Four area school bus companies have filed a claim against the Ontario government, claiming a new tendering policy for bus routes has killed their businesses.
Epoch’s Garage in Kenilworth, Cook Bus Lines in Mount Forest, Doug Akitt Bus Lines in Belwood and a numbered company owned by Alma’s Dave and Anna Langdon filed the claim last month with the Ontario Superior Court of Justice.
Named in the claim is the provincial government, the Upper Grand District School Board (UGDSB), the Wellington Catholic District School Board and Wellington-Dufferin Student Transportation Services, the consortium in charge of buses for the two boards.
The group contends the new tendering policy introduced in 2009 and 2010 has ruined their businesses.
Doug Akitt (two routes), and the Langdons (three routes) did not participate in the second round of tenders in 2010.
Cook Bus Lines lost 15 routes and Epoch’s Garage in Kenilworth lost eight routes. Both Cook’s and Epoch’s are left with just one route each within the consortium.
Ruth Anne Staples, part owner of Epoch’s, said the change in the tendering process has resulted in the company losing a majority of its business and being forced to cut all but one route (from a previous 11). The company has sold most of its buses and retains one for the route it serves and one in reserve.
Staples declined to comment specifically about the claim filed.
“Our business has been destroyed,” she said.
Anna Langdon also declined to comment on the specifics of the claim. The Langdons operated three buses as part of a family business that operated for over 40 years. They have since been forced to sell their buses.
The government introduced the new system in a bid to save money, but small bus companies contend the system is unfair. The companies say they were unable to complete the bidding process or lost routes they had run for years.
Epoch’s, one of the oldest of the family-run businesses, was first established in 1946. Staples said an opportunity for her company to bid again in five years has been lost because the bus line was forced to sell almost all of its buses. The cutbacks would make it difficult for the company to re-bid.
“You can always say come back in five years,” she said. “But how? We couldn’t compete.”
Previously bus companies have bid directly with school boards for bus contracts each year. When the pilot project was introduced in 2009, small companies such as Epoch’s found they could not prepare the necessary paperwork to stay in the bidding process. The provincial formula favoured the lowest bidder.
The Independent School Bus Operators Association, which represents 100 independent bus operators, many of which are small, family-run businesses, has thrown its support behind the legal claim. The association is also interested in seeing action taken to stop more boards from adopting the new procurement policy.
“This is an issue of competing for the market, not competing in the market,” said association executive director Karen Cameron in a News release. “It completely wipes out the competition. They don’t come back. It kills off the competitors and creates monopolies.”
“The big changes are coming in the next couple of months,” she said. “There could be as many as 50 (bus companies) gone by Christmas.”
It’s expected 20 more school boards will be requesting bids on their routes by year end.
“The bigger question is whether there should be injunctions to stop other boards,” she said.
Cameron said the association would consider “teaming up” with other bus companies interested in filing for a possible injunction against school boards considering implementing the same procurement policy.
“There are many areas where operators are considering banding together,” she said.
Cameron said pressure from the provincial government will force all school boards to bring in the new policy. She said currently jurisdictions under the policy choose, “two, three or four operators,” when there may be as many as 20 operating in the area.
Cameron said the boards using the policy claim cost savings.
“Part of that savings was confiscation of their businesses and they gave it away,” she added, referring to businesses lost due to the competition.
The province wants more school boards to implement the new policy.
Ontario Chief Justice Coulter Osbourne, who headed up a task force to study the policy and was appointed by the government, has called on the province to extend its deadline for bringing in the new policy.
The task force was made up of school board representatives, bus company representatives, an outside advisor and government representatives, but failed to reach a consensus on many of the issues it looked into.
Osbourne’s directive has been ignored by the education ministry.
UGDSB and Catholic board buses are operated by Wellington-Dufferin Student Transportation Services. The consortium became a legal entity with its own staff, corporate bylaws and policies which effectively took the decision making out of the hands of the boards.
The consortium took part in a ministry pilot project in 2009 which required the consortium to include 25 percent of its routes in a procurement process. The remaining 75 percent of the routes were included in a similar process in 2010.
School boards receive grants for transportation from the province based on the number of students who are provided with service. Each member board must pay the consortium the full amount of the cost of transporting its students, even if the grants do not cover the total amount.
The consortium supports a central purchasing system as a means of obtaining maximum value for each dollar spent, consistent with educational goals for students and fair business principles.
Attempts to contact consortium spokesman Greg Seguin were unsuccessful.
Cameron said the association will follow the Superior Court claim filed by the local companies.
