development.