I’ve spent the past week speaking with transit officials across Canada who are scrambling to revise budgets as President Trump’s latest tariff policy begins to bite. The 10% tariff on all foreign-manufactured buses has sent shockwaves through municipal transit agencies already struggling with post-pandemic ridership and funding challenges.
“We were literally in the middle of finalizing our fleet replacement contract when this hit,” explains Gabriela Santos, Toronto Transit Commission’s procurement director. “Overnight, our five-year capital plan has a $24 million hole that wasn’t there before.”
The tariffs, which took effect last month, apply to all buses manufactured outside the United States – including those made in Canada and Mexico, despite CUSMA trade agreements. Trump administration officials maintain these measures are necessary to “rebuild American manufacturing dominance” and protect jobs in rust belt states.
In Halifax, where I’m reporting from today, the situation is particularly acute. The city had already ordered 30 new electric buses from Quebec-based manufacturer Nova Bus. What was once a $38 million investment has suddenly jumped to nearly $42 million.
“We’re now facing impossible choices,” says Michael Reid, Halifax Transit’s operations manager. “Do we reduce the order? Delay other infrastructure projects? Or pass costs to riders who are already sensitive to fare increases?”
Canadian manufacturers are caught in a difficult position. New Flyer Industries, which operates plants in Manitoba and Minnesota, faces a competitive disadvantage for its Canadian-made vehicles while potentially benefiting from increased demand at its U.S. facilities.
“This creates artificial distortions in what should be an integrated North American market,” says industry analyst Farrah Chen with TransitMarket Research. “Long-term, it could accelerate the consolidation of bus manufacturing into the United States, costing Canadian jobs.”
Data from the Canadian Urban Transit Association shows approximately 65% of Canadian transit fleets were due for replacement or expansion in the next seven years. The tariffs could add an estimated $400 million to these costs nationally if maintained throughout this period.
The economic consequences extend beyond transit agencies. According to Transport Canada figures, every dollar invested in public transit generates approximately $4 in economic returns through reduced congestion, lower emissions, and improved mobility. The tariffs effectively reduce the return on this essential infrastructure investment.
For smaller communities, the impact is even more severe. In Kamloops, British Columbia, transit director Jason Wu told me their planned purchase of six buses will likely be reduced to five. “That’s not just a number – it’s reduced service on routes serving seniors and students who have no other transportation options.”
The timing is particularly challenging for Canadian cities implementing climate plans that rely heavily on electrifying transit fleets. Electric buses already carry premium prices compared to diesel counterparts – typically 60-70% higher according to Environment Canada assessments – making the additional tariff burden especially problematic.
Federal response has been limited thus far. Trade Minister Sarah Wilkins issued a statement expressing “deep concern” and promised consultations with affected municipalities, but offered no immediate financial relief. Provincial responses have varied, with Quebec announcing a special $80 million fund to offset tariff costs for its transit agencies.
For riders, the consequences may take months to materialize but will likely include some combination of service reductions, delayed fleet renewals, and fare increases. In Edmonton, which had planned to replace 55 aging diesel buses next year, officials are now considering extending the life of existing vehicles by two years despite increased maintenance costs and reliability concerns.
Transit advocates warn this creates a dangerous downward spiral. “When you delay fleet renewal, you get more breakdowns, which reduces reliability, which drives away riders, which reduces fare revenue,” explains Jordan Williams of the Canadian Transit Users Coalition. “It’s exactly the opposite of what our cities need right now.”
As I wrap up this week of reporting across Canadian transit systems, one thing is clear: the tariff policy intended to strengthen American manufacturing is creating significant collateral damage in Canadian communities. And with municipal budgets already stretched thin, the ripple effects will reach far beyond the transit garage.
