Saskatoon

Sask. made 'fundamental mistake' treating STC as business, not service: researcher

A University of Regina researcher said the government of Saskatchewan did not create an ecosystem suited to attract private sector transportation companies.

Private sector not stepping up in the absence of the STC, research indicates

The Saskatchewan Transportation Company was scrapped by the provincial government in its budget two years ago. The move would save the government millions over a five year period. (Mike Zartler/CBC)

The wheels on the bus just aren't rolling in Saskatchewan. 

A researcher from the University of Regina has found the private sector has not stepped up to fill the transportation gap left in Saskatchewan two years after government shuttered the Saskatchewan Transportation Company. 

The provincial government closed the STC after it determined it would cost $85.5 million in subsidies to keep the wheels turning on STC over a five year period.

"The government expected the private players to come and step in all the routes that the STC previously supported," said Chandrakant Rane, a grad student working on his executive masters of business administration at the U of R.  

"My finding was that most of the players are trying to make money in the busy corridor, between Moose Jaw, Regina and Saskatoon." 

Speaking with numerous people affected by the STC shutdown, including users, municipal and rural representatives, former STC employees and entrepreneurs, Rane's research found people are still suffering because of the closure.

He feels the government didn't create an appropriate "ecosystem" to attract private transportation companies to address the need.  He estimates there are between five and six transportation companies operating in Saskatchewan and he had spoken to four, which he said are "small players" and are struggling.

He said the government should introduce incentives for transportation companies to come to Saskatchewan, like subsidies and changes to policy that would make them easier to operate. Rane feels the government's "fundamental mistake" was looking at STC as a business as opposed to a public service.

A spokesperson for Joe Hargrave, minister responsible for the Crown Investments Corporation of Saskatchewan, said the minister's office would look at the report.

Asked for comment on the project, Minister of Crown Investments Corporation Joe Hargrave's office provided a statement saying it would be reviewing the research.

"In the meantime, our position hasn't changed," the statement said.

"The decision to shut down STC was a very difficult one for the Government of Saskatchewan. Continuing to operate STC was going to cost the government and taxpayers an estimated $85 million in subsidies over the next five years."

The government said STC's ridership had been "steadily declining," falling by 77 per cent since 1980, 35 per cent since 2012 and 10 per cent during its last year of operation.

"A number of private sector companies currently offer transportation services across the province," the statement said. "We remain hopeful the private sector will identify business opportunities to serve markets where there is demand."

STC had a declining ridership but was still used by low income earners, people with disabilities and seniors, among other marginalized groups. (CBC)

Several groups of people were affected by the closure, including seniors, people with disabilities, chronically ill residents and low income earners in Saskatchewan. The closure also hurt the bottom line for some businesses who relied on the STC for freight. 

Rusty Cameron owns Rusty's Wild Rice near Hudson Bay. He has seen sales cut roughly "in half" since the STC closed, as those ordering his product are not willing to pay the more expensive freight, which jumped from roughly $25 with STC to about $50 through the mail. 

"It's basically doubling our freight," said Cameron, who was headed out to work in the rice fields on Friday morning.

"The price of the rice is great. They love the price of the rice but the price of the freight, they just can't handle. That's what's really hurt us."

Cameron said he'd like to see the government reconsider reversing "what they've done," but isn't holding out hope, as assets involving STC were sold.

Ryan Meili, leader of the provicial opposition NDP, said in a news release released Friday that if the NDP were elected, his government would bring back the bus company. 

"We owe it to the people of Saskatchewan to restore this essential service," the statement read.

Comments

To encourage thoughtful and respectful conversations, first and last names will appear with each submission to CBC/Radio-Canada's online communities (except in children and youth-oriented communities). Pseudonyms will no longer be permitted.

By submitting a comment, you accept that CBC has the right to reproduce and publish that comment in whole or in part, in any manner CBC chooses. Please note that CBC does not endorse the opinions expressed in comments. Comments on this story are moderated according to our Submission Guidelines. Comments are welcome while open. We reserve the right to close comments at any time.