Tariffs may stall transit overhaul

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This article was published 22/02/2025 (397 days ago), so information in it may no longer be current.

Should U.S. President Donald Trump make good on his threat of imposing tariffs on Canadian exports into the United States next month, Canadian cities could see the cost of purchasing new transit buses rise well beyond their current prices.

And that would have significant financial implications for the City of Brandon, which is in the midst of replacing its aging Brandon Transit fleet.

“Right now, what we’re looking at is these tariffs could immediately, if they are implemented the way that currently the federal government of the United States is saying, they could raise prices of the buses anywhere from 10 to 40 per cent pretty much overnight,” said Josipa Petrunic, an expert in transit bus manufacturing and zero-emissions transit technologies, and the president and CEO of the Canadian Urban Transit Research and Innovation Consortium.

In a conversation with The Brandon Sun from her home in St. Catherines, Ont., on Friday morning, Petrunic said that transit buses constructed at companies like New Flyer Industries in Manitoba or Nova Bus in Quebec are not 100 per cent Canadian-made. Roughly 30 to 40 per cent of a bus could be classed as Canadian in origin, with the rest from “somewhere else.”

“Not necessarily the U.S., but probably parts from the U.S. and definitely globally,” Petrunic said. “New Flyer for sure. I mean, the number of times that their vehicles cross borders because they have factories on both sides of the border and their supply chain is on both sides.”

Everything from the batteries to the motors to the electronics, the diesel tank, hydrogen tank or the fuel cell stacks — all of these things are not made in Canada, she said.

“And New Flyer vehicles, regardless of the powertrain, do cross the border a lot.”

When asked how many times parts and components in the bus manufacturing process might cross the U.S.-Canada border, Petrunic said it’s difficult to say because private companies keep information like that to themselves.

However, she said it could be as high as a half a dozen crossings through the supply chain, or perhaps more than 20, depending upon the kind of vehicle in question.

“A hydrogen bus and electric bus and a diesel bus have very different component parts. So it could be very high,” Petrunic said. “It could be maybe half a dozen. It’s definitely more than one to two times, so … we’re looking at maybe the thing being slapped on quite a few times for the parts before they actually get to the final forming of the vehicle.”

Earlier this month, Canada obtained a 30-day reprieve from Trump’s threat to impose a 25 per cent tariff on all Canadian imports, with the exception of 10 per cent tariffs on energy. But the tariff threat still looms, and could come into effect as early as March 4 — or even earlier.

As a result, the looming tariff situation could have direct financial consequences for Canadian cities waiting on bus purchases. That includes the City of Brandon, which concluded this year’s 2025 budget consultations with a plan to purchase two new diesel transit buses as a means to start replacing the city’s aging fleet.

“I think certainly there is a possibility that we may see some impact,” said Carla Richardson, the City of Brandon’s director of transportation.

The city plans to replace the fleet by making purchases of new diesel buses two at a time over the next few years, to stagger the life of the new vehicles.

Diesel vehicles have less up-front costs than the more environmentally friendly hydrogen or electric vehicles currently available, and the construction of electric bus infrastructure at this time would be cost prohibitive for Brandon.

However, only one Canadian manufacturing company — New Flyer — will continue to produce diesel transit buses past 2026.

“We’re looking at low-emission diesel,” Richardson said. “We’re not in a position infrastructure-wise or budget wise to be looking at alternative fuels at this time.”

Last January, councillors were told that new bus procurements would cost upwards of $800,000 each, with that cost likely rising to well over $1 million each in coming years. And that was without any artificial tariffs added on to the cost.

The problem, Richardson said, is if costs rise as a result of the tariffs, the city has no financial buffer or contingency plan built into its 2025 budget.

“There is not, not that I’m aware,” Richardson said. “We passed such a tight budget, and tried to keep that mill rate increase as low as possible. There is very little contingency. We have to make sure, when we do prepare the bid opportunities, that we have everything covered off in there to make sure that the taxpayer interest is covered off.”

“The uncertainty is actually the biggest headache,” added Brandon Mayor Jeff Fawcett. “We simply don’t know the cost. I don’t think anybody actually knows yet, even New Flyer.”

If the manufacturing cost of a new diesel bus rises, the city will really only have two choices at its disposal — either find a way to pay the extra costs through a debenture or by raiding the reserves, or the administration cuts back on how many buses it purchases this year.

“We may have to take it back to council,” Fawcett said. “We’ve only budgeted so much. If something did come into place in the next few months, I assume we would go down to get the one (bus) ordered because we have enough budgeted for that. Perhaps we would refurbish another one, versus buying another.

“We’ll know more next week. We have applications in for (federal) transit funding.”

Richardson told the Sun that she expects the city to start moving forward with the bus procurement plan by the end of March or early April. But the threat of tariffs could well affect more than transit procurement this year, as there are other pieces of machinery and vehicles on the city radar right now.

“Given that we procure for the entire fleet department, this is kind of a larger conversation for us,” she said, “because we have a fire truck currently being built in the U.S. and some of our larger pieces of equipment go back and forth.

“So this is likely a larger conversation that’s going to have to happen with council and procurement, because it’s not going to affect just a couple of buses.”

The Brandon Sun attempted to reach a spokesperson for New Flyer Industries on Friday morning, but wasn’t able to talk with a representative by press time.

» mgoerzen@brandonsun.com, with a file from The Canadian Press

» Bluesky: @mattgoerzen.bsky.social