The mini bus, which was carrying five children plus the driver, was about to cross the tracks near the Erindale GO Station when the crossing arm came down, according to Peel District School Board spokeswoman Carla Pereira.
The driver chose not to proceed across the three sets of tracks, judging there was enough space between the bus and the approaching train, Pereira told CBC News.
The train passed very close to the nose of the bus. Pereira said the train was moving slowly because it was close to the station.
The driver and children, all from Green Glade Senior Public School, were unharmed. Pereira said the driver had taken the necessary precautions for railway crossings.
The bus sustained minor damage, caused either by the train or the crossing arm, according to Metrolinx spokeswoman Anne Marie Aikins.
"Why it happened or exactly what happened is still under investigation," Aikins said.
The incident caused delays on GO's Milton line during the morning rush.