Greyhound Canada Plans to Cut Services

Service Cuts in West and Northern Ontario Irk Some, Rile Others

Sep 13, 2009 Angela Browne

On September 6, 2009, Greyhound Canada went public, demanding $15 - $20 million in federal funding to maintain service in Western Canada and Northern Ontario.

Greyhound Canada recently announced that it will be cutting routes in the West and in Northern Ontario after allegedly losing money to discount air and rail travel options. Further, the recession has cut into its business as it has for most other businesses. More controversial is that Greyhound Canada is asking the federal government to shore up its income by approximately $15 - $20 million to help it maintain its existing services to smaller communities and other less profitable routes.

Government Response to Greyhound Demands Lukewarm

John Baird, federal infrastructure and transportation Minister, responded by questioning why Canadians should be propping up a multinational company headed in Texas. However, it does have a Canadian-based operations with Canadian employees. In the past, Greyhound was given access to profitable routes to large cities, allowing it to use the profits from these trips to subsidize the less profitable routes to smaller communities. According to Baird, if Greyhound does not want to operate these other routes, another private carrier can take over. Baird further felt this demand from Greyhound was akin to intimidation and extortion by the major bus company in its bid for federal dollars.

Provincial transportation minister Jim Bradley was equally unimpressive though more low key in his response, first citing he was pleased that notice of service changes were given, but did hope another carrier would come in to fill the void. Greyhound Canada serves over 700 communities across Canada and for many of these communities, it is the only source of transportation for seniors, students and others without access to personal transportation.

By cutting all of these routes, it put major pressure on local municipalities and regions to join Greyhound's call on the government for subsidization, as these communities attempt to respond to complaints by concerned citizens that will no longer be able to access medical treatment, family visits and other types of transportation that was previously provided by Greyhound. Many Northern communities, such as Thunder Bay and Kenora have already made motions and copied them to the federal and provincial governments calling on them to provide the support necessary to maintain this service.

Greyhound Responds to Minister Baird's Reaction to Bid

In response to Baird's comments, Greyhound Canada's vice-president did state:

"It's a little disappointing with respect to being categorized as bullying, heavy-handed and (engaged) in a shakedown. It was disappointing because we met with the federal government (and) Minister (John) Baird several months ago. We were quite up front and open about our situation, about the regulatory structure - that it's broken and needs to be fixed. And we had some short-term solutions."

While it is true that Greyhound Canada is part of Greyhound Lines Inc., it was recently purchased by the First Group, which is based in Britain, and has joined a larger relatively more profitable group of companies. However, the bus service was gradually losing passengers since the 1980's with some restructuring that reversed this trend to subsidize the less profitable routes with its more profitable long-distance tour routes or major inter-city lines. Airlines like Porter in Toronto and in some sections of Ontario, GO Transit, are also becoming major competitors.

Since its announcement, there have been mixed reviews of the issue on talk radio and CBC. While some people feel that Greyhound should have some assistance in dealing with the recessionary impacts on its demand; others commented on how a bus service of this type is not necessary. While political leaders have accused Greyhound of heavy handed tactics to obtain a bail-out, one must ask if this tactic is not dissimilar to the ones employed by General Motors and Chrysler, two other private companies, both also headquartered outside of Canada, to subsidize their production of a product that not everybody needs or uses.

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