Recently our government made the difficult and much-discussed decision to discontinue three financially unjustifiable STC routes: Blaine Lake-North Battleford, Regina-Lanigan and Eastend-Swift Current/Mossbank. As government, we sometimes have to make difficult decisions with the public tax dollars we have been entrusted with, and this was one of them.
The decision to discontinue these three routes was not made lightly. We knew that STC’s subsidy had skyrocketed in recent years. A decade ago, it was about $2 million; today, it’s over $10 million. We also knew that ridership fares had fluctuated overtime, never reaching a point that could reduce STC’s operating subsidy.
Before considering route reductions, our first choice was to attempt to improve STC’s financial standing and attract new customers. STC has run promotions, including senior seat sales, rider rewards and flat fares; however, even with increased promotions and increasing ridership in 2010 and 2011, the industry changes occurring over the past year have caused ridership to fall by 6,000 people in 2012. Passenger revenues were far below expectations as a result of Greyhound’s decision to abandon connecting routes in Alberta and Manitoba.
We also asked STC to look at reducing frequency, use smaller buses, or to cut back on administrative costs. While we did reduce the frequencies of three lines and found efficiencies internally, we also discovered that the answer is not to simply run smaller buses. Ongoing trials at STC with smaller buses have shown modest over-the-road savings, but after a complete analysis of maintenance costs and replacement values, the large coach is still the best option we have at our disposal.
The next logical step was to look at routes across the province, crunch the numbers, and figure out if any particular routes should be discontinued. To make that decision, we examined passenger and freight use.
All three routes that have been discontinued averaged less than two passengers per trip over the past five years. That means that on many of these routes, buses were routinely running empty.
The second, and perhaps larger concern, is that of freight shipments. The $300,000 of annualized savings mentioned in our announcement took into consideration lost freight revenues. These three routes remain some of the least profitable routes in Saskatchewan. We also confirmed there are private sector companies with freight options available to all communities affected.
When we were first elected we made a commitment to the people of Saskatchewan to balance the budget and to spend responsibly. That means making difficult decisions. We believe that as difficult as this decision was, we did the right thing at the end of the day. It’s a commitment that we made to the province in 2007 and we intend to continue to follow through on that commitment.
Don McMorris - Minister Responsible for Saskatchewan Transportation Company