"We hope to go out for a request for proposals in the next couple of months, and that would be a private-sector venture," Collenette told reporters.

Ten days ago Finance Minister John Manley said a high-speed rail link between Toronto, Montreal and Ottawa - a region where about a third of Canada's 30 million people live - was being studied, but he declined to say whether funds would be earmarked for that project in his upcoming budget.

The idea of a C$300-million ($198 million) rail link that would carry passengers from Toronto's downtown Union Station to Lester B. Pearson Toronto International Airport, Canada's busiest, in about 18 minutes received municipal approval about two years ago. Pearson accommodates about 25 million users a year and is about 50 kilometres (30 miles) from downtown.

The airport line would not involve Via Rail, the government-funded passenger rail company.

"We made the decision VIA will maintain itself as a Crown corporation (state company) and the notion of franchising is just not on, except what I'm looking at for the link between Union Station and Pearson airport in Toronto," he said.

High-speed intercity train development, however, would likely involve Via.

Like Manley, Collenette declined to say if the federal budget due later this month might include billions of dollars for state-funded high-speed rail links, with trains running as fast as 215 kilometres an hour, but said that there are "a lot of train fans in cabinet."

Both ministers said a high-speed rail link in the Quebec City-Windsor, Ontario, corridor would help Ottawa meet the 10-year infrastructure and Kyoto Protocol environmental goals that it outlined in last September's policy-setting Speech from the Throne.

Trains are more energy efficient than using airplanes or cars.

Via trains currently running between Windsor through Toronto to Montreal and Quebec City share track with freight lines Canadian National Railway Co. (CNR.TO) and Canadian Pacific Railway Co. (CP.TO).

A proposal a decade ago to build a high-speed line in the corridor estimated a cost of about C$11 billion.

"(The new plan) will not cost as much as C$11 billion, which was the last proposal, it's significantly less than C$11 billion," Collenette said.

"You do it in phases and you make improvements throughout the corridor," he added. "The kind of plan that's envisaged you have dedicated track for passenger trains, which will help CN and CP have freight only lines."

Montreal-based aerospace and railway engineering firm Bombardier (BBDb.TO), which appointed former CN chief executive Paul Tellier as its chief executive last month, stands a good chance of winning lucrative contracts.

"I'm a great proponent of passenger rail travel and we've come a long way by revitalizing VIA Rail, their loads last year increased by 11 percent, 30 percent in VIA One. That is astounding when you think about it, so the market's there and we have to service that market," Collenette said.