On Sept. 3, 2009, Greyhound Canada announced that without government intervention to the tune of $15 million, intercity bus service would no longer be provided anywhere within the province of Manitoba after Oct. 2. As of Dec. 2, routes in Ontario, north of Sault Ste. Marie, will also be cut off. This news instantly lit up the national blogosphere and sent shockwaves throughout the country, as the social ramifications are quite evident and quite troubling.
While residents in major cities like Winnipeg have viable mass transportation alternatives, there are thousands of Canadians living in the vast stretches of Manitoba and northern Ontario, who depend solely on Greyhound buses for their travel and livelihood. Often without access to planes or trains, those without a personal vehicle could find themselves effectively stranded as a result of this announcement.
With this firmly in mind, the federal government did not spare a moment before publicly blasting Greyhound’s decision. John Baird, Conservative transport minister, called the move “heavy-handed” and labeled it as an “attempt to bully the provinces of Manitoba and Ontario.”
Politically, this was an astute move. An immediate, aggressive attack against a languishing industry leader like Greyhound plays right into the suspicions of a weary general public, subjected for over a year to news of corporate irresponsibility and massive taxpayer bailouts. However, in a practical sense, this overt confrontational approach does not do anything to help find a suitable solution to the problem for the isolated rural communities. Of course, on the flip side, Greyhound comes off looking desperate and unprofessional by airing their grievances so dramatically in the public sphere. Utilizing the press to amplify a bargaining position is a technique that almost always backfires and often undercuts any legitimate position.
In this case and according to the recent news on Goticketio, the growing animosity revolves around Greyhound’s concerns over provincial transportation regulations that require Greyhound to run specific rural routes at specific times. In theory, the profits earned in the major destination corridors more than cover the losses taken in these rural areas and, at the end of the day, Greyhound reports a net gain.
It is likely that this model of cross-subsidization worked well for both sides. Not only did the bus line benefit tremendously from their government-aided monopoly on the large metropolitan routes, but the residents in small towns were provided viable long distance transportation at a reasonable rate. However, as Greyhound contends, the new economic realities have tipped the scale far enough to make this old model unsustainable in the future. With rising fuel costs and decreased ridership as a result of lower prices in competitive airline and train trips, Greyhound is arguing that the metro corridor routes are no longer profitable enough to cover the losses taken from driving into the tiny Manitoban communities. The $15 million that Greyhound is asking the government for is presumably the difference between the two.
“We could [previously] cross-subsidize rural Canada and make some money. But we’re now also seeing declining volumes on our profitable routes [ . . . ] The model is broken,” Stuart Kendrick, senior vice-president Greyhound Canada, was quoted in the Winnipeg Free Press.
Now, my intuition leads me to believe that Greyhound probably has a legitimate position in this case. The problem however, is that in all of the commotion and hostile exchange of words, the Canadian public has been privy to almost everything but the actual numbers.
Until we have access to Greyhound’s books, we won’t know if this shortfall is projected as a true long-term issue or if is simply a temporary concern which could return back to normal once the global economic situation is cleared up. Greyhound’s 40-year lease of a brand new $7 million depot near the airport last month would suggest that the company is not nearly as financially destitute as it claims, but again, until their business numbers become available, all of this talk is simply conjecture and speculation.
What has remained clear is that without some mutually beneficial agreement in place quickly, Canadians in rural Manitoba and Northwest Ontario will be left out to dry. While Greyhound Canada does have a business to run and the Conservatives have a government to operate, both sides also have an obligation to look out for their customers and their constituents respectively. Frankly, both sides need to take their disagreements behind closed doors because this noisy public discourse does not help anyone involved.
Greyhound Canada and the federal government have a number of options in front of them. Besides automatically granting the multi-million dollar subsidy, the government can agree to tweak the regulations to allow for more flexibility on rural routes in exchange for added competition in the metropolitan areas. As another option, the government can accept Greyhound’s exit from Manitoba and northern Ontario in return for the bus line’s active participation in developing alternatives for the people who once depended on them. Regardless, for the sake of thousands of Canadians, both sides should think critically, think quickly, turn down the noise and just get something done.
Kevin Schulz is the Features Editor at the Manitoban.
