Every so often, taxpayers in Winnipeg, and, for that matter, taxpayers throughout Manitoba, get a not-so-gentle reminder that there is no such thing as a free lunch. One such reminder surfaced not too long ago in the vote of the city's executive policy committee to pay $1.5 million more than was necessary to buy 30 new transit buses.
Members of the EPC voted to accept 30 buses made by Flyer Industries at a cost of $5.4 million rather than save $50,000 a bus by purchasing 30 nearly new units offered by a Calgary company. The Calgary buses were available, unused, because of the new downtown rail system built in that city.
The Winnipeg councillors are not stupid. They know as well as anyone else that $1.5 million is a lot of money. They are also painfully aware of the fact that, had they chosen to save their taxpayers $1.5 million by buying the Calgary buses, they would have actually increased the cost to Winnipeg Transit of the buses by $2.7 million.
For Winnipeg, and for Manitoba taxpayers this "free lunch" for Winnipeg Transit is an expensive soup-and-sandwich affair. Winnipeg taxpayers will have to pay, through their property taxes, one half of the cost of any new buses because transit fares cover only half the cost of the public transit system. Then Manitoba taxpayers, including the majority who live in Winnipeg, will have to pay the $2.7 million kicked in by the province.
The only real saving available to the taxpayers would be through the purchase of the cheaper buses. This will not happen because city council cannot turn its back on an available provincial subsidy, even though it is perfectly clear to some, if not all councillors, that the subsidy will come from the same tax pockets that could benefit if Winnipeg were permitted to buy the cheapest buses available.
Only on paper does Winnipeg Transit save $1.5 million by dealing with a supplier who wants $5.4 million for 30 buses rather than with a supplier that wants only $3.9 million. Also on paper, because of the $5.4 million it gets from its captive audience, Flyer Industries will be able to show a multi-million dollar loss that is somewhat less than it would have been otherwise.
However, in the real world, the figures on paper are worth little more than the paper itself. It is just as impossible to save money by spending an extra $1.5 million as it would be to expect the 80 cents each bus passenger drops in the fare box to cover the cost of taking him where he wants to go.
The city has to make up the difference between what it charges for its transit rides and what the system costs by adding the amount to the general tax bill. This part is understandable. A city the size of Winnipeg needs a public transportation system, and the people who need the system the most cannot afford to pay what the actual transportation costs. the people who can afford to pay the actual costs have enough political clout to persuade their elected representatives to maintain the subsidy. A better arrangement would be to set the bus rate at a break-even point and issue subsidy cards on an ability-to-pay basis.
Subsidized bus fares can be defended. Subsidized bus building cannot. Flyer Industries cannot exist on Winnipeg Transit business alone. It must compete on a continental basis. Everyone knows that Flyer has not been doing too well lately.
It is of passing interest that few horror stories about Flyer buses have surfaced from Winnipeg Transit. A small catalogue is needed to list all the other transit systems who have been less than satisfied with Flyer machines. Calgary itself is on the list, having once bought a batch of Flyer buses whose gasoline tanks had an unfortunate habit of shifting as much as eight feet whenever the buses were started or stopped. It is possible that Winnipeg Transit has had just as much trouble as other customers but has not complained mainly for political reasons. It would not do to pay more than is necessary for buses that do not work. At least it would not do to let such information spread itself around.
Continental competition is not at issue. What is at issue is the right of the city of Winnipeg to get the best possible deal on the buses it needs, and for the province, if it feels that a transportation subsidy is necessary, to pay that subsidy regardless of the make of the bus that is purchased.
What makes matters worse is that the province continues to insist on exclusive rights to sell to Winnipeg Transit even though it decided, some time ago, that Flyer Industries is a disaster of such magnitude that the company must be sold, or dismantled.
Not one of the three governments have had their hands on Flyer Industries have ever completed a simple study on the value, to the province, of the jobs Flyer has created. Such a calculation is essential to the determination of the future of the public bus plant. Whatever economic value the jobs have this should be the maximum subsidy given to the company.
If Flyer cannot make it with such a limited subsidy, it is not worth keeping alive. Until a rational approach to Flyer is adopted, Winnipeg Transit, and the taxpayers of the city and the province should not be held hostage to the plant.