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Transportation in Canada 2000 |
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11
STRUCTURE OF THE TRANSPORTATION INDUSTRY
Bus Industry
Because of the overlap among the various market segments, it
is easier to present information on the bus industry in terms
of the service lines provided, especially as all industry sectors
report revenues in the same service line categories.
Canada's bus industry is made up of six main lines of business,
the three main ones being intercity bus services, urban transit
services and school bus services. Intercity bus passenger services
are further divided into scheduled and charter services. Tour
services are mainly sightseeing services over fixed routes and
sell individual seats, while charter carriers rent the entire
vehicle to a group. Shuttle carriers are primarily involved in
providing service to airports and rail terminals.
With one significant exception, the Canadian scheduled bus
industry is essentially oriented toward regional service. The
exception to this regional orientation is the national network
operated by the Laidlaw companies (Greyhound, Grey Goose, Voyageur
Colonial, and several others), which provide international service,
national service from Montreal and Southern Ontario to the Pacific
Coast, and significant local/regional service in Ontario, Manitoba,
Alberta and British Columbia.
Direct competition between bus carriers is currently limited
to the Edmonton-Calgary-Fort McMurray corridor (Greyhound and
Red Arrow) and routes in Southern Ontario, particularly around
Toronto and on the Toronto-Niagara corridor (Greyhound, Trentway,
PMCL, Ontario Northland).
Carriers in all sectors and of all sizes offer a mix of services.
The largest Canadian carrier, Laidlaw Inc. of Burlington, Ontario,
is primarily a school bus operator. Through its ownership of Greyhound,
however, Laidlaw is also the largest scheduled carrier in both
Canada and the United States. At the other end of the scale, most
small school bus operators also provide some charter service.
Among the charter carriers, Trentway-Wagar (Coach USA) is also
a major scheduled operator in Ontario and Quebec. Virtually all
scheduled carriers provide at least some charter service. These
overlaps among the industry sectors make it difficult to describe
the size of the scheduled and charter industry.
Table 11-7 summarizes revenues by source of revenue for the
same year.
Major Bus Events In 2000
Legislative and Regulatory Changes
Motor Vehicle Transport Act, 1987 Review
In March 1999, the federal Minister of Transport introduced
amendments to the Motor Vehicle Transport Act (Bill C-77),
which, among other things, proposed phasing in economic deregulation
of the bus industry over a two-year period.
Following the tabling of Bill C-77, it became apparent that
even a transitional approach to bus deregulation was not acceptable
to some provinces and segments of the industry. On March 2, 2000,
the Minister tabled revised amendments (Bill C-28). Following
the November 2000 federal election, the proposed amendments were
re-introduced in Parliament, in the Senate (Bill S-3), on January
31, 2001.
Industry Events - 2000
In 2000, FirstGroup PLC (London, United Kingdom) acquired the
Hertz Group of Companies, headquartered in Regina. The 13 companies
that make up the Hertz Group are primarily involved in school
bus sales and service in Saskatchewan and the Northwest Territories.
Throughout 2000, Laidlaw's financial position attracted considerable
interest. Although Laidlaw reported that its bus operations in
Canada and the United States remained profitable, the company
reported significant losses in both 1999 and 2000. Laidlaw remains
in the process of corporate restructuring.
Service Lines
As shown in Table 11-7, total revenues for the bus industry
in 1999 amounted to $6.2 billion. Subsidies represented 41 per
cent of the total or $2.6 billion. Excluding subsidies, main sources
of bus revenue are urban transit operations totalling $1.8 billion
or 50 per cent of total industry revenues, followed by school
bus activities with 25 per cent of total revenues, charters, sightseeing
and shuttle services (9.7 per cent), and scheduled intercity services
(6.5 per cent).
The service line revenue breakdown shows better than any other
indicator the cross-sectoral relationships in the industry. The
school bus sector, for example, is not only far bigger than any
of the others, but also the largest single provider of scheduled
service, with $143 million in revenue.Note 6 Overall, the
service line approach gives the best indication of the relative
growth or decline of scheduled and charter services.
As Table 11-8 shows, the Canadian bus industry experienced
a 13 per cent overall increase in revenues (excluding subsidies)
between 1995 and 1999. Within different sectors, revenue reporting
is subject to variations. These have been caused, in large part,
by consolidated financial reporting resulting from mergers and
acquisitions, as well as the new classification system used by
Statistics Canada, i.e. the North American Industry Classification
System (NAICS).Note
7
Bus Industry
NOTES:
6
In 1998-99, the high proportion of scheduled intercity revenues
recorded under school bus operators is due to consolidated financial
reporting coming from mergers and acquisitions, as some intercity
carriers activities have been reported under carriers involved
primarily in school bus operations.
7
Following the 1995 North American Free Trade Agreement, Canada,
the USA and Mexico developed the North American Industry Classification
System (NAICS) to replace the Standard Industrial Classification
(SIC) system. The bus industries covered under NAICS include urban
transit systems; interurban and rural bus transportation; school
bus transportation; charter bus industry; shuttle services; and
scenic and sightseeing transportation by bus.
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