Future Of School Busing Remains Unclear

Jeff Green | Apr 24, 2014

Small school bus operators in Eastern Ontario have been at the forefront of a battle with the Province of Ontario for the past five years over a new method of awarding contracts.

The school bus operators formed a new association, the Independent School Bus Operators of Ontario (ISBOA) in the fall of 2008 to deal with a provincially mandated Request for Proposal (RFP) process for awarding busing contracts in Ontario.

ISBOA has argued all along that the RFP process favours larger operators in a number of ways. According to ISBOA, it left small operators vulnerable because although multinational operators can bid on contracts in virtually any location in Ontario, local operators are tied to their own communities. And once a local operator goes out of business, the result, according to ISBOA, will be higher prices in subsequent RFPs because of a decrease in competition.

In a recently released Youtube video (home.isboa.ca/ISBOAYouTubeVideo.html), a number of operators who lost out in RFP bidding in some of the pilot locations for the new system talk about how they have been put out of business.

The RFP process was initiated in 2008 under Minister of Education Kathleen Wynne. Later, after the pilot projects had been completed, a new minister, Leona Dombrowsky, declared a moratorium on expansion of the RFPs across the province in the run up to the 2011 election, and appointed a task force under former justice, Coulter Osborne, to study the impact of the pilot projects.

In his report, Osborne supported some of the assertions of ISBOA. “One does not have to be an economist or possessed of particular procurement expertise to recognize that if any procurement model works to limit or eliminate competition, the result is not in the public interest ... Costs will almost inevitably rise, at least in the longer term ... I support the view that a further review of lawful procurement options should be undertaken,” he wrote.

Catherine Swift, the President of the Canadian Federation of Independent Business, said, “The whole request for proposal system from government is very, very difficult for small business to deal with ... it's not an economic issue in this case. It was a political decision to go with a process that benefited the larger players to the detriment of the smaller players.”

The Osborne report did not end the RFP process and in 2012, RFPs were issued in many jurisdictions including those of Tri-board Transportation and STEO (Student Transportation of Eastern Ontario) in Lanark and Leeds Grenville)

ISBOA challenged the processes in court and won favourable outcomes in all five cases that were contested. In the case of Tri-board Transportation, the RFP was rescinded before a ruling could be made, putting the case on hold. The STEO case is going to the next stage at a court in Kingston in early June.

The latest twist in this continuing saga came just last week when Stock Transportation, a multinational-based school bus company, announced that it will be pulling out of the Ottawa market if the fees for next year are not increased by 12%, instead of the 2% offer that has been made by the busing consortium.

In announcing their decision, Stock made the following statement: “In addition to the duty that Stock has to the boards, consortia, parents and children that we service, we also have a duty to our investors and financial institutions to provide value and security for their investment. The contracts in Eastern Ontario have neither provided a reasonable return on invested capital; nor have they provided long term security for some time. It had been our hope that the RFP process would enable operators to bid rates up to reasonable levels, leaving us with the decision to continue to operate at a loss, negotiate a higher rate, or exit the marketplace.”

This statement, according to ISBOA President Karen Cameron, reveals that what ISBOA has been saying all along is true.

“Where the RFPs were implemented, the multinationals bid low and all the smaller companies went out of business. They were counting on establishing monopolies and being able to force acceptance of higher rates. The RFPs, if they ever come in, will result in putting small operators, like those in Frontenac and Lanark County, out of business and raising the cost of transportation in the medium to long run,” she said. “What Stock is doing in Ottawa shows what this has been all about all along. They are just getting impatient.”