NEWS
05/26/2017 14:32 EDT | Updated 05/27/2017 10:41 EDT

No injunction to stop government shut down of Saskatchewan bus company: court

REGINA — A Court of Queen's Bench judge says the Saskatchewan government has the authority to shut down the provincial bus company at the end of May.

Justice Lian Schwann has dismissed an application from the union that represents Saskatchewan Transportation Company workers for an injunction to stop the government from shutting down the Crown-owned bus service.

"Funding decisions concerning the allocation of public financial resources fall within the policy-making function of the government as a whole," Schwann wrote in the ruling released Friday.

"These sorts of decisions are of a political nature and considered immune from judicial review."

Schwann said "there is no statutory provision or other legal instrument which mandates STC to continue to operate in perpetuity."

The judge also said the decision to wind up STC and sell its assets does not meet the definition of privatization because it's a wind-up of operations, not a sale to the private sector.

"There is no evidence before this court of a plan to transfer STC's business operation or controlling interest to the private sector," Schwann wrote.

"To the contrary, the steps taken thus far manifest a dismantling of STC's operation but not a divestiture of its assets or transfer of operations."

The Saskatchewan government announced in the March budget that it would close STC as part of an effort to tackle a $1.3 billion deficit.

The ruling notes that in the 2015-2016 fiscal year, STC reported a net loss of $13 million. It said the combination of fewer riders with cost increases has reached the point where the STC subsidy on a per passenger basis is forecast to be $94 this year, up from $25 just 10 years ago.

The government has said STC would need $85 million over the next five years to keep operating.

The Amalgamated Transit Union had argued that the government didn't follow the Crown Corporations Act when the closure was announced and that the closure would have an immediate and dramatic harmful effect on the employees and their families.

The closure puts 224 people out of work.

Union president Eric Carr said Friday that the court ruling is disappointing.

"What brought us this decision was a bad decision in the first place by the Sask. Party to go back on their election promise not to touch any Crown corporations, including STC," said Carr.

"Moving forward after the 31st of May next week, the highway traffic board has not approved any operating authorities to anyone else, so there's going to be a period here where the people of rural Saskatchewan have no bus transportation. And it's frankly outrageous to shut down a service and not have anything in place to take over that service."

The union also argued that shutting down STC will have a disproportionate impact on low income riders who make up 70 per cent of bus riders.

Carr said the union's lawyers are reviewing the ruling to see if an appeal can be made.

Joe Hargrave, minister responsible for the Saskatchewan Transportation Company, said the government is pleased with the decision.

"Today's judgment by Justice Schwann has affirmed the legality of our government's actions regarding the wind-up of STC. Wind-up efforts will continue accordingly," Hargrave wrote in a statement emailed to media.

"We are also pleased that the court supported our government's decision to define the word 'privatize' in legislation."

The Saskatchewan government passed legislation this spring that allows it to sell up to 49 per cent of a Crown corporation without the move being considered privatization.

Premier Brad Wall has said the legislation guarantees the government will always retain majority ownership of the utilities.