Greyhound Chases Cash Rabbit. Time to Nationalize?

As Greyhound uses the economic downturn to put a gun to the heads of provincial and federal governments by announcing the elimination of bus routes in Ontario and Manitoba, the Alberta Report asks, why not nationalize Greyhound?

According to Greyhound, there's simply too much regulation, too much cost, to run a for-profit transportation system.

In a bizarre string of press release, Greyhound stated that operations will cease in Ontario and Manitoba. Greyhound will also be "reviewing its operations in Alberta, Saskatchewan, British Columbia, Yukon and the Northwest Territories."

The company wants "assistance to cover its losses...in order to maintain this essential services."

Stuart Kendrick, Senior VP of Greyhound said that the company needs $15 to $20 million in public funding in order to be profitable. He said Greyhound has tried repeatedly to "right-size" [shudder] bus routes, but federal and provincial government wouldn't allow Greyhound to abandon some routes.

A few things to note:

1. Greyhound acknowledges that its services are essential, as do some MPs and officials in the provinces directly affected.
2. The company (Greyhound Canada Transportation Corp.) is a subsidiary of Scotland's FirstGroup Plc. Stock prices look good.
   
3. Greyhound operations in Canada and the US made a profit of $86.3 million CAD last year (48.5 million GBP) - see page 12 of the Annual Report and Accounts 2009 - although we can't find a route-by-route profitability breakdown.
   
4. In the above annual report, FirstGroup Plc. says, "We have reduced mileage by 7.6% in the US and in Canada, where we have to seek regulatory approval prior to network
   changes." Yeah...right.
   

Maybe we should give them $15 to $20 million in public assistance. Heck, maybe we should give them a lot more and nationalize cross-Canada bus service.

Or, at the very least, some sort of government intervention to allow Canadians who don't own a car access to national transportation, something we have a long history of doing.

Manitoba NDP MP Jim Maloway has even suggested the province develop its own bus service.

Someone will blink in this standoff, either Greyhound, Manitoba, Ontario or the federal government.

Our bets are on the feds to make the first move. With an election ever more immanent, look for the Tories to make a move to appease their rural supporters who rely on small town bus service.

Any bets?