Drive Slowly On Subsidies For Rural Bus Service

Commentary, Mary-Jane Bennett, Transportation

Greyhound Canada stunned many in Western Canada with a surprise, summer announcement that it’s pulling its buses out of all four Western provinces. The July 9 statement blames an aging population, urban migration and competition from ultra low-cost airlines like Swoop for the move. The pullout, slated for Oct. 31, is sparking calls for provincial and federal subsidies to keep buses on rural routes. It’s a move backed by some 60 per cent of Canadians, according to pollster Angus Reid.

What is less clear is whether these subsidies—some already in place—will keep rural Canada connected or whether they risk creating headaches of their own.

For now, Western governments appear divided on the question along ideological lines. This spring, NDP governments in B.C. and Alberta began funding rural bus routes. Conservative
governments in Manitoba and Saskatchewan have meanwhile given them a wide berth.

“We do not believe in subsidies,” says Manitoba’s Infrastructure minister Ron Schuler. The province’s Progressive Conservative government would “like to see individuals come forward and put a good business plan together,” says Schuler. A year ago, the right leaning Saskatchewan government shuttered its 70-year-old provincially owned bus company. At the time, the Saskatchewan Transportation Corporation—mandated to serve as much of the province’s vast geography as possible with its yellow and green buses—was burning through $1-million per month in subsidies. The end of Greyhound is simply another sign of “changing times,” says Saskatchewan premier Scott Moe.

In May, when Greyhound pulled its last bus out of Yukon, the territorial government announced it had no intention of launching a bus service: “It doesn’t make sense for us to lose money shipping people south on a bus,” Highways minister Richard Mostyn told the Whitehorse Star. “If there is a business case to be made to do that, business will fill that, because there will be money to be made.”

NDP governments in Alberta and B.C. have however gone a different route. Last week, Alberta Premier Rachel Notley announced that the province is expanding a pilot bus service. Notley announced new routes running between Medicine Hat and Lethbridge and in Red Deer County. That’s on top of existing routes in Camrose, Grande Prairie and Spirit River. In June, B.C. launched a similar pilot bus service, BC Bus North, backed by $2-million in provincial funding.

But Mostyn, Yukon’s highways minister, neatly sums up the problem with flooding the field with subsidies and government-funded bus routes: businesses are already stepping in to fill the void Greyhound is leaving behind. Government’s entry to the market risks squashing the competition or deterring private bus companies from launching.

In 2013, shortly after Greyhound pulled most of its buses off Vancouver Island, the Tofino Bus All Island Express launched, serving 11 Vancouver Island communities. Thunder Bay’s Kasper Transportation has already announced plans to move into Manitoba and Saskatchewan, timed to Greyhound’s pull out. And in Alberta, Red Arrow, a bus line servicing the north-south corridor is looking closely at moving into Greyhound’s former market.

Greyhound, meanwhile, is arguing that B.C.’s decision to fund a northern bus service without opening the contract to public bidding effectively killed its viability in B.C.: “We should have been able to bid on those routes,” Eric Carr, president of Amalgamated Transit Union Local 1374 said, noting the company already had drivers and buses in place to do the work. “We weren’t even given that opportunity.”

Prime Minister Justin Trudeau says his government is leaning towards loan guarantees and start-up funds to help competitors step in where Greyhound will shortly be absent. But the start-ups are mostly focused on mid-sized cities–not the remote, rural communities that will be left high and dry after Greyhound’s departure. It’s hardly clear that bus lines running from Winnipeg to Regina actually need financial support from the federal government.

Originally appeared in the Calgary Herald.