Province to review $500K bus service subsidy for private companies at GTH
Don Morgan says it’s ‘good value’ to fund transit service for private business
The minister responsible for the Global Transportation Hub, Don Morgan, says his government is reviewing a decision to provide a $500,000 subsidy for the GTH's bus service, which shuttles workers to and from Regina for private businesses.
Over the past four years, the GTH paid a private contractor, First Canada, $1,433,000 for a bus service that runs routes designed around the shifts of two private companies located at the GTH: Loblaw and Emterra. On average, there are 900 individual bus rides per month. The GTH says "most of the passengers work at Loblaw."
During that same period of time, the GTH has collected $934,000 for the service from businesses located in the GTH. The remaining $500,000 was picked up by taxpayers.
"We will be reviewing this bus shuttle service to determine whether it can continue without the minimal subsidy provided by government.," Morgan said in a statement Monday.
Morgan had defended the decision to provide the transit service last week, but in Monday's statement he said meetings are scheduled with Loblaw and Emterra do "to explore more efficient ways to run the transit program."
In a meeting of the Standing Committee on the Economy Wednesday, NDP MLA Cathy Sproule raised questions about this subsidy. She pointed out that last year the province shut down the publicly-owned STC bus service because it required a large subsidy.
- 'It's going to be quite a nightmare': Passengers outraged by STC closure
- 'Without STC, I am in prison': People with disabilities press for return of Sask. bus company
"They are willing to throw seniors under the bus but they are bending over backwards to help their … close friends in the business world," Sproule said in an interview after the committee meeting.
"We have seniors and single moms and people living with poverty issues that have no access to public transit in rural Saskatchewan and that's a shame," she said.
Minister defends subsidy as 'good value'
According to a recent GTH newsletter, Loblaw has about 700 workers at its one million square foot distribution warehouse at the GTH.
In a 2013 interview with Global News, then-general manager Daryl Scott said Loblaw had started its own transit service out of necessity.
"We would not have the employees we have without the shuttle service," he told Global, noting that many of the workers were new to Canada and didn't have their own vehicles.
In 2014 the GTH started up a bus service of its own. Its annual report that year said the service was about "supporting GTH clients with their workforce attraction efforts."
When asked in the committee meeting about the transit service for private businesses, Morgan said "the expectation I think was reasonable on their part, when they came in, that public transit would be available."
And Morgan defended the subsidy as money well spent.
"It's good value when you realize the amount of money we recover from those individuals in property tax. And I would not want to put any of those positions in jeopardy, or somebody thinking that they're not going to be able to get to work," he explained to the committee.
GTH CEO Bryan Richards said the plan is that eventually the bus service will pay for itself once all of the land is sold.
"The transit system was set up in the long-term to be full cost recovery as the property is built out," he said.
Mounting debt and no land sales
Sales of land at the GTH have stalled. The entity hasn't sold land for more than two years and debt is mounting. It currently sits at about $40 million.
Sproule said the entity is struggling to keep up.
"They're completely unable to service their debt because they don't have the taxation revenue they need," she said.
She asked how it can justify a subsidy to successful private corporations.
"It just doesn't make sense. It shows their priorities are completely skewed and the government is encouraging that obviously," said Sproule.
At the committee meeting, she asked Richards if the GTH had considered asking Loblaw to pay more.
"At this point in time, no, we haven't sought full cost recovery," Richards said.