Any sort of train system will not make economic sense until we densify the end points well past single family homes with some scattered townhouses.
Even Westhills isn't dense enough to economically support a train system, and there's nothing else on the route that even comes close to that.
I honestly think our best path forward is to just wait for electric autonomous busses rather than try to build light rail.
The limiting factor (both for capacity and cost) on the bus system right now is drivers, operating a bus 24/7 for a two years costs costs more in driver wages than buying a fully electric bus and prices are dropping rapidly on those. The fuel costs also drop absolutely massively with the switch to electric, on the order of 80-90% cost reduction. Given that the busses will last for decades, you can see how much cheaper a driverless electric bus will end up being over it's life allowing us to buy far more (More routes, more frequency) for the same money we're currently spending and run them for a greater portion of each day (downtime for charging and maintenance) so you could easily have night service if there was a even a hint of demand.
I think that makes sense from a purely financial view, but that it's not viable overall because it won't sufficiently incentivize transit.
Buses are ultimately stuck in car traffic, because it's politically difficult to put dedicated bus lanes everywhere given that the reason buses get chosen is usually to minimize the cost and the impact to cars. Given that transit is inherently less flexible that a car, and that this cuts out yet another potential advantage over cars... this kinda cements transit as the "inferior option for poor people" like it's already viewed today.
I really think you need to overinvest in transit with something like LRT, both because it's high-capacity for the long-term future and because it makes people feel like transit is a comfortable, efficient and classy way to travel, thereby increasing ridership. My hometown of Kitchener-Waterloo did it recently and quite successfully, at a similar population and size to Victoria.
As far as "the density isn't there yet", there's also the angle that building high-capacity transit will create it there by skyrocketing the property values near it.
You're right. However, I am unsure why rail requires being held to some standard of economic viability. Roads don't generate revenue; they're bottomless money pits we throw cash into, as well as societal harm in the form of emissions, accidents, drunk driving, and more. They simply don't make "economic sense". Why must rail?
I don't subscribe to neoliberal rationalizations about every single policy decision. Sometimes (often, even) the best policy decisions cannot satisfy economic rationalization.
Roads are a necessity, and already exist. Rail should compete against road expansion beyond basic two lanes and double lane highways.
They don't even do that though, they're very very expensive for the density we have and municipalities further out are not building the density levels that would make them competitive.