Ontario Liberals Moving To Deregulate Intercity Buses

It has been the worst kept secret going on several years now, but there is hardly a single bus company in the province that is in favour of the existing regulatory system for Intercity buses. Some have been quietly lobbying for years for the Ontario Government to step in and open up the intercity bus market to competition. The existing regulatory regime routinely rejected applications by other service providers and was a barrier that was impossible to challenge without incurring unsustainable legal and financial costs.

In a presentation to the City of London City Council in 2012 Coach Canada and Pacific Western argued that if there was deregulation they would bring the popular Megabus discount service and the executive-styled Red Arrow brand, currently operating in Alberta, to popular routes to and from London.

At the time, the Provincial Government was opposed to de-regulation on the grounds that competition on routes had to be limited to protect the viability of services being provided to the travelling public as there may only be sufficient ridership to support one service provider. The introduction of a second service provider would therefore jeopardize the viability of both service providers.

Fast forward 4 years to 2016, and there has been a complete change of heart by the Ontario Government on the merits of intercity bus deregulation. Based on submissions it received last year the Ontario Government has recently released its' discussion paper "Intercity Bus Modernization: Creating Opportunities and Connecting Ontario Communities."

According to the discussion paper, the regulations which govern entry into the intercity bus market now pose a challenge to the health of the intercity bus sector in today's changing market. Under the existing regulatory regime Bus companies are granted public vehicle licences which never expire and never have to be renewed. The paper goes on to say "it is this licensing system that MTO is proposing to amend, in order to better ensure that all Ontarians have access to viable modes of intercity bus transportation." The role of the government in a deregulated market will be limited to "ensure that safety and insurance remain the highest priorities for the wellbeing of passengers and operators."

The Ontario Government is hosting a series of public meetings over the summer to discuss the modernization of intercity bus regulation. The date for hearings in Toronto is August 11, Kingston on August 18 and London on August 23. If you can't make it to the hearings you can make submissions online.

Greyhound/FirstGroup have not made any public statements regarding deregulation of intercity buses in Ontario, although in 2011 following the Alberta Government's decision to deregulate intercity buses Greyhound Canada vice-president, Stuart Kendrick, was complimentary of the government's decision and said "The government of Alberta deserves credit for clearing the path to success and creating new opportunities for transportation services to the travelling public,"

In 2009, Greyhound requested annual subsidies worth $15 million from provincial governments and threatened to pull out of northern Ontario and all of Manitoba. Later that year, Greyhound backed off of its threat in Manitoba after the province agreed to pay the company a subsidy to maintain service. Other provinces have refused to pay such subsidies. Greyhound has continued to make cuts, either eliminating routes entirely or by reducing services on existing routes, with the most recent round of cuts taking place in the last quarter of 2015.

In 2006, the last year of operation while under Laidlaw ownership, Greyhound had revenues of $323 million and profits of $15.9 million. In 2007 FirstGroup purchased Laidlaw for $2.8 billion. Following the purchase Greyhound's revenues for 2007 dropped to $300 million and profits declined to $7.7 million. By 2009 Greyhound Canada revenues under FirstGroup ownership had dropped to $287 million and losses had grown to a staggering $13.4 Million.

At the same time as the loses were growing the number of drivers employed by Greyhound in its eastern operations dropped from 290 in September of 2011 to 207 in June of 2016.