CUTA sent a letter to Ministers LeBlanc, Ng, Duguid, and St-Onge, urging the government to exempt buses and bus components from proposed retaliatory tariffs. Bus manufacturing relies on a specialized, integrated supply chain, and since transit vehicles are taxpayer-funded, tariffs would amount to a tax on government itself. They would raise transit costs, threaten jobs, and slow Canada’s transition to zero-emission fleets.

“Dear Minister LeBlanc,

I am writing to you on behalf of the Canadian Urban Transit Association (CUTA) to express our serious concerns regarding the potential inclusion of buses and bus components in a planned phase two of Canada’s retaliatory tariffs on imported U.S. goods. These tariffs will have unintended and counterproductive consequences on public transit systems, the Canadian economy, and the affordability of transportation for millions of Canadians.

Canada is home to major bus manufacturers, including New Flyer in Manitoba and Nova Bus in Quebec, as well as a critical network of component and parts suppliers. The transit industry relies on an integrated North American supply chain to produce and procure buses, with funding for these purchases coming from federal, provincial, and municipal governments. Imposing retaliatory tariffs on buses and their components would mean that the government is effectively imposing a tax on itself, increasing procurement costs for publicly funded transit agencies and reducing the purchasing power of investments in public transit infrastructure.

The impact of these tariffs would be significant and widespread, including:

• Increased Costs for Public Transit: Municipal and provincial transit agencies will face higher procurement costs, reducing the number of new buses they can purchase and delaying the transition to low-emission and zero-emission fleets.
• Economic Disruption in Manufacturing: Canadian bus manufacturers and suppliers will be placed at a competitive disadvantage, potentially leading to job losses and a weakened domestic manufacturing sector.
• Threat to Canadian Manufacturing Jobs: The Canadian bus manufacturing sector supports thousands of skilled workers whose jobs depend on a stable and competitive marketplace. The imposition of retaliatory tariffs could lead to workforce reductions, facility closures, and an erosion of Canada’s industrial base in this crucial sector.
• Reduced Affordability for Canadians: Public transit is a key affordability measure for millions of Canadians. Higher costs for agencies may result in service reductions or fare increases, disproportionately affecting lower-income individuals, seniors, and students.
• Negative Environmental and Productivity Outcomes: Investments in public transit are crucial to reducing congestion, cutting emissions, and improving economic productivity. Increased costs due to tariffs would slow progress toward these national priorities.

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.
I would welcome the opportunity to discuss this matter further and provide any additional insights on the implications for the transit industry. Please do not hesitate to contact me should you have any questions.

Sincerely,

Marco D’Angelo
President and CEO
Canadian Urban Transit Association