Montreal, October 15, 2011 • No 293


Harry Valentine is a
free-marketeer living in Eastern Ontario.



The Downside of Government Control
over Long-Distance Transportation


by Harry Valentine


          Transportation of people is one of the more contentious issues at both the local and national level. Roads and bridges in the Montreal area are quite literally falling apart while traffic gridlock clogs the main roadways of most large Canadian centers during rush-hour periods. Travel between cities is also a problem due to delays and security checks at airports. Intercity bus travel is the economy mode on certain select main routes.


Bus Riders

          While there is scope to enhance intercity bus transportation along the main routes, regulators are likely to impose obstacles. For example, there was an industry initiative across Canada and the USA to extend the length of long-distance buses from 40 feet (12.2 m) to 45 feet (13.8 m) some 20 years ago. Unfortunately, one bureaucrat employed by the Government of Ontario stood firm that there was no need to increase the capacity aboard intercity buses. Ontario became the last jurisdiction in North America to allow the transition to longer buses, mainly because of potential losses to Ontario's tourist sector.

          At the present time, double-decker buses 43 feet in length provide intercity service on several main routes between Quebec and Ontario. These vehicles offer almost double the number of seats of intercity buses that operated on the routes some 25 years ago. Despite a bureaucrat having believed that there was no need for buses of such capacity, the operator proved that they could actually use the extra capacity of a larger bus for the benefit of the traveling public. The Ontario bureaucrat had no understanding whatsoever of entrepreneurship and innovation.

          The truck transportation industry operates semi-trailers 53 feet in length across the USA and Canada. Proven technology exists that can allow intercity buses to be built to exactly the same length. Improved steering systems that are long proven on forklift trucks that operate at intermodal freight terminals could allow the longer buses to easily negotiate turns on city streets. It is possible that some bus operators might actually find productive use for the added capacity aboard the larger buses, but government bureaucrats may again oppose the introduction of larger buses that could benefit the traveling public.

          Several decades ago, the federal government delegated its regulatory power over intercity bus transportation to provincial authorities. Some 12 years ago, an internal government report advised that economic regulation of this industry was unnecessary, but federal authorities have refused to end market regulation of intercity bus transportation across Canada. It remains to be seen whether or not the new majority government in Ottawa will end that regulation.

Take the "Eh" Train

          Previous federal governments have raised concerns over the subsidies being paid to provide intercity passenger train service in Canada. However, federal regulations that pertain to the operation of trains in Canada dating back to 1924 actually raise the operating costs of passenger trains. The regulations were developed around the operating characteristics of the few wood-burning steam locomotives that CNR operated at the time, when a day's work for a train crew was 100 miles (160 km). A repeal of railway regulations from a bygone era could reduce the operating costs of intercity passenger trains in present day Canada.

"It is possible that some bus operators might actually find productive use for the added capacity aboard the larger buses, but government bureaucrats may again oppose the introduction of larger buses that could benefit the traveling public."

          By keeping the old rules in effect, federal officials have maintained the high operating deficit incurred by intercity passenger trains. Perhaps the future of subsidy-free, long-distance passenger rail service in Canada will require the operation of trains that carry both passengers and fast freight along select routes. But federal regulation prohibits passenger train operators from adding a few rail cars of fast freight and express freight. This rule persists despite the fact that airlines and intercity bus companies are allowed to carry both freight and passengers on the same vehicles.

Skimming the Surface

          There are numerous other forms of transportation technology developed overseas that may have possible applications in Canada. However, the introduction of such technology into Canadian service would depend on government butting out and allowing entrepreneurial freedom to prevail. For example, the roads between St. Catharines and Toronto are overcrowded, but the distance over water is about half the distance by road or rail. It may be possible for privately owned, unsubsidized hovercraft services to provide passenger transportation across the western end of Lake Ontario.

          The Wing-in-Ground effect craft (WIG) is classified as a boat, but it rides above the surface of the water, suspended by a cushion of air that develops between the underside of its wings and the water surface. While it can land on and take off from water, a ramp at a coastal airport could also allow the craft to transfer from traveling above water to traveling above an airport runway. There are several routes across Canada where WIG craft and hovercraft could offer intercity passenger and freight services, provided that entrepreneurs have the freedom to do so in an environment that is free from governmental micromanagement.

          Both WIG craft and hovercraft could travel over rivers and lakes between Fort McMurray (AB) and Yellowknife, between Winnipeg and several communities to the north of Lake Winnipeg, between Sault Ste. Marie and Thunder Bay or between Montreal and Quebec City as well as points to the east of Quebec City. There may be potential for the tourist industry to introduce such technology in various regions of Canada, for sightseeing purposes and to transport tourists to resorts at remote locations. In the absence of state economic regulation, the risk managers of the insurance industry could impose some rules and regulations on the operators of hovercraft and WIG craft providing intercity services at various locations across Canada.

          Due to the sheer number of people who have direct contact with the service, intercity passenger travel has a higher profile than the movement of freight. There is an economic need to move freight between cities across Canada and the rest of the world, while most intercity passenger travel is for personal reasons. A reduction of state involvement in the movement of people and freight across the nation would benefit the population at large in the long term.