Inside Ontario is a weekly roundup of issues prepared by Contributing Editor Kenyon Wallace.

The organization representing Ontario’s private motor coach companies says the contracting out of GO Transit bus services could save the province as much as $50 million per year.

Doug Switzer, president of the Ontario Motor Coach Association, told QP Briefing his group has submitted a proposal to the provincial government highlighting potential cost savings that would come with a partnership with private bus companies that already provide service on many of the same routes covered by GO Transit.

“In a lot of communities, you’ve got a GO bus stop on one side of the road, and a Coach Canada or Greyhound stop on the other side,” Switzer said. “In some ways, many of our members are in competition with GO Transit. What we’re talking about is allowing GO Transit to set schedules, fares and routes but they would contract with a private contractor who would be responsible for operating the buses.”

He noted that private operators tend to have cheaper operations costs, such as lower management overhead and more efficient maintenance facilities. He stressed that any contracting out of services would not impact wages or benefits for drivers, most of whom are already members of transit unions.

“This isn’t about making money on the back of cheap labour. It costs about $120 an hour to run a bus, of which about $25 an hour is the cost of the operator. The savings come in the remaining $95.”

According to a 2009 Conference Board of Canada report on transportation productivity, the public transit sector saw a decline in productivity by 1.2 per cent per year between 1986 and 2006. In contrast, productivity for rail freight grew by 3.6 per cent per year between 1981 and 2006.

The Ministry of Transportation says it is supportive of exploring opportunities for the private motor coach industry to work with Metrolinx, the regional transit authority that oversees GO Transit. Indeed, economist Don Drummond recommended that the province consider alternative service delivery in his exhaustive report to the government earlier this year.

But Bob Nichols, a spokesperson for the ministry of transportation, stressed that there are no immediate plans to contract out existing GO bus services.

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Oversight may be costly:The Environment Ministry says it is concerned it could face pressure over the need for additional resources in light of the federal government’s recent plan to overhaul the environmental assessment process.

As part of last month’s federal budget, the governing Conservatives announced that Canada’s environmental assessment processes would be “streamlined” because the current system is bogged down by duplication and delays. The changes will see environmental oversight for some projects handed to the provinces and the closure of dozens of federal departments.

“While the province is supportive of improving the efficiency of the environmental assessment process, it is important that environmental protection remain the priority throughout this process,” said Kate Jordan, a spokesperson for the Ontario Ministry of the Environment.

“We are also concerned that there may be additional resource implications for Ontario and hope that the federal government will address this, if it is the case. Depending on the specific nature of the federal legislative changes they could affect how provincial reviews and approvals are delivered in Ontario and we will await further details and information from the federal government as it moves forward with the proposed changes.”

Rick Smith, executive director of Environmental Defence, said the plan to overhaul the system may in fact put more power to approve projects in the hands of the provinces, which often don’t have as stringent environmental standards as the federal government.

He pointed to the proposed Prosperity mine project in British Columbia, which was initially approved by the province but cancelled by the federal government. He said the common sense approach would be for the federal government to convene a discussion bamong the provinces and territories in an effort to create a common national standard for environmental assessments.

“It may be too early to tell if there will be resource issues for the provinces, but what the federal government has said is that it wants to stop any of its involvement unless the project is of ‘national scope.’ It’s not yet clear what that means,” Smith told QP Briefing. “It certainly looks like we’re headed toward inconsistencies between the province and the federal government.”

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Craft brewers want more: The chair of the Ontario Craft Brewers says the time has come for the provincial government to consider letting smaller breweries open their own retail outlets to compete with the Beer Store and the LCBO.

Gary McMullen, who is also founder of Muskoka Brewery, argues that current rules surrounding the sale of beer in the province mean craft brewers are always fighting for shelf space in the Beer Store – a private company owned by Ontario’s three largest brewers, Labatt, Molson and Seeman – and the LCBO.

“There are all kinds of private retailing options,” McMullen told QP Briefing. “The one that makes sense to craft brewers is if we can’t work in the context of the current system, why not add competition and let us have our own stores as well? We’d be happy to sell other people’s beers and they would pay a listing fee just as we pay one for the Beer Store.”

Craft beers are slowly increasing their market share in Ontario. Last year, craft beer sales were up almost 45 per cent over the previous year, with $22 million in sales. But that still only represents about four per cent of total beer sales in the province.

Ministry of Finance spokesperson Scott Blodgett said any new outlet would not be able to sell only Ontario craft beer because of current trade agreements. Government approval also would be required for any such stores.

“Small and craft brewers enjoy economies of scale through the current retail system,” Blodgett said. “The costs of operating this smaller retail channel could be prohibitive for small brewers.”

He noted that the LCBO continues to be a highly successful sales channel for craft breweries.

“Ontarians have access to beverage alcohol at more than 1,700 retail outlets, including over 600 LCBO stores, The Beer Store, winery retail stores, rural agency stores, and at wineries and breweries,” Blodgett said. “The current system offers a wide range of products at competitive prices, promotes Ontario wines, beers and spirits and encourages responsible reuse and recycling.”

Can GO costs be slashed?

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