Few years ago this was discussed. There government went to an open bid, leaving the routing completely open in the hopes that one of the large rail operators might be interested in partnering on a solution like this. They weren't interested. And expropriating a primary corridor from two of the largest freight rail operators in the world and anchors from the economy is probably not a low risk option. God only knows how long that court fight would go. And after all that? You still may not get the geometry you need and now you have to expropriate in even more populated areas and do even more grade separation. It's not a clear cut easy solution.
The corridor at play is the CN Kingston Subdivision. No clue what its market value would be beyond 'a lot', and the government (which used to own CN, didn't want to so sold it, and probably doesn't want to again) would still have to give freight priority so they don't start crippling the economy. There
might be a degree of improvement in VIA's on-time performance by removing some of the animosity CN has to being a landlord railway, but I'm not sure it would make much difference. As you say, the corridor limits potential speeds, both in terms of alignment and grade, but also factors such as turnout (switch) speeds and level crossings. Once you get about a certain speed, at-grade crossings are not allowed.
there is a ridiculous amount of decommissioned rail lines in canada, make the trains electric, set up a couple SMR to power the network and you would have cheap operating, hell, lets put it all underground to take weather out of the factor. It would be expensive as hell but imagine how much would be made if you say drilled through the mountains from calgary, went to Kelowna, then to Vancouver. could probably be in Vancouver in about 6h, less if you exceed 100km/h in a closed system
The problem with old right-of-ways is most are over a century old and built to accommodate track speeds of that era. Many, particularly in and around urban areas, have been built over, either completely or to the extent that you are back into the mass expropriation problem. The ones that were built into the rural areas served an economy and doesn't exist anymore.
An question that I have never clearly understood is whether railway actually own the land they sit on or just have a permanent easement from the government while it is operating. They are arguments supporting both sides. I assume those really close to the game know.
Boring through the mountains; yes, a completely different discussion.
Other than urban transit rail, which is still subsidized, I'm not aware of a rail line that stands on its own solely on passenger revenue.