The Saskatchewan Transportation Company (STC) will cease operations at the end of May after the provincial government announced in its 2017-18 budget that it will end its subsidies to the company.
Passenger service will end on May 31, 2017 and freight will be accepted until May 19.
The move will affect 224 employees.
Crown Investments Minister Joe Hargrave blamed declining ridership and increased costs as reasons for ending the subsidies.
“As ridership has declined and costs have increased, STC’s subsidy has reached unsustainable levels,” Hargrave said in a statement.
Only two of STC’s 27 routes are profitable, according to government officials.
Hargrave said the per passenger subsidy has increased in the past 10 years from $25 to $94 and cutting it will save the government over $85 million during the next five years.
“Over the last number of years, our government has made a determined effort to contain the growth of the company’s annual subsidy,” Hargrave said.
“The $85 million that would have been spent on STC’s operations over the next five years can be redirected to other priorities.”
Officials said affected employees will receive fair treatment in accordance with company policies.
Some routes will be suspended for the remainder of Wednesday and into Thursday morning as management meets with staff.
Regular schedules will resume on Thursday afternoon.
The STC terminals in Saskatoon, Regina and Prince Albert will remain open.