GTH pays nearly $78,000 public subsidy for employee buses last year

Click to play video: 'GTH pays nearly $78,000 public tax subsidy for employee buses' GTH pays nearly $78,000 public tax subsidy for employee buses
WATCH ABOVE: The Global Transportation subsidizes each employee bus ride by around $7, which added up to a nearly $78,000 bill at over 10,000 rides last year. David Baxter reports – Oct 22, 2018

Employees working at the Global Transportation Hub (GTH), just outside Regina, are able to take a special shuttle bus to and from work. Ideally, the bus would run on a cost-recovery basis but it doesn’t.

Workers that use the service do pay for their ride, and the GTH budgeted $244,000 in revenue from bus rides. However, only $130,000 was made. According to the 2017-18 GTH annual report, $222,478 was paid to shuttle provider, First Canada.

During the Standing Committee on the Economy meeting on Oct. 17, GTH CEO Bryan Richards said that the bus service is meant to function with the inland port at capacity. It is currently half-full, so the GTH is subsidizing the contract.

“So the taxpayer essentially is subsidizing the bus service that the Loblaws employees are using currently?” GTH critic Cathy Sproule asked.

“Fundamentally, yes,” Richards replied.

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In a statement, GTH Minister Don Morgan said GTH currently pays about $7 per bus ride. The service is open to all tenant employees at the GTH, and is mostly used by Loblaws and Emterra employees, according to Morgan.

READ MORE: GTH minister announces government is looking to sell inland port

This year, GTH paid around $78,000 to subsidize the $222,478 First Canada bill. Loblaws reimbursed GTH $107,275 for the service and Emterra paid $20,000. The remaining $17,000 was split among the other GTH tenants.

In the 2017-18 fiscal year, over 10,000 rides were taken on the shuttle service.

A spokesperson with GTH said that increased tenants and developed acres will help share the cost, reducing the amount of the GTH subsidy.

Sproule linked this subsidy to the per ride subsidy that ultimately led shutdown of the Saskatchewan Transportation Company (STC) in 2017. It had grown to $94 per ride prior to the end of the line.

“I think the first thought I had was a bit of loss for the people of Saskatchewan who cannot get access to public transportation,” Sproule said when asked about her reaction to the GTH subsidy.

“I’m thinking northerners, rural folks and obviously seniors and people of low income that don’t have any access to this kind of service for their needs here in the province.”

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Approximately 1,000 people work at the GTH, with a majority at Loblaws.

“The expectation I think was reasonable on their part, when they came in, that public transit would be available, and as more of them come, there’s greater opportunities for cost recovery,” Morgan said, Wednesday.

“But at the present time, maintaining those jobs, those individuals there, it’s good value when you realize the amount of money we recover from those individuals in property tax. And I would not want to put any of those positions in jeopardy, or somebody thinking that they’re not going to be able to get to work.”

In a statement released Monday, Morgan said that the shuttle service will be reviewed to determine whether it can continue without the “minimal subsidy” provided by the government. He added that all parties understand the subsidy needs to be phased out to make way for full cost recovery.

The contract with First Canada was for five years and expires in May.

Continuing GTH difficulties

Due to the GTH being structured like a municipality, in being able to collect property tax from tenant companies, Morgan said that there is an expectation services like transit are provided.

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This structuring is also making it difficult for the province to develop an exit strategy. Morgan announced in July that the province was looking to divest from the GTH.

“So all of those things have to be dealt with as part of any kind of divestiture or change in management. So we’ve asked internally within government to assess and come up with some options that might be there,” Morgan said in committee.

READ MORE: GTH Minister says growing debt means an increasingly expensive potential sell-off

The plan to get out of the GTH is spurred by growing debt, around $37 million, and difficulty in selling land. Last fiscal year there were no land sales, which is a key revenue stream for the GTH. Both the GTH and province attribute this to a slow economy and difficult real estate market.

Sproule sees this structure and struggling land sales as significant hurdles in divesting.

“The GTH was set up essentially as a municipality or something separate from private business through legislation. So the only way to undo that would be through legislation,” Sproule said.

“The default of course would be the city of Regina, because the GTH is within those municipal boundaries and I don’t get the sense the city of Regina is excited to take the GTH on.”

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Morgan said there have been no discussions with Regina to take over the GTH.

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