The government is working under the radar to revise and modernize the regulations for intercity bus travel in Ontario, industry players say.

And the debate looks much like the arguments over deregulation in other transporation industries in decades past, whether that was trucking or airlines: What the industry wants to see at the end depends very much on which part of the industry you speak to.

Currently, intercity bus travel is regulated by the Ontario Highway Transportation Board, created in 1955. Any company wishing to offer scheduled bus service in Ontario has to demonstrate "public benefit" and "public convenience", but any incumbent service provider can oppose an application in which case it goes to a hearing before the Board. Public benefit and convenience does not include lower prices, meaning one of the most obvious benefits to public competition is ruled out of the process.

In one corner you've got the 800-pound gorilla of Ontario's intercity bus market, Greyhound Canada. Stuart Kendrick, senior vice-president at Greyhound, says there's a push to deregulate Ontario's intercity bus lines coming from smaller players in the market, such as Coach Canada-owned Megabus. But Kendrick warns the experience of deregulation in Alberta in 2011--the only large province in Canada that has substantially liberalized its regulations of routes and fares--was a disaster for small and rural communities.

"When Alberta deregulated, more than 160 communities lost service. There was plenty of new competition on the densest corridors between Calgary and Edmonton, but there were no subsidies paid out by the government and rural communities lost service," says Kendrick. Some of those communities, of course, saw their service cut by Kendrick's own company.

In the other corner, you've got Coach Canada President John Emberson, who says the Alberta experience actually shows the market can work without the style of government regulation Ontario has.

"I think [liberalization] will help rural areas. When you look at the Alberta experience, when some of the largest companies leave a market other companies come in to serve them instead," says Emberson. "Alberta developed a hub-and-spoke model to replace rural coverage instead."

Trent Bancarz, spokesperson for the Alberta Ministry of Transportation, broadly agreed with Emberson's assessment of his government's policy.

"I don't know if it was as many as that. Some communities lost Greyhound service, but that's not the same as losing bus service altogether," said Bancarz. He also praised Alberta's smaller bus companies for creating a single-ticket system so that while a passenger might start their journey on one company's bus and and end on another, they only have to deal with one ticket.

Though he called the liberalization a success, Bancarz conceded some areas of the province that had been served in the old system of regulation did lose service that hasn't since been replaced. He also said the government of Alberta does not track price information and cannot say whether "success" includes lower prices for consumers. Bancarz calls it a success because new bus companies have entered the market.

Intercity bus travel has been an issue in Ontario since at least 2010 when Greyhound cut service to some areas in northern Ontario following drops in ridership after the recession started. More recently, Greyhound announced cuts to Cornwall, an issue that came up when Premier Kathleen Wynne faced municipal officials at the Association of Municipalities of Ontario annual meeting in Ottawa this past August.

Wynne was asked by Elaine MacDonald, councillor for Cornwall, what the province is doing to keep bus and rail companies serving small communities.

"The short answer on coach lines is this is something that has concerned me since I was minister of transportation," Wynne answered. "During my leadership run I said we would look at re-regulating the coach industry because there are definite problems with the ability of coach lines to diversify and innovate. I know the minister of transportation is in the process of looking at how we re-regulate."

Transportation Minister Glen Murray told QP Briefing in an email "We are in quite in depth consultations through the ministry with all of the stakeholder groups, and we are working with them to set both the content and the time frame for addressing the issues that the industry has been raising."

"The goal of the process is to have an affordable, sustainable inter-city coach service that meets the needs of Ontarians from Kenora to Cornwall. We have some more work to do with the industry and work is continuing."

Murray's office declined to state when the consultations would be complete, or if the OHTB is expected to retain its regulation of competition in the market.

Coach Canada's Emberson says he's been encouraged by the process with the minister, and the premier in her previous role, and is hopeful to see Ontario's coach industry become more dynamic and competitive.

"The current premier and her cabinet seem to be looking at this very strongly," says Emberson. "We're working on it, though I couldn't tell you how close it is."

Greyhounds' Kendrick has a different request from the government: Stop eroding his company's business with expanded GO service--or at least, give Greyhound some warning so the company can adapt.

"Obviously GO has a social mandate to provide commuter service in Ontario, we don't disagree with that," he says. "Our message to the government is the private sector is there already, they don't need to expand in areas where we already operate."

The 2010 Intercity Bus Services Task Force composed of provincial and federal deputy ministers recommended in its final report that provinces relax their regulation of intercity bus travel but fell short of endorsing full deregulation. Instead, the report endorsed a "reverse onus" model where (in contrast to the current Ontario system) an incumbent provider would have to prove why a new competitor should be barred from offering service.

The United States has seen a sharp rise in service from "curbside buses", which eschew traditional urban bus terminals. Curbside operators in the US grew their service 30 per cent between 2011 and 2012, according to research from Depaul University in Chicago. The increase in service has been attributed to everything from lower prices to amenities such as on-board electricity and wireless internet.

In response to competition from upstart bus lines, Greyhound and other large incumbents have followed by introducing similar amenities.

Emberson says this is exactly what the market should be doing, and that Ontario should allow more of.

"That's the advantage of competition. If you want people to ride your bus, you have to provide the amenities. That can be wi-fi, or it can be a lower price."

Province pondering bus rules

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