High speed rail is not a luxury, it's quite the opposite. Labour is the biggest long term expense, even after construction, so it's actually cheaper to operate faster trains. The current trip time is 10-12 hours, multiplied by the wages of a large cabin crew.
Having done Ottawa-Toronto many times, Via currently charges about 60-70$ for advanced economy tickets. Same day tickets are typically in the 120-150$ range, but I have seen over 200$. So definitely cheaper than flying currently. Hard for me to judge how much that price would increase in response to HSR cost and popularity.
High speed travel in Europe is quite affordable. A 3h train trip (~360 miles, like the distance between Toronto and Montreal) costs about 40€ in Italy or in France if you buy in advance.
For Ontario it's on Metrolinx and for Toronto TTC. Just in November TTC got roughly $750m in fed funding for subway cars especially for Line 2 cars that are reaching EOL, but also for the expansion lines in Scarborough and Yonge North.
Also, who's going to want to go from Toronto to QC/Montreal? Unless you live in/near the French quarter of Toronto, this doesn't really benefit many people... language barrier and Quebec's deep hatred of English and such...
On top of the other comments, majority of Montreal is bilingual. There's a reason there's a whole neighborhood of anglophones, the city is very English friendly.
You're severely overstating the 'hatred' for english, Montreal is essentially bilingual and most people there are very friendly to english speakers.
Outside of Montreal you can get a bit a mixed reception to english, but there's no real hatred. Just pride in their own culture and a bit of fear about the ongoing loss of that which is probably reasonable.
They should spend the money on INTRA city travel. Expand the subway systems in Toronto and Montreal.