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Throwing STC Under the Bus

April 12, 2017

4-minute read

There are several compelling questions raised by government’s recent decision to wind down the Saskatchewan Transportation Company. For the most deeply affected, the questions are along the lines of "How am I going to get to my cancer treatments now?" But even those of us not directly impacted by the bus company’s shutdown should take a moment to ask another question:

How much thought went into this, exactly?

A quick look at the recent timeline of government’s policy on STC suggests it may not have been much. Less than a year ago, in July 2016, the then-Minister responsible for STC, Jennifer Campeau, was expressing staunch support for the Crown.  “It is safe — and it’s business as usual,” Campeau told the Leader-Post.

The provincial government, she said, was prepared to accept the fact that STC required a considerable annual subsidy to keep itself running, because the company provided “a needed service.” Campeau even went so far as to comment that “maybe STC should be labelled as a utility,” putting it in the same category as SaskTel and SaskPower.

STC management seemed to be confident in Campeau’s words, because the company spent as if it had a bright future ahead. It ordered three new busses in 2016, and spent millions renovating its repair depot in Regina.

The official stance on STC was soon to change, however. Those remarks were some of the last Campeau made as minister responsible for STC (indeed, as minister responsible for anything.) In late August 2016, Premier Wall shuffled his cabinet, and Campeau was shown the door. Taking her place as STC Minister was car dealership owner and first-time MLA, Joe Hargrave.

Hargrave did not share his predecessor’s enthusiasm for the provincial bus company. Speaking to the Prince Albert Rotary Club in February 2017, he declared that a “full review of STC has got to take place,” citing the bus company’s drain on the provincial revenues. “I think it's up to about $17.3 million is what we have to contribute to keep them afloat every year,” he told reporters.

Exactly where Hargrave pulled that $17.3 million figure from is a bit of a mystery, because the numbers from the Crown Investments Corporation (which, we should note, Hargrave is also minister of) show that to be significantly at odds with reality. On average over the past five years[1], annual grants to STC have averaged $13.9 million per year.

Even in 2016, which for STC was fifteen months long rather than the usual twelve,[2] the subsidy only got as high as $16.7 million. And that includes a hefty $3.4 million in capital grants, most of it earmarked for those renovations to STC’s aging Regina repair centre – which is interesting in light of something else Hargrave said at the Rotary Club luncheon.

Hargrave made it clear that he had no opposition to the idea of selling off STC, even as government continued to invest heavily in the company’s infrastructure. "If somebody comes along and offers a bunch of money for it … I think that question would have to get answered,” he said. In the space of seven months, STC had apparently changed considerably in the government’s estimation, from a vital service worth subsidizing, to a drain on provincial coffers that was open to offers from anyone who wanted to take it off government’s hands.[3]

That speedy change of opinion was nothing compared to government’s next re-evaluation of STC, however. Five weeks after Hargrave’s talk in Prince Albert, the provincial budget was handed down – and STC was disposed of altogether. Bus service was stopped while the company’s 224 employees were brought in to hear the news, and customers were told STC busses would make their last stop on May 31.

There was no mention of the “full review” Hargrave had spoken of. Nor was there a buyer prepared to offer “a bunch of money” for the company – STC’s assets will be auctioned off piecemeal once it ceases operations. In reality, it was a stretch to believe that any private buyer would be interested in a company that only turned a profit off of two of its 27 routes.

So the question remains: just how much foresight and advance planning went into the decision to wind down STC? Was this the carefully considered result of a government that had studied the situation, weighed its options, and taken the most practical way forward? Or did the government, staring down a billion-plus-dollar deficit, simply panic and throw the provincial bus company … well, under the bus?

The three brand-new 22-passenger busses, sitting unused at the Regina depot while they wait to be auctioned off, suggest it might be the latter. So do the multi-million-dollar renovations to the Regina maintenance centre, which only wrapped up last year. If any real long-term planning had gone into the decision to wind down STC, it seems as though government wouldn’t have handed the company millions of public dollars to invest in a future that would never arrive.

Was winding down STC in its entirety really the best option? Could the company have continued on in some reduced form, to ensure that those who really needed it had access to transit, even if they had to pay more or wait longer? Could the new smaller busses, such as those sitting unused in Regina, have boosted efficiency enough to reduce the size of STC’s annual subsidy?

If Minister Hargrave had followed through with his talk of a full review of STC’s operations, we’d have had a much better understanding of what the options really were – and we could have been confident that the provincial government did, too.

Taylor Bendig is a Research Officer with the Saskatchewan Government and General Employees’ Union (SGEU). 

[1] That is, 2012 – 2016. Data for 2017 was not published as of this writing (or as of Hargrave’s speech.)

[2] In 2015-16 STC switched its fiscal year-end from December to March, which meant including an extra three months in that annual reporting period.

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