Proceedings of the Standing Senate Committee on
Transport and Communications
Issue 26 - Evidence (afternoon session)
TORONTO, Thursday, March 28, 2002
The Standing Senate Committee on Transport and Communications met this day at 1:35 p.m. to examine issues facing the intercity busing industry.
Senator Lise Bacon (Chairman) in the Chair.
The Chairman: Honourable senators, we are pleased this afternoon to hear from Mr. Stephen Little, Chair of the Advisory Committee on Accessible Transportation.
Mr. Stephen Little, Chair, Advisory Committee on Accessible Transportation: I am pleased to be able to make this presentation to the committee this afternoon. The subject of intercity bus transportation and its role in the national transportation grid is an important topic and very worthy of Senate reflection.
I will begin by explaining a little about the Advisory Committee on Accessible Transportation, or ACAT, as it is affectionately known.
As its name implies, it is an advisory committee that reports to the federal Minister of Transport. It has been in existence in its present form since 1991. ACAT has representation from the industry side as well as the ``consumer'' side.
Its role is to provide advice to the minister on matters pertaining to accessible transportation. ACAT is an excellent forum to debate ideas and solutions to many issues, ranging from voluntary codes for federally regulated transportation modalities to photo-identification requirements and their impact on persons with disabilities. Topical issues such as VIA Rail's purchase of new rolling stock are discussed, and research on various aspects of travel by persons with disabilities is also reported and integrated into our deliberations. In addition, representatives from provincial regulators and the Canadian Transportation Agency attend our meetings to contribute updates on their activities that impact on the disabled community.
All of the information and discussion form the basis for resolutions that are prepared and presented to the minister by two representatives from ACAT, traditionally one from the industry side and one from the consumer side. The chair of ACAT is also traditionally a representative from the consumer side.
Consequently, this is not an official presentation by ACAT, since we have not had time to debate and vet the text with the various member organizations, although I did run it by the representatives from the bus industry, and certainly the disabled community, so they are aware of what is being said here.
My remarks are my characterization of the discussion that ACAT has had on this subject. The purpose of my presentation is to remind the committee members that intercity busing is critical to the well-being and social integration of persons with disabilities.
The goals of the disabled community must be reconciled with the needs of the bus industry in such a way that solutions produce a sense of accomplishment and progress for all the parties involved, including the regulators.
You have already heard about the importance of bus travel in Canada and that this mode of transportation is experiencing some challenges with ridership and profitability.
I have read some testimony about the difficulty of travelling from one urban centre to another on the bus, as well as the apparent reduction in service to rural Canada and the smaller urban centres. It is important to realize that persons with disabilities live everywhere in Canada and that disability cuts through all the demographic categories of age, gender, socio-economic status, education and so on.
Where and how services are provided, including employment opportunities, has a major impact on where persons with disabilities live. It is no surprise to see that urban areas are growing in Canada and that persons with disabilities tend to gravitate to urban centres for access to better opportunities, be it for employment, various services or social reasons.
Travel by bus has become an increasingly important way for persons with disabilities to travel from one location to another. In larger urban areas, transit services do not yet provide a satisfactory level of service to meet the demand from persons with disabilities.
For inter-urban bus service, the problem is twofold; lack of service to many communities and poor accessibility where it does exist.
If trends continue, whole communities will be marginalized through lack of transportation service, and whole segments of society, namely persons with disabilities, will also be marginalized by either poor service or no service at all.
Rail and air modes have not been any kinder to the traveller with a disability. The rationalization of profit in these sectors has had a detrimental impact on overall service levels that has affected everyone, particularly the disabled.
Many consumers are facing two choices vis-à-vis their transportation needs; use of a personal vehicle or stay at home. For many persons with disabilities, staying at home is often the only affordable solution. Depending on the kindness of family members, relatives and strangers to meet your transportation needs only goes so far in building or reinforcing one's self image as an independent contributor to society.
More viable transportation options are needed. Improved rail and bus seem to offer the best options, but these are not without challenges.
The bus industry is trying very hard to address the needs of the disabled traveller. They are making important commitments to improving both the vehicles and the quality of the service they provide. Their concerns about the challenges of deregulation have been well articulated.
The industry also has concerns about what is expected of them in improving the transportation grid in Canada. Their motivation is the attainment of a reasonable level of profitability through the delivery of a service. If the service cannot break even or make a profit, sound business practice would dictate that it be discontinued.
Many unprofitable routes are subsidized by a company's profitable routes, and thus begins the delicate balancing act of overall profitability. Diversification enters the picture, but here again the options are limited.
If regulators and governments were serious about improving the bus industry's capacity to service more communities, a system of subsidies would have to be considered. This option is fraught with challenges, but innovative solutions are possible through dialogue with regulators, the industry and the service users. As an example, rural residents in Quebec can have their medical appointments grouped to enable one economically viable trip to the CLSC instead of multiple, unprofitable trips.
The fragmentation of the industry will make subsidy decisions more challenging than with rail, but if there is a will, there is a way.
Bus companies operating within one jurisdiction have fewer regulatory challenges than those travelling regularly between multiple jurisdictions. Consistency in regulations across the country has to be balanced with the rights and obligations of the various regulators.
In terms of the human aspect of delivering services, the bus industry has already profited from the support of the federal government and its agencies through a training resource prepared for them that shows how best to serve travellers who have a disability. Supportive initiatives such as this must be maintained. Indeed, regulators should not be afraid to tackle even bigger issues to make travel by bus something that all Canadians can experience and enjoy.
The big concern for persons with a disability is to make sure that a trip by any mode of transportation from point A to point B is as seamless and accommodating as possible. This is not as easy as it sounds because there are many challenges that can be either minor inconveniences or insurmountable obstacles, and which vary, depending on the disability.
Over the years, much attention has been given to the traveller with a mobility impairment, be it a wheelchair user or someone who requires a cane and good walking surfaces. The level of personal assistance they require can also vary enormously. The needs of this traveller are different from the needs of a traveller with a sensory impairment. A blind person has different communication needs from one who is deaf or hard of hearing, yet the solutions are not expensive if forethought is given to the needs of the disabled traveller. Proper signage goes a long way toward helping everyone, not just the traveller with a disability. Adopting so-called ``universal'' design standards would mean that announcements in bus terminals, or even on board the bus, would be not only verbal, but visual too. Designs that enable a wheelchair user to move about the terminal and to access its facilities also means that parents with young children in strollers can do the same.
Delivering a service to the public is demanding. Delivering it on a consistent basis is extremely demanding. Factor in the frustrations that are inherent in the transportation industry in general, such as weather and traveller fatigue, and you have a recipe for frequently producing negative experiences for those with a disability.
Despite ongoing training by the industry, there is always an employee who does not know the answer to some of the basic questions that the disabled traveller may have. A properly trained and sensitive employee can go a long way toward making a challenging situation more tolerable for the disabled traveller who encounters some difficulties.
When I spoke earlier of a seamless trip, showing your ticket at the bus station is not the beginning of the trip for the traveller, nor is arriving at the bus station at the other end the conclusion. It starts with a decision to take a trip.
Dissemination of information about purchasing a ticket has to address the needs of the disabled traveller. Getting to the bus station is another challenge for some. Booking a transit ride or using the transit service can be next to impossible. Finding a parking spot, or even a drop-off zone, can add frustration before the bus trip has even begun.
The bus itself can be a challenging environment for the person with a disability. The industry has developed some solutions to provide for dignified access and egress for the mobility-impaired traveller, but here again, there is a delicate balance between what is profitable and what is possible.
Bus journeys sometimes include stops at various community bus stops that are not accessible, not just in physical terms, but also in relation to the menus, announcements and other details that contribute to a pleasant trip.
The operators say this is not part of their responsibility, but the passenger does not see where the responsibility of the operator ends and where it resumes. If it has something to do with the bus trip, most travellers assume it is the operator's responsibility.
The point is that during any given journey, the traveller will be subjected to many different jurisdictions whose standards and regulations can produce varying levels of accommodation. All regulators must think from the perspective of a seamless journey when deciding the best way to regulate the industry.
At its upcoming meeting in April, ACAT will be reviewing a draft report that assesses the application of the voluntary code that the bus industry uses in providing services to persons with disabilities. ACAT has also heard that the delegation of regulatory authority to the provinces has resulted in some inconsistencies in how travellers with disabilities are serviced.
In addition, we are aware of a lack of federal funding for projects and innovations that address accessibility needs for the industry and their consumers. We recently made a recommendation to ensure full and adequate funding for the Transportation Development Centre.
It should be noted that the Canadian Transportation Agency prepared a report in 1992 entitled ``The Road to Accessibility'' that still makes sense in today's context. I would urge this committee to review the report's recommendations that apply to intercity bus service.
Finally, in this era of population migration, amalgamations and international pollution protocols, there is a strong, insistent voice from the community of persons with disabilities demanding that its rights to transportation services be respected.
If there is a movement to deregulate, make sure that the service standards and accountability mechanisms are in place to enable the customer with a disability to travel with dignity. If the bus industry says it needs help to maintain, improve and expand its services, regulators and government should listen and try to understand. If the disabled community wants to be a partner in promoting change and bringing about improvements, it should be enlisted to do so.
We all have an interest in making sure that there are viable transportation options within our society. Social and economic isolation should not be allowed to take root in 21st century Canada. With your report on the intercity bus industry, I am hopeful that the impetus for improvement, change and innovation will continue.
The Chairman: Mr. Little, would you say that bus service for those with disabilities has improved significantly in the last 10 years?
Mr. Little: I would not say it has improved significantly, and I put the emphasis on ``significantly.''
Certainly, the last 10 years have seen a slow expansion of accessibility to services, but not to the necessary extent in the existing fleet. You heard testimony this morning from Ontario Northland that 4 out of its 23 buses are deemed ``accessible.'' That is the rolling stock itself.
When you look at how their services are provided, for example, for making reservations and just general customer service, it is difficult to measure.
Certainly in the last 10 years, the industry has taken on the responsibility of doing ongoing training. I would not say there has been significant progress, but it is moving in a positive direction.
The Chairman: What, in your opinion, are the major issues yet to be addressed?
Mr. Little: It probably breaks down into two main areas. One is customer service, where sensitivity to travellers with a disability is not necessarily present.
Most people have a basic understanding of how to interact with an individual who has a mobility impairment, but are inconsistent in how they respond to a customer who is either deaf or hard of hearing or blind, simply because they may not have the tools with which to accommodate that person. That makes the job doubly difficult.
We need to focus on the area of service delivery and maintain a lot of pressure, because there is turnover, as there is in any other service-oriented industry, and it is difficult to make sure that everybody is up on the latest issues in dealing with disability.
The second one is the accessibility of the ``hardware,'' if you will — the buses, the facilities and the terminal. As I said in my presentation, many of us have difficulty making sense of announcements in a bus terminal, let alone a person who is deaf or hard of hearing.
There are simple solutions to address that, but they have to be incorporated into the overall thinking of the company in relation to customer service. It is a continuum. You cannot just say, ``We will put up a visual sign to repeat the verbal announcements.'' People have to know where to look for the sign. It is all interrelated.
The Chairman: Do you feel that people with disabilities in small communities or rural areas are well served?
Mr. Little: If the rural community or the smaller urban centre happens to be on a transit point between two major urban areas, chances are they will have some degree of service. As our friends from Ontario Northland pointed out, you will be able to get an accessible bus to roll by the local bus stop within 48 hours.
I realize that given the enormous road network out there and the fact that 50 per cent of Canadians still live in a rural or a semi-rural environment, every place cannot be serviced by this particular mode of transportation.
I would say that the bus companies are making an effort to reach areas where there are pockets of customers, but at some point, they have to decide whether this is economically viable for them.
I know that the service has been discontinued in some instances, or people now have to travel farther to access it. By and large, rural Canada is probably not as well served as it could be, given the issues in the industry.
The Chairman: Are the differences between the provincial bus regimes that have developed over the last decade detrimental to the travelling public?
Mr. Little: Speaking more from the disabled person's perspective, it does have a detrimental impact because if there is a lack of accommodation or a service breakdown, people often do not know where the accountability lies. They do not know if it is within the jurisdiction of the provincial regulator. They do not know if they should go to Transport Canada or to CTA or wherever. In the end, they can only rely on the code of practice, in which the bus industry itself has said, ``We will follow these rules.''
The provincial regulators really have an interest in safety. I understand that Quebec has perhaps the highest safety standards, given some serious accidents that they have experienced.
They have responded, and that poses some challenges to intercity buses that cross into Quebec from New Brunswick or Ontario or wherever.
I do not think that meeting a high standard of safety should have a detrimental impact on the operator. What is safe in the strictest jurisdiction should be safe in one that has less stringent requirements.
When confronted with inconsistencies, a person with a disability simply does not know what is required by the regulator versus what is self-imposed by the bus industry, and has no idea where to go to get satisfaction.
The Chairman: Should the van system that is used in Nova Scotia or P.E.I. be considered for people with disabilities?
Mr. Little: Vans have been used in the past to provide local transit services, and it was a satisfactory way of getting people within an urban environment from point A to point B. I am talking about cities such as Calgary or even Toronto.
I think it would be possible to use vans to provide service on a regional basis. Certainly the vans can be made accessible, and I am not talking just about the 8- or 10-seat passenger vans. In some instances, the 14- or 20-seat vehicles can be used. Those can all be modified to provide lift access for the mobility-impaired traveller.
Accommodation for the traveller who has a sensory impairment can be made in any size of vehicle. Customer service also applies to any size of vehicle.
We do not all expect to be carried from point A to point B in a large bus when the operator can provide a safe and reliable service with something smaller.
The Chairman: What role do you think the federal government should play in implementing some rules — I would not say ``regulations'' — to apply to various carriers?
Mr. Little: I think that is important. As I heard somebody from Coach Canada say this morning, the federal government has historically played a role in the bus industry to some degree. I think that it would be in order for them to make sure that overall service delivery to persons with disabilities meets a specific standard and that there are specific mechanisms in place to respond to inadequacies.
This is not to say that we should have the lowest common denominator, such as we have with the National Building Code. We should adopt the level at which the disabled community feels it should be set.
The industry itself negotiated the intercity bus code of practice with the disabled community and has said that it will live up to the expectations noted in it. It may be that the disabled community will say, ``Gosh, it would really be nice to have 24 hours' notice on the availability of an accessible vehicle versus 48.'' A compromise may be reached at 36. Most people tend to make travel reservations a little in advance anyway. I think the federal government can play a role in establishing standards that apply no matter who the regulator is.
Senator Gustafson: I just have one question, Mr. Little, which goes right to the core of why we are here.
You say if there is movement to deregulate, we should make sure the service standards and accountability mechanisms are in place to enable the customer with a disability to travel with dignity.
I take from that that you are not really taking a position on whether to deregulate or not. The important thing is that service is provided and that it continues to improve. Am I right?
Mr. Little: That would be a correct interpretation, senator. Certainly in the case of the airlines, the marine service and rail, the responsibility to provide a service has been shifted from one sort of jurisdiction or agency to another, be it federal or local. What seem to have gotten lost in the issue of provincial downloading onto the municipalities are the standards relating to persons with disabilities.
Some municipalities or jurisdictions take up the challenge and respond to that issue, but many are slow to do so. In the meantime, the disabled community is left in a situation where they have to fight to keep what was gained. It is unfortunate.
Senator Gustafson: I am sure that you have outlined things that all Canadians would want to see in regard to transportation, although that is not to say that there are no difficulties in that.
Mr. Little: Yes. I made another point in the brief about the universal design standards. These are not barrier-free design standards, but they do make sure that features incorporated into whatever, be it a hotel or a transportation service, are to the advantage of the most people possible, rather than catering to sort of a strict demographic. This is more and more becoming the norm, to the point where I think even the City of Winnipeg and the airport have worked cooperatively to implement universal design standards.
Some will say it is more complicated in the bus industry. Others will say, ``What is the big problem? You have terminals and you have buses. Make it happen.'' The fact is, they have to think about it. If they make it part of their management goals, I think that it can be accomplished.
Senator Adams: When we were in Calgary, we saw a new bus set up for wheelchairs. I think it cost about an extra $30,000 to equip a bus to accommodate wheelchairs and install a bathroom facility. Should the Canadian government subsidize the industry to provide equipment of this sort on a bus?
Mr. Little: When I raised this issue with my colleagues in the bus industry, they were very quick to point out that the only way that they can finance anything — anything is possible in relation to a vehicle — is out of the ``fare box.'' If they felt that there was enough demand to justify it being taken from the fare box, then it would be done fairly quickly as they replace or modify the rolling stock.
They also pointed out that unlike other modes of transportation, they did not receive subsidies to help make this happen and felt hard done by. To their credit, they have still taken up the challenge of making some accommodations in relation to access to and egress from the bus.
However, they are also pointing out that, realistically, if you want to accommodate an individual in a wheelchair on a 45- or 54-seat bus, in some cases you are talking about removing up to four seats from service. Those are four seats that might otherwise have been sold to fare-paying passengers.
One could argue that unlike airplanes, not all the buses are full all the time, and therefore it is a bit of a red herring to raise that issue. However, they look at the seat capacity on any given bus and say, ``In order for us to make this a profitable route, we have to be able to sell X percentage of these seats, and if you take away four seats to accommodate one person, this is a factor that has to be taken into account.''
On the other hand, design innovations such as might come out of the Transportation Development Centre could minimize seat removal. Improving the technology to provide access to and from the bus could bring costs down and benefit everybody.
I hesitate to say that government should be paying directly for these types of things, because many of my friends in the disabled community will say that this is an obligation on the part of the service provider. We do not subsidize people to make their corner stores accessible. Why should we do so for the bus industry?
Others will argue that buses and corner stores are two different things and that there are innovative ways to provide support to the industry, be it through tax relief or whatever.
I think that there are a number of solutions that could be developed if you posed a specific question and solicited some responses from knowledgeable people.
Senator Adams: What about a blind person wanting to travel with a seeing-eye dog? Right now, there are no bus regulations. Something like that would mean that a blind person would not be able to bring the dog onto the bus.
Mr. Little: Guide dogs and service dogs are now being carried by the bus industry without charge. Depending on the level of knowledge of the particular bus driver or the person at the counter, they may say, ``No problem. Go right ahead,'' and know exactly what to do. Or there may be somebody who says, ``Gosh. I do not know if we are allowed to bring an animal on board. We will have to put it in a cage and put it down below.'' However, most people are fairly insistent and say, ``No. The dog travels with me,'' and 99 per cent of the time, it is not an issue at all.
Senator Adams: Yes. I am concerned about the same thing.
I live in the Arctic. In medical emergencies, patients will be flown out on a commercial airliner. If they are on a stretcher, they may take up five or six seats and the airline will charge for those seats.
Mr. Little: That is right.
Senator Adams: I do not know how that would work with respect to buses.
Red Arrow has a new bus equipped with blinds on the windows and a sign in Braille. It was interesting to see that. Are services for the disabled very costly?
Mr. Little: Many of the accommodations, particularly for sensory impairment, are really minimal. It is just a matter of being able to think it through and positioning things properly.
The greatest attention is paid to travellers with a mobility impairment, because they are usually individuals like myself, in a wheelchair. Methods of addressing their needs have improved steadily.
I remember taking a bus in Saskatchewan where I was physically lifted from the ground up to my seat. That is not a realistic option for many people because they may have to get off between Point A and Point B and the bus driver cannot do alone what two people did.
It has improved a lot over the years, although it has definitely been a challenge.
Senator Maheu: I thoroughly enjoyed your presentation, Mr. Little. It opened my eyes to a lot of things.
I have to say that as far as I am concerned, it took a couple of very serious accidents for the safety issue to be dealt with in a proper manner in Quebec.
Have you seen that type of improvement on safety issues in other provinces?
Mr. Little: I must admit not as dramatically as in Quebec. I do not follow the detailed operations of the bus industry as it relates safety, but my understanding is that the standard has been consistently improving.
My concern is, where does the traveller with a disability fit into these standards that are being implemented? Unfortunately, as I was saying before, there is some inequality or unevenness.
Senator Maheu: I can understand where you are coming from. In your consultations with the different groups across the country, is it their view that the availability of public or semi-public transport is adequate? I am not talking about adapted facilities now.
Mr. Little: As I mentioned in my presentation, one of the topics for our meeting next week in Ottawa is a review of a report on the application of the intercity bus code of practice. I am unable to circulate it in this particular forum because it has not been officially presented to the minister, but I can tell you, on the basis of one of the charts that I saw, that there is a fairly high level of satisfaction. I believe 60 to 70 per cent of the people with disabilities who were interviewed expressed satisfaction with the service that they received.
The remainder did describe specific complaints, and a lot had to do with either the insensitivity of employees or the lack of accommodation of their particular disability. I am thinking particularly of those with sensory impairments, where announcements on the bus or in the terminal were only made verbally, without any recognition that some people have other communication requirements.
As soon as the report has gone to the minister, I think it would be important for this committee to at least look at it, because it will be revealing of how the disabled community that was surveyed views the intercity bus industry and its adherence to its own code.
Senator Maheu: Could you tell us a little about the Transportation Development Centre? What is its raison d'être, its function?
Mr. Little: It is based in Montreal, and as its name implies, was a creature of the Department of Transport. Its purpose was to develop some projects or prototypes that responded to the needs of the disabled traveller, although not exclusively.
If the industry expressed a particular need for something, they were able to persuade the Transportation Development Centre to research what would be involved and develop a prototype, be it an aircraft boarding chair or a bus loading system. They also conducted general surveys on needs and the current state of affairs. It was really a think tank/research group that tackled specific problems.
About 10 years ago, they undertook to respond to the need for portable hand controls to make rental cars safe. They enlisted the help of the Canadian Standards Association in developing a standard for portable hand controls that were used by car rental companies at airports that had an obligation to accommodate persons with disabilities.
There had been a complaint that some hand controls fell apart while the person was driving, and so they responded to that particular challenge. In the same way, they responded to the need for a device to facilitate the boarding of a small aircraft, a Dash-8 or something like that, and came up with a working model that proved to be effective. That is their relationship with the industry and with consumers.
The Chairman: We thank you very much, Mr. Little, for your presence here. If you have any documents or information with which you can supply us, we would be pleased to receive them.
Senators, our next witnesses are from the Ontario Motor Coach Association.
Mr. David Carroll, Director of Safety & Maintenance, Ontario Motor Coach Association: Honourable senators, we appreciate the opportunity to address the Standing Senate Committee on Transport and Communications. We cannot overstate the significance of the study that you have undertaken, as we feel the industry, the Canadian public and the environment will benefit from government measures to encourage increased intercity bus ridership.
Mr. Ray Burley, Chairman of the Board, Ontario Motor Coach Association, and Operator of Can-ar Coach Service: Senators, OMCA is the voice of private sector bus operators and coach tour companies in Ontario. OMCA has over 1,200 members and represents more than 80 bus operators, over 100 tour operators and some 800 affiliated sellers to the group tour industry, including attractions, destinations, hoteliers and retail outlets across North America.
Mr. Carroll: We estimate that there are about 1,300 motor coaches in the province of Ontario. Our industry serves 1,100 Ontario communities. Intercity bus services typically include scheduled line run, charter, tour, shuttle and contract operations. We provide essential public passenger transportation service without government subsidy.
Motor coach travel is proven to reduce road congestion, gridlock in major urban centres and pollution. Ontario's billion-dollar tourist industry depends on a strong, flexible and responsive intercity bus industry. In addition, intercity bus operators pay taxes, provide employment for thousands of Ontarians, and are a major contributor to Ontario's economic well-being.
Mr. Burley: Our industry is proud of its strengths that set it apart from other transportation modes and other types of motor vehicles. According to Transport Canada and the United States DOT, buses offer the safest form of passenger transportation.
Not only are we safe, the intercity bus is the fastest mode of short-haul travel and boasts the best environmental performance of any passenger transportation mode. Our industry is privately financed and operated. Unlike some other modes, taxpayers do not pay for our rolling stock, garages and terminals. Using state-of-the-art vehicles, we provide comfortable, reliable, affordable and fully accessible transportation for Ontarians and the hundreds of thousands of visitors to our province.
Mr. Carroll: The intercity bus industry in Ontario is generally in an unhealthy state. Our industry is capital intensive. With today's motor coaches costing in excess of half a million dollars before taxes, there is a low return on investment.
Government subsidies to our competition, such as VIA Rail and municipal transit, create an uneven playing field for bus operators. The Canada Transportation Act Review Panel, in its report tabled in Parliament in July 2001, noted that government documentation of VIA Rail funding decisions has not explicitly addressed the question of why intercity passenger rail competes with commercial alternatives such as air and bus. The panel also noted that the rail system cost per passenger-kilometre is more than four times the total social cost of intercity bus.
Our industry suffers from an image problem. Many people are not aware of our modern, state-of-the-art coaches and innovative services. Some people look at bus travel as the mode of last resort. One reason for this problem is that our industry has not done an adequate job of marketing and development. Mainly, it is because of government interference. In some cities, it is illegal for private bus companies to use the ``bus only'' lanes. Bylaw enforcement officers and the police target coach operators for parking violations when coaches are dropping off or picking up groups at hotels and attractions. Our industry faces direct competition from government-operated and taxpayer- subsidized entities. In addition, many cities and government-operated regional transit entities have been reluctant to partner with private sector bus companies. More details regarding this concern will follow later in our presentation.
Our industry has been negatively impacted by amendments to Ontario's Public Vehicles Act back in 1996. These amendments were intended to be only temporary measures to allow for a transition to a fully deregulated bus industry in Ontario. However, deregulation never occurred, yet the ``transitional'' provisions of the Public Vehicles Act and the Ontario Highway Transport Board Act still govern the economic regulation of the industry today.
A major concern of our industry is the uncertainty created by the Ontario government about the future of economic regulation.
Mr. Burley: Ontario's intercity bus industry stands to be severely impacted if the province proceeds with any plans to expand government-operated and subsidized regional transit bus service into centres presently served by non- subsidized, private carriers. Presently, viable, efficient, job-creating and taxpaying carriers are serving these centres with a total of 194 scheduled trips per day to and from Toronto.
Expansion of government-operated bus service would threaten the future of these companies and result in increased cost to Ontario taxpayers. If the government proceeds with this expansion, it will amount to nationalizing the bus industry in this part of Ontario. This will impact other intercity services currently provided by the private sector, including scheduled, charter, tour and contract services. The issue of economic regulation/deregulation will become moot.
As we see it, government involvement in regional transit services should not be in the form of direct service delivery in competition with the private sector. Rather, it should be a coordinating and a planning role.
Another example of subsidized competition is the TTC's decision to start bus service between the TTC subway stations and Pearson Airport. A private carrier was providing high-quality, non-subsidized service on this route, but was forced to discontinue, unable to compete with the $2.25 fare. We believe it is fundamentally wrong for a government-operated and heavily subsidized entity to compete directly with a non-subsidized, private carrier.
Mr. Carroll: Municipal transit entities benefit from the monopoly service provision in the Ontario Municipal Act that enables municipalities to establish bylaws to prohibit service competition. However, there is nothing to stop municipal transit entities from expanding their subsidized services beyond the municipal boundaries. Municipalities can take full advantage of their monopolistic position and subsidize operations to provide charter and shuttle services for conventions. It is no wonder that carriers are reluctant to invest up to $100,000 for a licence, with no course of appeal if they are unsuccessful, when they are told to operate on back roads or face competition from government- operated entities.
Mr. Burley: You hear it time and time again, municipalities pressing the federal and provincial governments for more transit funding. Municipally operated transit systems are less efficient than contracted service delivery by private bus companies. Yet, despite proven service delivery improvements and cost savings, many cities are strongly opposed to competitive tendering. This should be kept in mind in the event the committee hears from the transit representatives. In the past, they have taken a position against deregulation and have asked for more money to fund their operations.
Private sector competitive contracting of transit services has been highly successful in 20 municipalities across Ontario, including 5 within the GTA. Chatham Transit has used a private contractor for over 46 years. Around the world, experiences of competitive tendering of transit services have been positive and have shown savings of up to 51 per cent over direct municipal operation. Quebec is ahead of Ontario. A public-private partnership has been created there, with carriers contracted to provide regional transit services in the Montreal area.
Ontario's private bus companies have what it takes to move commuters and other travellers safely and efficiently. However, we require expanded business opportunities to remain viable and offer any intercity services.
Mr. Carroll: Economic regulatory controls have been in effect in Ontario since 1929, when the Public Vehicles Act was passed to regulate scheduled line run services. At that time, charters and tours were unheard of. In fact, the statute still only refers to scheduled line run services, while the charter activity is addressed in the regulations.
In August 1995, the newly elected Ontario government announced it would deregulate the intercity bus industry in Ontario. OMCA and its members were opposed. They asked to be given until January 1999 to prepare and adjust. The Ontario government said that 1999 was too late. Eventually, the industry and government reached a compromise date of January 1, 1998 for deregulation.
Former Ontario Minister of Transportation Al Palladini told the Ontario Legislature on April 4 1996 that:
The government is committed to eliminating barriers to economic growth and investment. Tackling regulatory burden is part of this effort.
He also said that:
The bus industry is the last Canadian transportation mode subject to entry controls.
He added that:
Government has no business telling bus companies how to run their operations, except in the area of safety.
Mr. Burley: Transitional amendments were made in 1996 to the OHTB Act and Public Vehicles Act to increase board powers and streamline its activities. While these amendments may have been appropriate for an industry in a regulatory transition, the act, and the powers of the board, are not appropriate for today's fully regulated industry. We are particularly concerned that carriers have no right of appeal and that every order and decision of the board is final and binding.
Mr. Carroll: Despite significant preparatory costs incurred by the industry and major transitional amendments to the act, the government reneged on its promise in the summer of 1998, a few months past the established date of deregulation. The government subsequently said it would deregulate when the federal government deregulates extra- provincial transportation.
Meanwhile, bus companies, acting in good faith, prepared for deregulation. They purchased new coaches at $550,000 apiece and entered into binding contracts with tour operators. Family businesses were bought and sold based on the value of operating licences. Ontario's bus industry has been confused and let down by the provincial government. Bus companies suffered losses due to investment commitments and contracts that could not legally be fulfilled. The resulting confusion and climate of uncertainty has hurt the industry and impeded investment and growth.
Mr. Burley: The Ministry of Transportation and the Ontario Provincial Police seldom enforce the economic regulatory sections of the Public Vehicles Act. Instead, the industry is responsible for filing complaints about unlicensed activity to the OHTB, which may assign an investigator. In other words, enforcement is complaint-driven, under a user-pay system. Thus, only those who can afford to, lodge complaints about unlicensed carriers. The board will assess costs against illegal operators at its discretion.
This system leaves much to be desired, since the actual effect of economic regulation is directly proportional to the extent to which the rules are enforced.
Mr. Carroll: For the past seven years, indecisiveness and mixed messages from the provincial and federal governments have harmed our industry. Governments surely cannot be proud of the current state of economic regulatory controls of the bus industry across Canada.
Mr. Burley: In 1995, over 90 per cent of our members were opposed to economic deregulation. However, our members had to accept the government's decision to deregulate and prepared accordingly. Today, our membership is split on the issue. Roughly half would like to see deregulation and about half would like economic regulation to remain.
OMCA supports the ``Position of the Four Associations'' presented to the Senate standing committee at the Vancouver hearings this past Monday. Our position is that the federal government, having regard to all the factors and issues at stake, must ultimately decide whether economic regulatory controls are in the best interest of the public.
If the government decides to keep economic regulation, then changes should be made to the regulatory system to ensure that it is effective in achieving its objectives. If the government decides to deregulate the industry, then it should be phased in over a period of time necessary to implement required safety provisions. Details of the two options are contained in the ``Position of the Four Associations'' document, which is attached to our submission.
Mr. Carroll: We do not believe that economic regulation and safety are intrinsically linked. Economic regulation is not a safety panacea. Provincial governments have established rigorous carrier safety regimes that have improved the overall safety performance of the commercial vehicle industry — for example, commercial vehicle operator registration, carrier safety rating, facility audits and other standards set out in the National Safety Code.
In Ontario, the economic regulatory control system does not even ensure that safety is considered in determining public necessity and convenience.
Mr. Burley: While charter carriers always have and will continue to serve rural Ontario, concern has been expressed that some carriers will discontinue some rural scheduled services if the industry is deregulated. On the other hand, some carriers say they will add new rural scheduled services if the industry is deregulated.
It is unknown how many routes are currently being operated by virtue of cross-subsidization economics. While there is a strict approach to market entry, there is no effective regulatory approach to market exit. The carrier can simply terminate the service with notice.
Rural service levels are more a matter of whether the population of rural Ontario grows or declines. No doubt there will be some rural service lost in deregulation.
Mr. Carroll: In 1998, Professors Andrew Stark and Michael Krashinsky conducted a study on bus economic deregulation for the Ontario government. Their report noted that:
In Ontario, the current economic regulatory regime is largely ineffective in protecting service to small towns. If a carrier simply no longer wants to operate a particular route, nothing can stop it from abandoning that route even now; and many will lose service anyway under continued regulation.
Mr. Burley: Their report mentioned that service loss caused or accelerated by deregulation could be mitigated, even outweighed, by other kinds of service provision. They also noted that deregulation will not create a monopoly market. In fact, it would help to mitigate single-carrier dominance by making markets competitive. Competition, after all, is the great equalizer and the fundamental principle upon which free economies are based.
We are confident the committee will be objective and will consider the fundamental merits of a fair marketplace, the health and financial viability of our industry, and how the public at large can best be served. Our industry, our passengers and the public deserve to know what the federal government expects of an intercity passenger system, both in the short and the long term. We urge the Senate committee to expedite its study so that a decision can be made soon about economic regulation. Without a national passenger strategy, without clarity as to the role of our industry, and without some certainty about the rules that we must operate under, there is a risk that our industry will flounder, lack vision, and not grow in step with the future needs of Canadians.
The Chairman: I thank you for the information you have given us, especially about Ontario's situation.
On page 3 of the ``Position of the Four Associations,'' you allow for provinces with no economic regulatory requirements to opt out of the section on economic regulation. That would allow for a patchwork of regulations among provinces. Yet on page 4, you call for a ``uniform approach'' to economic regulation. How can these two points of view be reconciled?
Mr. Brian Crow, President, Ontario Motor Coach Association: Madam Chair, the position of a province being able to opt out only applies to the economic regulation component. It does not apply to the safety component that we talk about in the first section. We are saying that there must be a common approach to our being able to obtain a licence across Canada with respect to part A, which is safety. With respect to Part B, economic regulation, we are saying that a province can opt out of that.
That is as much a recognition that some provinces have already opted out of regulation. It might be hard for them to come back into it. We are hoping that they would support this position of the industry so that we can get the first part, safety, in place. Then they could be allowed to opt out on the economic regulation component.
The Chairman: You also say that it is for governments to decide on economic regulation. Yet, you propose for a regulatory regime to serve public need and necessity. This is of course a public-interest test for entry into an economically regulated regime. This seems to indicate that one of your principles for a healthy bus transportation system is economic regulation. Is that the case?
Mr. Crow: We are saying that the health of the industry is dependent on knowing what the rules are, knowing what a national policy is, knowing under which rules we have to work. That is what is important. We want to grow our business. We want to move every Canadian everywhere they want to go. As has been explained before, we need a policy. We need to know what our role is in a national transportation policy.
If the government decides that economic regulation is in the public interest, then by all means we will accept that, live with it and adapt to it. We have given you recommendations on how that might be implemented. If the government decides it is in the public interest to deregulate, then we have the recommendations there.
From a material perspective, we did provide an opinion to the government on what we wanted done on deregulation. They did not listen to us. As we have explained, when we then adapted and tried to live with what the government decided, we were very disadvantaged. It is difficult to get carriers, as well as associations, to come forward with a position on regulation when some think it really does not matter what our opinion is — at least based on past experience in Ontario — and that our industry is split about it. That is why our position is such that it is.
The Chairman: I was surprised that the report from the two professors, dated 1998, has not been acted upon by the provincial Department of Transport.
Mr. Crow: You would have to ask them why they have not acted upon it. We obtained a copy of the report through Freedom of Information. We submitted our application for the information, and then a week later it was released to the public. The Department of Transport released it, but you will have to ask them why they did not act on it.
The Chairman: If governments were to opt for economic deregulation, you indicate in at least three places in your position paper that there is a need to move slowly, or over at least three years. Does that not seem long? The concern is that 10 years have already passed since the Royal Commission recommended economic deregulation.
Mr. Crow: It has already been four or five years since the province announced it was going to deregulate us. That has not happened. Yes, three years is a long time.
One of the components we suggest, Madam Chair, is that when a company or carrier wants to get in the bus business they should have to obtain authority of some sort — especially for the safety component. As set out in our presentation, a carrier must have an inspection or an audit done even before he gets into business. What are the rules? What is drug testing? What are the safety requirements to establish the knowledge about how to operate?
We believe that it will take three years for government to develop and implement our recommendations in those areas. That time frame was based on our perhaps optimistic, perhaps pessimistic, view that it would take three years to implement the changes that we are suggesting.
The Chairman: Would you consider a national standard proposed by, let us say, federal government to the provinces and discussed with the provinces?
Mr. Crow: Do you mean a national standard with respect to safety?
The Chairman: Yes.
Mr. Crow: Yes. Dave Carroll could probably answer that better, if you could provide some details. There is a National Safety Code now that we follow. Mr. Carroll could explain more to you. However, one difficulty with that is that it is left up to the provinces to enforce. There are differences among the provinces. Discussions are ongoing to update that. Mr. Carroll sits on those committees. We believe strongly in a National Safety Code and that it should be implemented equally across the country.
Does that answer your question? If you require more detail, Mr. Carroll could help you.
The Chairman: I want your thoughts on the National Safety Code.
Mr. Carroll: The National Safety Code consists of 13 standards that cover things such as driver licensing, pre-trip inspection, and hours of work. It is a comprehensive standard. The provinces generally appear to agree with the standards. For the most part, the system is fairly consistent across the country. There are some minor changes in each province. For the most part, however, they agree to those standards.
The Canadian Council of Motor Transport Administrators and Transport Canada work on these standards. Those bodies have regular meetings. There are several working groups. There is, hence, very good collaboration among the provinces to try and arrive at a consistent set of rules. We do not have the problem that Ontario Northland described to you this morning: Where does one find out what the rules are? I think they are making good progress on that front.
Mr. Crow: Madam Chair, may I comment regarding a national policy that we agree on. My comments refer back to a couple of other points we made.
There is a national standard, but not everybody has to follow it. Municipal transit operators do not have to follow hours of work. We are restricted in how many hours a driver can drive or be on duty. They are not. However, we have to compete against them.
That brings me back to the point of fairness and equality. We pay GST. We charge GST. We do not get subsidies. We have to comply with safety standards that our competitors do not have to meet. People wonder why we are not growing our business.
Senator Gustafson: You have made it clear that government interaction is your greatest fear. It is not the fear of deregulation or regulation, but knowing what the rules are. Is that right?
Mr. Crow: That is absolutely correct. The fear of government interaction is one component. Our other fear is government interference, in the context of the municipalities. We have tried to build a new intermodal bus terminal in Toronto. Greyhound Coach Canada, ONTC and OMCA have spent thousands of dollars and hours because the government-owned bus terminal in Toronto told us to get out. We spent much money and time, found a new location, found a developer, and bought land. Then the City of Toronto told us we could not move, that we had to stay in the existing terminal. So there is government interference.
Regarding transit, we have a request for the Chief of Police in Toronto to answer us and he will not answer us. Police officers have said that transit makes them go out and ticket our coaches. You are at a good hotel here. At another hotel in town, the Sheraton Centre, we could not stop to pick up passengers because there is no stopping and no parking. The City of Toronto finally gave us two parking spots — not for parking, but for passenger pickup. We thought we had won that battle. Now we are ticketed not for stopping to pick up passengers, but for trying to load their bags, because bags are freight. So we can stop to load passengers but not their bags. I can tell you most of the passengers we load at Sheraton Centre are inbound Asian tourists who probably spend $10,000 to $20,000 a day in this city. We have to explain to them why we get tickets for picking up their bags.
Too much government interaction or interference is even a broader fear, sir.
Mr. Burley: I would like to offer a comment on that point, which has a caused a lot of confusion within this whole situation of regulation/deregulation. We are partially regulated and deregulated at the same time in the Province of Ontario.
This was brought to light very quickly for many people when the casinos opened up. Casinos in the very early days became a lucrative form of business for operators, including OMCA, to run back and forth and take passengers up there. We have lost about six employees who have gone independent. They have easily been able to lease a coach. Obtaining a licence is also easy, in the sense that there are few restrictions from other operators challenging and saying they were going to be deregulated.
That is where the situation was going. These people jumped off the mark. It was a timing issue. The casinos came on board. There was an opportunity for a number of operators to get into business and be licensed. For example, if Mr. Crow decided he wanted to become a licensed operator, he would go to the board and apply. If none of us challenged, it would appear to make sense to grant him a licence if he can finance his buses and obtain them, which he would do.
However, the safety issue then arises. Where do these people go to get the buses serviced and looked after? What is the care of the passengers within that? We have not seen it.
A situation arose where, because no decision was made, many decisions were made economically. As well, the larger carriers have not able to sustain themselves in this business because their bottom line has been completely eroded. We firmly believe we can move ahead with no problem and compete. However, government indecision, in one way or another, has caused great concern, and great economic room for some operators.
Senator Gustafson: It is clear that the committee should, from your recommendations, indicate that decisive action is necessary. Thank you.
Senator Adams: My question concerns the competition mounted by the government-subsidized TTC on the subway to Pearson Airport run. The TTC is charging only $2.25 for the fare. Is their fare dependent on distance? Can one go to Hamilton for $2.25?
Mr. Crow: No. The fare charged by the Toronto Transit Commission allows the passenger to move anywhere within the City of Toronto. I am not sure what that distance is, probably 15 kilometres from one side to the other. The fare also allows the passenger to go outside the municipal boundary, that is, to the airport.
The private carrier had a licence for the airport. He developed a business from the subway to the airport. It took him a long time to build that volume of business. The service was via wheelchair-accessible motor coaches. He put that service on. He had to pay the TTC to drop passengers off at the subway stop.
A couple of years after he had started to run the service, the TTC decided that it was a good service. They put their buses on to the airport. These are non-wheelchair-accessible buses. There is no room for baggage, no baggage handling. The TTC charges $2.25.
The private operator's fare was, I believe, $6.50. A significant number of people chose the TTC service over the non- subsidized service. The business lost was significant and the private operator had to discontinue the service. Now there is only TTC service to the airport, for $2.25.
Senator Adams: Do you know whether or not employees in government transit are unionized? Does this include bus drivers?
Mr. Crow: The TTC is unionized, with Amalgamated Transit Union. Many private carriers are also unionized. Greyhound, and Coach Canada from whom you heard from today, are both with the ATU. I think Coach Canada has other unions as well. It is not a union versus non-union issue. I think it is productivity versus inefficiency that is the issue.
Senator Adams: Does your company handle school bus contracts? In Calgary, we heard that to be the case with Red Arrow and other operators that run charters and bus services for the schools, among other services. Is your company allowed to do that in Ontario?
Mr. Crow: Yes. Generally, bus companies are experts in providing passenger transportation, be it transit, school bus services, intercity coach services, charters, tours, or sightseeing. Most companies get into that blend. Some of the carriers work with a scheduled service with a bit of charter and parcel express. Some companies get into the charter business, the school bus business and the transit business, and so forth. The companies blend areas in which they have expertise or find a niche.
Licences are needed, however. Whether it is a school board or an intercity coach, the operator must have a licence. A licence is not needed only for municipal transit and to operate within a municipality. However, the Municipal Act does not allow any private carrier to operate within a city.
Licences are required in order to operate a school or intercity bus. School bus operators, in addition, must have a contract with the school board. In Ontario, 85 per cent to 88 per cent of home-to-school bus services are done under competitive tendering. The rest are done by some school boards themselves.
Senator Adams: It seems that whenever a new government comes in, it tries to privatize bus services. Can you recall times when the Ontario government has tried to do that?
Mr. Crow: I am not sure if you are referring to the intercity service. School buses are generally operated now by the private sector.
Senator Adams: Yes.
Mr. Crow: In the larger communities, government generally operates transit. Markham and Chatham, as has been mentioned, do competitively tender transit services out to a number of companies in Ontario.
The Ontario government does operate a regional transit operation, a very good operation called GO Transit. GO operates rail and buses, as most of you may know. The government has indicated, however, that they want that service expanded to other communities, such as Peterborough, Kitchener, Guelph, St. Catharine's, and Niagara Falls. If that service is subsidized, it will take the heart out of the Greyhound service and the Coach Canada service between those communities. Mr. Carroll might be able to answer better, but I think for Toronto to Kitchener, we have something like 47 trips per day by Greyhound.
If the Ontario government forces a transit property to provide that service at a subsidized fare with which we cannot compete — even if it is only at some peak periods — then that system falls down. The private operators will lose the rest of that business.
It has happened before. Toronto-Hamilton used to be an intercity bus movement. We do not do that now. There are, I think, two or three carriers that have a licence to do it but they cannot do it and compete against the government. We have expressed our concern to the Government of Ontario that what they are doing is, in essence, equivalent to nationalizing the bus industry here if they expand to those communities and put us out of that business.
To return to the point of our industry, we want to know what the rules are. We would like that national passenger transportation policy. We would certainly encourage provinces to adapt it and have one similar so that we can continue to operate the services we do, Senator Adams.
Senator Adams: Does the government have up-to-date safety regulations like you do for safety on the buses?
Mr. Crow: Is your question: Does it have safety regulations for accessible services, senator?
Senator Adams: Yes.
Mr. Crow: If we ever thought there were safety issues for any of our services, accessibility or not, we would be raising it. I do not think there is any issue with the safety of the accessible services on our motor coaches. If your question has to do with Greyhound, Coach Canada, and Can-ar, these and other carriers had wheelchair-accessible buses on the road before government transit operations did. We had wheelchair-accessible services before the government did.
What disappoints us is that that private service to the airport used accessible buses. The TTC buses in use now are not accessible. From an Ontario point of view, what bothers us, those coaches that were on that service in non-peak period provided shuttle services for conventions and other services; some even got into scheduled services every now and then. Those coaches are no longer in Ontario. After losing that airport service, the coaches were taken out of the province. In fact, they are now in the province of Alberta.
If you put us out of business, we will find other markets to go to. The result is, that service has deteriorated between town and the airport.
Senator Adams: We heard that one service offering buses equipped for the handicapped offers leather seats, more leg room, a coffee rooms in the back, and better washrooms. They estimated that one such outfitted bus cost about $600,000. Do you have an idea how much a bus without this equipment costs?
Mr. Crow: Mr. Burley signs the cheques. I think he could tell you precisely. It is in the neighbourhood of $500,000 plus, without many options, with tax about $550,000. I know that some buses hit the road at $1.2 million to $1.3 million. Those are the exceptions, not the rule.
The Chairman: You seem to be concerned about our objectivity. Do not worry; we will not expedite our report. We want to have a full report and make sure that we have covered all the various areas of the bus industry, especially as directed to the users of the bus industry.
Mr. Crow: Madam Chair, you asked me a couple of days ago to supply you with some information and copies of correspondence we had with the federal minister on taxes.
The Chairman: Yes, I did.
Mr. Crow: I have that here but was unable to distribute it to you in advance. I will leave that with you.
The Chairman: Thank you. We will distribute it to the members.
Our next witnesses are from Canada's Association for the Fifty-Plus.
Ms Judy Cutler, Director of Communications, Canada's Association for the Fifty-Plus: Senators, we thank you very much for this opportunity to present this brief to the committee on an issue of great importance to many seniors and those 50-plus. I am going to turn it over to Mr. Gleberzon and then do the concluding remarks at the end.
Mr. Bill Gleberzon, Associate Executive Director, Canada's Association for the Fifty-Plus: I would like to begin with a few words about the Canadian Association for the Fifty-Plus, CARP.
The witness list shows the name Canadian Association of Retired Persons, which is the name under which we were founded. However, we now call ourselves CARP, Canada's Association for the Fifty-Plus because our members have always been 50 and older.
Senator Maheu: Nor are your members all retired.
Mr. Gleberzon: Yes, that is correct. We are the largest national association of mature Canadians, representing almost 400,000 members right across the country. We are a non-profit organization and receive no operating funds from any level of government to maintain our independence and autonomy.
Our mission is to promote the rights and quality of life of mature Canadians — and, indeed, of all Canadians regardless of age. Our mandate is to provide practical recommendations for the concerns we raise, rather than just ``carping'' about them, as we say.
I would first like to draw your attention to the usage of intercity buses by seniors — that is, in this case, people over 65. According to a 1999 KPMG report on the impact of deregulation of scheduled intercity bus service, 10 per cent of bus riders in Canada are seniors — about 800,000 fare-paying passengers. There are an estimated 8-million fare-paying passengers in total.
The 10 per cent seniors who are bus-riders represent about 23 per cent, or one in four, of all Canadian seniors. Forty-two per cent of bus passengers have incomes below the poverty line and, coincidentally, almost 40 per cent of seniors have annual incomes below the poverty line. Buses provide many of them with the only possible means of intercity transportation because of the relative accessible cost for bus travel.
CARP is very concerned, therefore, that if bus service were deregulated, the routes that are currently serviced would disappear because they might be assessed as not being cost-effective. Moreover, usage of chartered bus services by seniors with moderate incomes is relatively high since it represents the only economically feasible means available to them for travel.
The next issue is impact of deregulation. According to the KPMG study, approximately 250 scheduled bus routes service about 3,000 communities. If the industry is deregulated, around 27 per cent of these communities will lose all bus services. An additional 34 per cent will suffer reduced services. This will affect about 22 per cent of total passengers and includes many seniors.
It is estimated that 7 per cent of communities will benefit from lower fares that may result, impacting on about 40 per cent of bus passengers. This means that in all, 60 per cent of all bus passengers will suffer as a consequence of deregulation.
The history of travel services in North America and elsewhere demonstrates a recurring process of initial greater competition followed very quickly by a reduction to a smaller number of competitors than existed before deregulation. The fate of the Canadian airline industry is a principal example of this process. However, what might appear to be sound business practice has a profound negative impact on the quality of life of people as citizens and consumers will suffer increased isolation and hardship because they will lose even the limited travel alternatives available to them.
According to the KPMG study, two of the three main purposes for bus travel are for medical/emergency visits and to visit friends or relatives. Indeed, according to that study, many people, particularly the elderly use the bus to get to medical appointments — that is, to go from smaller communities where they live to larger centres with medical facilities. I must say that is our experience, too, from what our members and others tell us.
Northern and rural communities as well as small towns are serviced mainly by buses, even though this service is currently often limited. Potential reduction of bus service would result in an increased tension, hardship and cost if commuters had to stay over in a hotel or motel for a day or two as they waited for the next bus in a reduced service. Even seniors who own cars prefer not to drive at night or on highways, therefore buses offer them the only reasonable means of travel.
To commute to/from work or school was the third major reason cited for people using buses. While this reason may not appear to impact on many seniors; nevertheless, about 6 per cent of those over 65 are still in the workforce and may have to commute to their jobs. Moreover, many people between ages 50 and 65 who are part of CARP's constituency certainly are gainfully employed, and while figures for usage by this age cohort are not readily available to us, undoubtedly many of these workers rely on buses to get to work.
It is important to retain low fares. It should go without saying that increased fares for bus service would have the same effect as reducing services. People living on low and fixed incomes simply could not afford to use buses. In turn, a decrease in use would further reduce the revenue of bus lines, thereby only exacerbating the economic situation for the companies and their customers, as well as worsening the safety and quality of life for senior commuters.
There are safety considerations that concern CARP. It is important to continue the enviably high standard of safety that exists in the Canadian bus industry generally. Improvements, of course, must be sought constantly — as must general national standards of safety for the industry. The federal government could facilitate this goal in partnership with the provinces and territories, the industry, experts in the field and consumer groups.
However, the initial competitive rush that might follow deregulation could result in a decline in service and even safety in the contest to increase customers by reducing fares in order to increase profits and market share.
Another serious concern is the protection of the environment. CARP held a national forum on clean air with support from Environment Canada. Clean air, like clean water, is a legacy that our members want to ensure that their children and grandchildren inherit. Indeed, young people and seniors are most vulnerable to the adverse health risks caused by pollution.
According to Environment Canada, as many as 16,000 premature deaths across Canada can be attributed annually to air pollution. A copy of the report of our national forum is in the package that we have distributed. It has a green cover, so if you want to see more information about that.
It is estimated that emissions from buses are three times less environmentally damaging than those from cars, trains, and certainly airplanes. Whatever can be done to promote a reduction in air pollution in whatever way should be done. This includes the encouragement of bus travel as a preferred mode of travel because it is environmentally friendly. This would also fit in with the Canadian government's objectives under the Kyoto Agreement.
I would now like to turn the floor over to Ms Cutler for conclusions.
Ms Cutler: In conclusion, I would like to point out that in the near future, bus ridership will undoubtedly increase as the number and percentage of seniors increase. Beginning in 2004, the first of those born during World War II — those whom CARP describes as the ``forgotten generation'' — they are not Boomers and they are not seniors — will turn 65. Over the ensuing 26 years, they will be joined by the rest of that generation as well as by the 9.8 million Baby Boomers. By 2030, one out of four Canadians will be 65 years of age and older.
Contrary to the myth that all seniors are rich, at least 40 per cent of this older population — like the current generation of seniors — will live on low or fixed incomes. Many of these people may move to northern rural or small communities to live out their retirement years, which for this new generation of seniors, could last as long as 30 years. They may move because they want to leave the big city and because their lower incomes may carry them further in smaller communities. They therefore will become increasingly dependent on bus travel.
Cognizant of this demographic reality, we feel that it is incumbent on this Senate committee to ensure that a longer range planning perspective is adopted in regard to the issue before it. It is the strength of the Senate, we feel, to take the longer and broader view, unaffected by the immediate pressures of short-term political expediency.
CARP recommends that the Committee on the Special Study of Inter-City Buses supports the continuation of a regulated environment for intercity bus services and, indeed, advises the federal government to adopt and implement a national regulatory framework for these bus services. We further recommend that the government adopt policies that will facilitate the expansion of bus services both between and within cities.
A large country like Canada requires many modes of transportation to facilitate the movement of our population. Intercity buses must remain an integral — as well as practical and accessible — option.
The Chairman: Thank you very much for your presentation and the important information that you have provided. We are very pleased that you appear before us this afternoon.
You have certainly raised arguments against deregulation in your presentation. We have heard some arguments in support of deregulation that have noted it could allow new innovative services, such as vans in Nova Scotia. What do you think of that view, if we could deregulate?
Ms Cutler: Do you mean that deregulation can allow more creativity?
The Chairman: Yes.
Ms Cutler: I am not sure that we have proof of that. It is speculation at this point, so we would just like to see something more tangible to know that that will happen.
The Chairman: We were in Halifax, Nova Scotia, and people — especially senior citizens — from P.E.I. and Nova Scotia were telling us that they use the services of vans from small rural communities to, for example, Halifax to keep medical appointments. In addition, on the other side, the young people use also vans to go to the city for appointments when they are looking for jobs. I would like to have your views on that, if possible.
Mr. Gleberzon: I am not sure that that is what I would regard as an innovation. That is an alternative. It is simply another competitive alternative that could coexist alongside buses and, to my way of thinking, has nothing to do with deregulation whatsoever.
Take the example of the airline industry where deregulation has occurred. The major ``innovation,'' as I understand it, is that you no longer get fed on an airplane, although the rates have not come down. That appears to be the major result of deregulation. Of course, we have, in effect, also created a monopoly situation as a result of deregulation. I do not know if any of you have travelled by air in the States in the deregulated environment. The results have been the same there.
I am referring to economy service. First class or business class services have obviously gone up, as has the price appreciably. However, economy services in any U.S.-based airlines — and the numbers have been reduced, by the way — is terrible.
In terms of an innovation within the industry, how is this going to benefit the industry? The introduction of vans and other alternative modes of transportation might be a great innovation. I do not think it has anything to do with buses other than it provides people with an alternative.
The Chairman: It is a useful option.
Mr. Gleberzon: Yes, certainly.
The Chairman: Now, senior citizens told us this.
Mr. Gleberzon: It would be the same to say it is a very useful option to taking a train — the same advantage.
The Chairman: With a different mode of transportation.
Mr. Gleberzon: Yes.
The Chairman: What is your view on the level of bus service available to users in this province, in Ontario, and the fares that are charged for it?
Mr. Gleberzon: There have been serious cutbacks in this province and the availability of bus services to many communities, especially northern and rural communities, has been greatly reduced. People are increasingly dependent on cars.
I do not know if this is the kind of example you want, but bus service north, east and west of Toronto is abysmal. It is terrible.
Now, that is called the 905 region — sort of an extension of Toronto. However, if the service in this area is so bad, yet so close to an urban centre, imagine how much worse it is if you have to get to some northern town or some rural community where service has been cut back even more.
Fares, I understand, are relatively reasonable. To encourage more use of buses, in fact, a new terminal is being built here in Toronto to replace the rather dismal one that currently exists. I understand the new bus terminal is going to be far more user-friendly in helping people find where buses can be reached and that kind of thing. That is recognition of the need for bus service to be improved because a great many people are dependent on buses.
The VIA service in Ontario — not just train, but buses — is under tremendous pressure. I know your committee is not looking at service within the city, but I can say that service within this major economic city is being nipped at by a whole bunch of others. Having said that, in Toronto, one of the major economic centres of this country, public transportation is abysmal. To be honest, that is because the federal government has not released sufficient income. Again, I know that is not part of your mandate, but I thought I would make that pitch since I use the public transit system within the city every day.
The Chairman: Which government policies would best support the rural and small community service?
Mr. Gleberzon: What do you mean by ``which''?
The Chairman: What level of government?
Ms Cutler: I would think the provincial government because they are more in tune with the needs of the province. With provincial input and responsibility, there is a better chance for a holistic approach to the situation — one that would include environment and provide opportunities for people to get to work and to travel.
We hear these days that older people should not be driving. How are older people supposed to get around? If the Province has that responsibility, if they take from one, they can give in another. If it is a municipal responsibility, they are not going to be able to afford it. I would think this should be with the provincial government. Mr. Gleberzon, do you agree?
Mr. Gleberzon: Well, I think so. However, I think the federal government has a great role to play, as well. Provinces by themselves cannot provide the money that is needed entirely to operate the framework for an intercity bus system. The federal government has an important role to play in regard to providing funds. This has to be done on a national level and it has to be done in conjunction with provinces. At the same time, it has to be tied to maintain national standards on all levels.
However, the role of the provincial government cannot be dismissed. The municipalities certainly cannot be left on their own. There is no question about that. The two senior levels of government must work together.
The Chairman: Seniors are very close to the municipalities.
Mr. Gleberzon: Yes, they are. However, the municipalities just cannot provide the kind of infrastructure that is necessary. They just cannot do it.
With respect to costs, here in the City of Toronto the fare for the internal transportation is going up. While it may be a scare tactic, the Toronto Transit Commission is estimating a potential loss of 10-million riders. Our concern is that it appears that under deregulation, there is an initial rush of competition, which certainly shakes itself out very quickly, and you end up with a very small number of players in the field.
If there are no rules and if there is no money coming from any level of government, particularly the province and the feds, then the companies charge whatever the market will bear and cut back on those routes that they consider commercially unsound.
While that may be a good business practice, it is certainly not a good human practice — especially when we know that a lot of the people who remain in small towns and rural communities are older people. As Ms Cutler pointed out, we know that a trend is emerging whereby a lot of older people are returning to those smaller communities.
That leads to the issue of aging and providing sufficient health care facilities and so forth, which opens up a range of other social issues, at the core of which is the need for people to be able to move from one area to another.
The Chairman: That is truly a priority.
Senator Gustafson: I have a couple of questions that are not directly related to the bus situation, but part of it.
I come from a rural community myself. It is my observation that senior citizens in rural communities — at least in Saskatchewan — are much better off than those in major urban centres. They have good housing — for the most of it, new housing. They have access to vans that will pick them up. They have people come in and do their cleaning. In fact, some of our young people are complaining. They get 10 per cent off at the store for groceries and things like that. In my opinion, they are very well looked after.
Is that the reason that older senior citizens are moving to rural areas in Ontario?
Ms Cutler: Our members tell us that they are moving because they cannot afford to live in Toronto. One of our major concerns is affordable housing — especially rental housing. The availability across the country in large urban centres is very low.
Senator Gustafson: I can understand that. I live in Macoun, Saskatchewan, and I can live for a quarter of what it costs you to live here in Toronto.
Mr. Gleberzon: I would like to point out that we are not an Ontario organization; we are a national organization.
Senator Gustafson: That is what I wondered.
Mr. Gleberzon: We hear from members right across the country. The recent census states that all the growth has been in four major urban areas. For a lot of young people, you can understand why that is the case, because that is where the action is.
Senator Gustafson: How are we going to stop that?
Mr. Gleberzon: In his book Boom, Bust & Echo, David Foot makes some predictions regarding what will happen once the Baby Boomers retire.
He predicts that as more and more people retire, they will want to get away from the rush of the big city and they will not be able to afford to live there. Where do you go to find those amenities? You go back into the small and rural communities. That is what we foresee. We think he is right in that regard.
Senator Gustafson: That is already happening in places like Georgia and the Carolinas. There are acres and acres of small beautiful homes that have been built out in the country to the extent where the American agricultural people are concerned that they are losing their agricultural land to people that are settling out.
In Canada, we have become the most urbanized country in the world and yet our resources — fisheries, oil, gas, potash, lumber, agriculture and so on — are all coming out of rural Canada.
This is another whole subject, but unless we deal with it, we are going to have some very, very serious problems in the streets of our larger cities that will not be able to take care of. Decentralization has to be the vision of the future.
You just indicated that you are concerned about that with the bus factor and I can understand that because of distances. However, I was surprised to hear that there are many people moving out.
In Saskatchewan, it appears to me that most of the money is in the hands of seniors and that is probably because they are farmers who sold their farm and they have got money to retire. The City of Weyburn, one fellow said, ``Well, the senior citizens here save up all they can to buy a Cadillac to go to Phoenix for the winter.'' That is not happening for the young farmer. He is struggling. He is just about ready to go under.
Ms Cutler: With all due respect, that sounds like a very ageist perception of the situation because among seniors — as in all populations of Canada —some are rich, some are very poor. The myth of all seniors being rich is certainly a dangerous one.
Senator Gustafson: I am not suggesting that. I am just telling you what I am finding in the community where I live, that the seniors have done very well and there are a number of reasons for that.
Mr. Gleberzon: My grandfather, in fact, was a farmer in Saskatchewan and he always used to tell me he was land rich and cash poor, and that was his whole life. In fact, that is what he did for the rest of his life. My father, by the way, left the farm as soon as he could. That was in the Depression years.
My understanding is that if we look at seniors right across Canada, as we were saying, 40 per cent of them are not in the situation where they have a lot of money.
Senator Gustafson: I understand that.
Mr. Gleberzon: They are people who receive guaranteed income supplements, which means their annual income is around, if they are topped up, maybe $13,000 a year. If those people are able to travel, if they have families outside, they certainly do not have a car. Without the availability of buses as a viable option, then they will not be able to move from one city to another. That seems to be the case. We hear this, as I said, right across the country.
Senator Gustafson: We have had people before this committee who indicate that, with deregulation, the rural areas would be better off if open to competition and bidding.
Mr. Gleberzon: That is always a possibility. However, based on what we have seen so far, that does not seem to last very long.
Senator Adams: The $2.25 fare to go anywhere within the city — it is subsidized by Ontario taxpayers. Are there any special rates offered, say, to seniors or retired people?
Mr. Gleberzon: As I understand it, $2.25 is the standard fare for a trip. It is the standard fare for bus, streetcar or subway in the City of Toronto — or any combination thereof. A trip will take you from roughly Lake Ontario to Steeles — and I am not sure of the east-west boundaries. You can travel the whole city of Toronto, as long as you have a transfer.
We used to have zones, but no longer. However, once you go beyond Steeles, which is the northern boundary of Toronto, or you get beyond the eastern or western boundaries of Toronto, there is a whole other service for which you pay totally different amounts.
I happen to pay on a monthly basis. I park my car at the subway station, where I do not have to pay for parking. It is included in the fare. I pay $85.75 a month. However, I understand that fare is going up soon.
Senator Adams: Another $20?
Mr. Gleberzon: I do not know if it will be $20.
Ms Cutler: We have heard that it will go up by 20 per cent soon, and then another 20 per cent the end of the year.
Mr. Gleberzon: That is because the province has said it will kick in some money, but again, that is not enough. The federal government has not stated if it is going to kick in anything.
So the Ontario system has a publicly owned system — the VIA system — and that is a bus system primarily and there are trains. People are totally dependent on those for commuting; their lives revolve around whatever time those buses and trains arrive and depart, because so many people live in the bedroom communities to the east, west and north of the city.
The highways, of course, are used, but they are very congested. As we said, a lot of seniors are reluctant to use highways of drive at night. For northern communities in particular, the intercity transportation available is extremely limited.
Senator Adams: Are you referring to people who are retired or over the age of 50?
Mr. Gleberzon: We understand, according to the report, 10 per cent of riders are seniors, and we are assuming that the report refers to ``senior'' as anyone over 65. That translates to about 800,000 passengers — possibly 400,000 return trips.
Senator Adams: If a retired couple wanted to go to, say, Florida, are there any organizations that get together and charter a bus? Do you have anybody else to do that, or does the bus company do that?
Mr. Gleberzon: For a lot of people, especially older people on moderate incomes, that is probably the principal way they can travel throughout North America. They cannot afford to go outside of North America, so they will hire on a charter bus tour.
The chartered bus tour costs, of course, vary. As far as I know, they are not regulated other than for vehicle safety features and so forth. Less than 5 per cent of seniors actually go south for the winter — especially nowadays with the exchange rate and interest rates.
For many people, intercity travel — without charter travel — is the major way to go. Vans obviously offer a travel alternative. However, my bet is that if there are a number of individuals or companies providing travel by vans, it will not be long before there are only one or two companies running the whole show. That is just how the system seems to work in North America.
Senator Adams: A lot of people are retiring in Elliot Lake. There used to be a mine there.
Mr. Gleberzon: That is right. What they have found is that many of them have to go south if their health deteriorates. Serious medical treatments — cancer treatments, for example — are either not available in the northern part of the province or they are limited in terms of availability. Many patients have to travel south.
We have recently been in a dispute with the Ontario government regarding whether it is the government or the patients who pick up the costs of travel for health care to the south. I believe the government has decided that they are responsible. Of course, the government will do so for the most economical means of transportation possible. For many people that will be via bus because they may not have someone who can drive them. If they need a treatment, it is very unlikely that they will be able to drive from Elliot Lake, which is a long way from here.
Ms Cutler: We would like to see some more tangible signs that that would happen.
Senator Maheu: You were speaking about the impact of deregulation at the beginning of your brief. You state, ``27 per cent of these communities will lose all bus services and an additional 34 per cent will suffer reduced services.'' Given the increase in our aging population, ridership can only grow. I do not think it can go down.
How do you, then, arrive at that conclusion? Other witnesses today have been saying that the minute one bus company stops servicing the line, competition will jump in and offer that service.
I do not think anyone else stated they would completely lose service. How much do you disagree with other witnesses on this point, all aspects considered?
Mr. Gleberzon: We took these figures from a 1999 KPMG study. We do not have more current figures available to us. Other witnesses may. We do believe competition may increase initially. However, the process we have witnessed, wherever deregulation has occurred, is that in a very short period of time, just one top-dog company emerges. That company then makes decisions based on whatever economic considerations it considers to be most important.
It happened that way in the airline industry throughout North America, and largely throughout the rest of the world. The number of airlines that are now providing services has been reduced, as has the quality of the services provided. The costs have not been reduced much. One reason is because the cost of fuel has gone up as well.
The other consideration, however, concerns the environmental impact, too, of buses. Buses appear to be far more environmentally friendly than any other alternative mode of transportation, including vans, which run on the same principles as automobiles.
Senator Maheu: You were speaking about the seniors and the mobility aspect. I was thinking about the megacities. Toronto went through it. Montreal has just gone through it. The cost of housing in the Greater Toronto Area is out of sight. I have many friends who have found it essential to get away from Toronto because they just cannot afford their rent.
Several other cities are going through the same phenomenon. Do you think the answer is turning to government again? Regarding government services, we have one taxpayer — be it provincial, federal, or municipal. If we start asking for more money for transportation subsidies, are we not going to be digging into money that would be normally put into health use, for example? One of our witnesses used that example and said: I would rather stand in line waiting for a bus service than stand in line waiting at a clinic or a hospital.
What to you think about that? I am thinking about your comments about the federal government not subsidizing enough. How do we justify going after them to say we need more money for intercity transportation?
Ms Cutler: If we look at each of the issues separately and individually, we do not get the whole picture. If people cannot get to a doctor or travel for proper treatment, they will cost the health care system more in the end. We have just commissioned a study on the cost to the health care system of not having affordable housing. The same idea could be applied to not having proper transportation.
Senator Maheu: That is interesting.
Ms Cutler: The whole issue of homecare involves children who have the responsibility of looking after their parents because the parents are at home without proper homecare attention. If parents are living in small towns and rural areas and the children are in urban areas, how do they get to each other without proper transportation? Then again, if one does not have proper homecare, what happens to their health?
Senator Maheu: Do you think that the ultimate responsibility lies with the federal government or should a tripartite agreement be reached on something like this?
Ms Cutler: It has to be, obviously, a tripartite agreement. However, as my colleague said before, without national standards that must come from Ottawa, one has a patchwork of facilities and services across the country — some are good and some terrible, but very few being excellent.
We find the same thing in health care. Health Canada is trying to develop indicators so that there will be a national standard for various aspects of health care. Without that, services just do not live up to expectation.
Senator Maheu: Would it be fair to say you are looking at national standards rather than national funding?
Ms Cutler: We are looking at both.
The Chairman: I wanted to say that leadership is very expensive.
Mr. Gleberzon: Rental housing is so expensive because of decisions made by governments. Before governments made other kinds of decisions, rents were not as expensive. Hence, the ultimate choice is whatever the government decides to do.
Governments have made certain decisions, in Ontario, for example, to deregulate the housing industry and to do away with rent controls. The decision was made because government decided that that is the way to get more rental housing built. This deregulation has not worked and it will not work because so many other factors are involved. That is not only true in Ontario. The studies we have done show that it is right across the country.
Housing and transportation are part of the determinants of health. To say that governments will make choices between whether to put money into transportation or health depends on how they define health.
If they take a broader, holistic view, as Ms Cutler says, they will make investments in areas like housing and health. In fact, the federal government has already spent $680 million. They need the same kind of broad policy for transportation, including intercity buses.
Ms Cutler: Health Canada and other organizations and individuals across the country are heavily involved with so- called ``healthy aging.'' In order to age with health, you have to be active. You have to be able to get around. You have to be able to do things. As Mr. Gleberzon said, transportation is but one of the determinants of well-being and quality of life. It could make the health care system a lot less costly in the long run.
The Chairman: Thank you for your openness. Your remarks this afternoon will be taken into consideration when we prepare our recommendations to the minister.
This concludes our hearings here in Toronto. Before we leave, I want to thank the witnesses and observers. I want to thank my colleagues of the Senate, the library researcher and our friend Martin who helps us with the research, our clerk, reporters, translators, and technicians. Some of our colleagues, unfortunately, have already left to catch a flight, but we were happy that the Senate is not sitting today so our senators here could be sitting with you.
The committee adjourned.