Bus service company Greyhound is shutting down its operations in Canada. After having left Western Canada in 2018, it is now permanently ending its remaining routes in Ontario and Quebec.
There are many contributing factors: higher car ownership, ride sharing facilitated by social media, price-competitive air and rail alternatives, and ongoing migration to cities.
Given the potential market gap this departure creates, is there a role for the Crown corporation model to provide safe, affordable, and reliable intercity and rural bus service?
Glen Hodgson poses the question in this Intelligence Memo for the C.D. Howe Institute and lays out the three options:
- Leave it to the market: While there exists some private transportation services that may fill the vacuum left by Greyhound’s departure, there are likely to be gaps in the market coverage where it simply is not profitable to institute regular and frequently available services.
- Offer incentives: Offering fiscal incentives to new or existing service providers to expand to underserved locations has the advantage of relying on the private market and avoiding the need to establish a new government-owned entity with the attendant set-up, resourcing, and operating costs.
- Consider a Crown for intercity bus services: Setting up a Crown corporation to fill existing market gaps would require detailed analysis of market conditions, service options, and financial implications, but may be the only way to guarantee service in some areas.
Busing market gaps occur at the regional level, and therefore any consideration of setting up a Crown should be undertaken by the provinces, Hodgson recommends.
At the very least, provinces should study the issue, he concludes, and determine for themselves the need for setting up their own bus business, assessing the perceived gap against service alternatives and calculating expected fiscal costs.
