Union asks province for $7M loan to help Winnipeg Transit buy 20 electric buses

The union that represents transit workers wants the province to help Winnipeg Transit beef up its fleet with more electric buses through a $7-million interest-free loan — money the NDP suggests the government could draw from funds earmarked for climate change initiatives.

In what Amalgamated Transit Union 1505 calls a "pay as you save" partnership, the loan would help transit cover capital costs associated with adding 20 more electric buses to its fleet, said union president Aleem Chaudhary.

"We believe that the PAYS model offers a chance for the government to create jobs in Manitoba, while working to reduce our emissions at no long-term cost to government," Chaudhary said in a statement.

"From our perspective, this is a win-win scenario for all parties involved and lays a foundation for sustainable prosperity in Manitoba through targeted job creation, while also reducing our reliance on fossil fuels."

Last month, a joint report from the city and province recommended Winnipeg Transit buy 12 to 20 electric buses, then gradually increase that number to as many as 200, until its entire fleet is battery-powered.

The upfront costs of the electric buses represent a significant barrier, the union president said, but once they're on the road he estimates they cost $62,000 less per year than the typical diesel-fuel bus.

Loan paid off in 6 years

Chaudhary projects that using those savings, Winnipeg Transit would pay off the loan in six years. Once the loan is paid off, additional savings could go toward improving transit services, he said.

"After that [loan is paid], it's money in the bank and money that can be used to improve the infrastructure, and to be able to take care of reducing the fares and generally add more buses, add more security," he said at a press event outside the rapid transit corridor at Osborne Station.

The figures are based on estimates from University of Manitoba engineering Prof. Nazim Cicek's research, which builds on the assumption that each electric bus would cost $850,000 compared to $500,000 for traditional buses, Chaudhary said.

Phasing in electric buses would also create more jobs at local bus manufacturer New Flyer Industries and increase revenue for Manitoba Hydro, he said.

In December, Manitoba Hydro announced it would seek an "exceptional" 7.9 per cent rate increase annually until 2024. That request is being reviewed by the Public Utilities Board as the Crown corporation tries to pay down its long-term debt of more than $16 billion while paying for the Keeyask hydroelectric development and the Bipole III transmission line.

'Sensible solution'

Functional Transit Winnipeg chairperson Joseph Kornelsen supports the loan for new buses as a "sensible solution" to problems facing Winnipeg Transit, which he says is "way behind."

Winnipeg has one bus on the road for every 1,100 people, compared to cities such as Quebec City, Edmonton and Ottawa that have approximately one bus for every 900 citizens, Kornelsen said.

"That's a huge gap that we need to fill in Winnipeg and finding creative solutions to buying more buses is a great way to address that need for transit riders," he said.

Kornelsen said Alberta, Ontario and Vancouver have collectively invested $1 billion in transit infrastructure recently, including expanding fleets of electric buses.

Electric buses should not be a partisan issue, he said.

"Here in Manitoba, we're seeing reductions in the province's support for operating our transit network," he said. "At a time when we should be taking serious action against climate change, the government of Manitoba should be stepping up its commitment to help Manitobans live a more sustainable, lower greenhouse gas lifestyle."

'Kicking and screaming'

Rob Altemeyer, NDP environment critic and MLA for Wolseley, said adding 20 electric buses in Winnipeg would be positive for the province, city and Winnipeg Transit.

"I don't know what we're waiting for," Altemeyer said Thursday.

"The [Premier Brian] Pallister government can only work so much longer to avoid a really good idea. We will drag them kicking and screaming, if necessary, into this century."

He said it would make sense for the province to use some of the $66 million it received from the federal government for climate change measures to fund more electric buses and related charging infrastructure.

Bus electrification a 'key priority': Minister

The province will not be exempting public transit vehicles from its incoming carbon tax; transit is expecting $1.2 million in additional operating costs to annually as a result.

Altemeyer says that works out to about $2,000 in additional cost per Winnipeg Transit bus in the first year. There are 623 buses in the fleet, according to the city.

On Thursday afternoon, Manitoba Sustainable Development Minister Rochelle Squires said bus electrification is a "very high" priority for her department, but they do not have a timeline for implementation. She called the transit union's proposal "interesting."

"We are looking at several options right now.… [The electrification of Winnipeg Transit] is something that our government sees as a key priority for transitioning to a low-carbon future." 

Chaudhary says if Winnipeg Transit were to replace its entire fleet with electric buses it could save $38 million per year.

"It will work, but it has to be given a chance," he said.

Amalgamated Transit Union 1505 represents more than 1,400 transit workers in Winnipeg and Brandon.