Intercity bus system faces overhaul

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Greyhound Canada said in 2009 it would withdraw service from Manitoba because it couldn't profit under provincial regulations. (JOHN WOODS / THE CANADIAN PRESS ARCHIVES)

Manitoba is easing its regulatory grip on intercity bus transportation -- a move expected to transform a system that hasn't seen significant change in more than a half century.

Infrastructure and Transportation Minister Steve Ashton said Wednesday he hopes the changes, to be rolled out in the next three months, will make the industry more sustainable in the province.

Ashton said the government will institute a more "flexible" system July 1 that could allow competition on certain bus routes and give smaller carriers and community groups the opportunity to provide service on lines no longer operated by Greyhound.

More details on the new system will be released over the next few months. The government intends to introduce enabling legislation this spring.

"Our goal is to come up with a framework that will maintain as much of the (current) bus service as possible. It's certainly going to be a lot more than what we were looking at in 2009," Ashton said, referring to the crisis that occurred in September of that year when Greyhound Canada announced it was pulling out of Manitoba.

Greyhound is expected to remain a significant player in the province, but the size of its network won't be known for weeks, if not months. Under the new system, Greyhound and other future carriers will be able to withdraw service on any route in Manitoba after giving 90 days notice.

"There's every indication that Greyhound will continue to be a significant part of bus-service provision in Manitoba," Ashton said. "The exact nature of the network will be determined over the next few months."

Change is coming because the old, tightly regulated system, dating back to the 1950s, is no longer working, Ashton said. It required the sole carrier, Greyhound, to use earnings from profitable routes to recoup losses on others. But by 2009, the losses were becoming prohibitive.

Manitoba didn't want to move to a fully deregulated system, in which companies could come and go when they pleased. The worry was big gaps in service would result.

The province is trying to strike a balance between the extremes. There will still be a major carrier offering scheduled service (likely Greyhound, although at least one other player has shown interest in recent months). Smaller companies and community groups will play a role as well. Ashton said the best comparison for what is envisaged is with the national rail system, where a pair of major carriers dominates, but shortline railways play a role on lines the big players have given up.

Manitoba will still insist on scheduled service, so northerners and others can use the bus to get to doctor's appointments. But with 90 days notice, carriers will be able to cease servicing individual routes or leave the province altogether.

"This system is aimed at being flexible enough to allow for entry and exit, and what it may mean is different types of buses, different types of service providers," Ashton said.

The 90-day notice period for service withdrawal will give competitors and affected communities time to step in to fill the gap.

The crisis in 2009 took place because the rules allowed Greyhound to withdraw from the province in a matter of weeks. The system also forced the company to operate unprofitable routes.

After a series of emergency meetings in 2009 between Greyhound and government officials, during which the company opened up its books, Manitoba agreed to the first in what has become a series of subsidies to keep the buses rolling while a permanent solution was worked out. Recently, the province agreed to extend subsidies to Greyhound for another three months (to July 1) at a total cost of $600,000. The last agreement paid the large U.S.-based bus company $3.1 million to operate in Manitoba over the past year.

A spokesman for Greyhound Canada said late Wednesday that the company welcomes the province's decision "to allow flexibility" in the intercity bus transportation system. Timothy Stokes said the company will wait for the government's official announcement before commenting further.

larry.kusch@freepress.mb.ca

Regulation reduced

KEY elements of the new less-regulated intercity bus transport system the province is contemplating:

Scheduled service to be retained;

Carriers will be able to exit service on any route after giving 90 days notice;

Competition between carriers to be allowed on some routes;

Greyhound will continue to provide its existing services during a three-month transition period that ends July 1.

Greyhound will be able to give notice as early as next month to discontinue any route as of July 1.

Small carriers and community groups will have an opportunity to offer service on routes abandoned by Greyhound.

The province will no longer be providing subsidies to private intercity bus carriers as of July 1.

Carriers will be able to vary their prices without applying for permission from the Motor Transport Board. The transport board will still be able to step in if it feels consumers are being gouged.

Greyhound in Manitoba

18

Number of main routes Greyhound has operated in Manitoba, 14 of which have been entirely within the province's boundaries.

293

Total number of intercity bus stops in Manitoba.

$4.78 million

Amount of money Greyhound lost operating in Manitoba between April 2008 and March 2009. In September 2009, the bus company announced it was pulling out of the province.

$268,112

Greyhound's profit hauling passengers and freight between Winnipeg and Thompson, one of its few profitable routes in Manitoba in 2008-09.

-- source: Intercity Bus Service in Manitoba: A Public Discussion Paper

Republished from the Winnipeg Free Press print edition March 15, 2012 A6