Bus Carriers Federation’s heartfelt cry – Revenues reduced to zero

Ontario Northland Transportation bus in Thunder Bay
Ontario Northland Transportation bus in Thunder Bay

MONTREAL – With the complete shutdown of touristic charter coach transportation services caused by COVID-19, Quebec bus carriers along with intercommunity and interprovincial bus lines have experienced the nearly complete decimation of their revenues since the month of March.

There are similar impacts across Canada to what now has the Bus Carriers Federation speaking out to seek help to save their industry. While the summer season normally allows bus companies to generate the majority of their revenues, these companies experienced revenue losses between 80% and 100% compared to 2019.

The Bus Carriers Federation (the Federation) is raising a heartfelt cry as many companies in this key sector for Quebec tourism are on the point of collapsing.

Other bus operations are starting to raise the warning flags. In Northern Ontario, Kasper Transportation based in Thunder Bay has been seeking help from the Ontario Government as the government, which has called the transportation sector an essential service, is deeply concerned over a potential ‘Second Wave’ of COVID-19.

Company CEO Kasper Wabinski says “I have repeatedly reached out directly to Minister Greg Rickford”. The Kenora MPP is the Minister responsible for the Northern Ontario Heritage Fund Corporation. The Minister recently on a Progressive Conservative Party membership call promised to talk with the bus operator, but has apparently not done so yet.

The impact of COVID-19 has seen bus transportation ridership fall.

What is the Federal Transporation Minister Doing?

At the federal level, Minister Marc Garneau holds the Transportation portfolio.

“The COVID-19 pandemic has led to an unprecedented global crisis that has had significant impacts on all aspects of Canada’s transportation industry, on travellers and on our economy. The safety of all Canadians remains our absolute priority and we are reminding Canadians to avoid all non-essential travel,” states a spokesperson for the Minister. “Our Government recognizes that inter-city bus passenger transportation has been hit hard by the pandemic, and recognizes the important work these companies provide Canadians across the country. Our Government has been in touch with these companies affected by this situation. We continue discussions with our provincial counterparts to find solutions and are exploring all options to understand the challenges and help support the industry recover from the impact of COVID-19.”

“We are encouraging companies to take advantage of the measures and programs available for businesses through Canada’s COVID-19 Economic Response Plan.”

The Federation says “Colossal revenue losses threaten the survival of over 160 companies and 4,000 direct employees. Without governmental intervention, the Federation fears that some touristic charter coach carriers will simply not be able to survive until the spring.”

Since March 13, over 70,000 contracts have been cancelled in Quebec alone due to the extended closure of borders and the cancelling of all cultural, sports, and school trips. In total, the financial losses for the industry are estimated at $240M. The government must react quickly to mitigate these impacts.

Strategic services for the entire Quebec economy
The closure of a single company would result in the transportation offer struggling to meet demand. In some regions, this could lead to the complete disappearance of touristic charter coach services and have a domino effect on the economic recovery of many sectors that benefit from the clientele transported by these carriers.

Touristic charter coach transportation supports a number of strategic sectors, including tourism and sports, cultural, and school activities. Group travel contributes to the Canadian economy and allows foreign and Canadian tourists to travel throughout the country.

Urgent and necessary assistance requested
In this unprecedented context, the Federation is requesting financial assistance of $16M from the government to cover their minimum fixed expenses during the next period of forced inactivity from October 1, 2020, to April 1, 2021.

The fixed expenses to be covered by the requested assistance are immeasurable since they ensure the minimal maintenance of the fleet of coach buses and security vehicles. Without this maintenance, the coach buses will not be fit to drive when activities resume.

This request has become necessary since support programs developed by the governments are not easily applicable to touristic charter coach carriers. Indeed, the significant capital assets and the financing structure of the carriers do not allow them the luxury of using programs that require the accumulation of new loans. Moreover, in the context of a complete shutdown of activities, the salary subsidy is insufficient for carriers.

The Federation’s request is consistent with the commitment made in the Throne Speech delivered this week, that the government will introduce “further support for industries that have been the hardest hit, including travel and tourism.” In this sense, the Federation welcomes this commitment.

“Touristic charter coach transportation is crucial for the economic development of every region in Canada. The resumption of leisure, school, cultural, sports, and cruise travel in Quebec and Canada depends on our ability to maintain a large fleet of quality coach buses to meet future demand. For Quebec tour operators and incoming tour operators, active with all these clienteles, the survival of our sector is at stake—a sector already hard hit with losses of 90% compared to 2019. With the necessary assistance, we are ensuring the 2021 season,” states Marilyn Désy, Executive Director of the Receptive Tour Operators and Travel Agencies Association of Quebec.

“Touristic charter coach transportation is very important for the hotel industry. Quebec usually receives thousands of visitors by charter coaches every year. The current health situation is extremely difficult for the industry, but we must plan for the recovery of the economy, when we will need all the industry players to welcome tourists once again,” adds Marjolaine de Sa, Executive Director, Association Hôtelière de la région de Québec.

Ontario Outlook

In Ontario, the ONTC which is under the mandate of Transportation Minister Caroline Mulroney has operated over the past two years with a combined deficit of $160 million. The publically funded company has expanded its routes during COVID-19 and is now competting against private carriers in Northwestern Ontario.

The Minister’s office has not answered repeated questions as to how profitable the ONTC Northern Ontario routes have been. The ONTC started running on the White River to Winnipeg run during the height of the COVID-19 shutdown.

About the Bus Carriers Federation
The Bus Carriers Federation represents over 650 private companies working in all sectors of passenger transportation, including school, intercity, urban, touristic charter coach, paratransit, airport, medical, and subscription transportation.