Think Tank Pushes Bus ‘Brokerage’

Frontier Centre, Media Appearances, Transportation, Uncategorized

A new study by the Frontier Centre for Public Policy is urging Saskatchewan's government to convert its subsidized bus company into a brokerage.

As such, the Saskatchewan Transportation Co. would stop operating its own buses, and instead seek private carriers – perhaps "start-up" firms – to take over its routes, using whatever equipment they see fit.

The paper's author, Steve Lafleur, looked at intercity bus service across the country, but particularly closely at Saskatchewan, as it operates the only Crown-owned intercity bus service in the country, with considerable financial data available in its annual reports.

Using that, Lafleur did a comparison of the fare per kilometre between major Canadian routes, assuming a seven-day advance purchase, and contended STC has some of the most expensive service in the country, with a cost of 17.9 cents per kilometre between Saskatoon and Prince Albert and 16.4 cents between Regina and Saskatoon, compared with 13.6 cents between Ottawa and Sudbury, and 10.5 cents between Edmonton and Red Deer.

To compare jurisdictions with medium-sized cities and rural communities, he found data on Montana, which has a brokerage system giving subsidies to private bus operators. He claimed the cost per kilometre between Glendive and Billings was 12 cents per kilometre and 13 cents /km between Miles City and Billings.

In an interview Monday, Lafleur added another benefit of deregulating the intercity bus business would be luring new services into the market, much as emerging American bus giant Mega-bus has entered southern Ontario.

In many cases, new operators bring what's called "curb side" service with special amenities. For example, Lafleur said the privately owned Red Arrow bus service between Edmonton, Calgary and other Alberta cities offers wide "single-row" seats, with Wi-Fi, meals, drinks, satellite radio and stops at only a few high-use points between the two Alberta cities' downtown cores, like airports.

He also singled out for praise a competitive bidding system in the state of Washington that costs less than Saskatchewan spends, but has boosted rural ridership.

Replacing a system where block grants were paid to established operators, it involves identifying rural routes that need to be served, a widely advertised request for proposals, weeding out "frivolous" bids, then giving the subsidy to the firm with the best combination of prices, level of service and the ability to market its services. Some preference is given to local bids, he added.

Lafleur said the idea of competitive bidding for subsidies on unprofitable rural routes was raised in Saskatchewan in 2002, when the province was run by the NDP, whose political ancestor set up STC. But at that time, the assistant deputy minister of highways and transportation said no consideration had been given to this option, Lafleur said. The current transportation minister, Don McMorris, was not available for comment on Monday.

STC operated an executive bus service between downtown hotels in Regina and Saskatoon in the 1980s. But it was cancelled after the government was formed by the pro-free enterprise Progressive Conservatives, which let the rest of STC remain.

STC, which has lately been on an aggressive marketing campaign with discounted fares, has had Wi-Fi on many of its buses for several years.