The Canadian Urban Transit Association (CUTA) has called on the government to exclude buses and bus components from the second phase of proposed retaliatory tariffs on imported US goods.
In a letter addressed to Ministers Dominic LeBlanc, Mary Ng, Rob Duguid, and Pascale St-Onge, CUTA outlined concerns about the economic and operational impact such tariffs could have on Canada’s transit sector.
The association highlighted that Canada’s bus manufacturing industry is deeply integrated with North American supply chains, relying on cross-border trade for essential components. Major manufacturers such as New Flyer in Manitoba and Nova Bus in Quebec source parts from suppliers across Canada and the United States.
Given that transit vehicles are largely funded through federal, provincial, and municipal programs, imposing tariffs on buses and their components would effectively increase costs for public agencies, acting as a financial burden on government-funded projects.
CUTA warned that these tariffs could lead to increased procurement costs for municipal and provincial transit agencies, reducing their ability to purchase new vehicles. This, in turn, could delay fleet renewal plans, including efforts to transition to low-emission and zero-emission buses. The association also expressed concern that higher costs could force agencies to cut services or raise fares, making public transit less affordable for many Canadians.
The potential economic fallout extends beyond transit agencies, with CUTA cautioning that tariffs could put Canadian bus manufacturers and suppliers at a competitive disadvantage. This could lead to job losses and a weakened domestic manufacturing sector, affecting thousands of workers who rely on the industry. Facility closures and disruptions to supply chains could further destabilise an already challenging economic landscape.
In addition to economic concerns, CUTA emphasised the environmental implications of higher transit costs. Public transit plays a role in reducing congestion and emissions, and increased costs could slow progress toward sustainability targets.
Marco D’Angelo, President and CEO of CUTA wrote:Public transit is a vital service that enhances economic stability, connects communities, and improves the quality of life for Canadians. At a time when governments at all levels are making historic investments in transit infrastructure, it is essential that policies support, rather than hinder, the growth and sustainability of the sector. For these reasons, we strongly urge the Government of Canada to exempt buses and bus components from a planned phase two tariff package.
The letter urged the government to reconsider the inclusion of buses and bus components in the tariff measures, stressing the need to support rather than hinder transit infrastructure investments. CUTA also expressed its willingness to engage in discussions with policymakers to outline the potential consequences for the industry.
As the government reviews its approach to trade measures, transit agencies and industry stakeholders will be watching closely to see how these concerns are addressed. The Canadian government has currently postponed the implementation of the second phase of retaliatory tariffs on US goods until 2 April 2025.
