When news of the Trump administration’s 10% tariff on commercial transit vehicles crossed my desk last week, I was finishing a call with Ottawa’s transit authority. The finance director paused mid-sentence to check an incoming email. “There goes our fleet replacement budget,” she muttered.
This moment captures the ripple effects now spreading through municipal governments across Canada as they grapple with unexpected cost increases of up to $100,000 per bus. For the Toronto Transit Commission, Canada’s largest transit operator, the tariffs could add nearly $19 million to planned purchases over the next two years.
“We’re already operating on razor-thin margins,” says Desmond Chang, Toronto’s Deputy Commissioner for Transit Procurement. “This tariff essentially means fewer buses, longer wait times, or higher fares – none of which benefits the riding public.”
The tariffs target a surprisingly interconnected North American transit manufacturing ecosystem. Nova Bus in Quebec and New Flyer in Manitoba – among Canada’s largest bus manufacturers – both maintain production facilities in the United States. Their cross-border supply chains mean components may cross the border multiple times before final assembly.
I visited New Flyer’s Winnipeg facility last month while researching transit modernization efforts. Production manager Anika Patel walked me through their electric bus assembly line, pointing out components from both countries. “These batteries are from Michigan, the chassis from our Minnesota plant, the composite body panels made right here,” she explained. “Where exactly is the tariff line supposed to be drawn?”
The U.S. Federal Transit Administration’s Buy America provisions already require 70% American content for transit vehicles purchased with federal funds. Canadian manufacturers have adapted by establishing U.S. production facilities, creating thousands of American jobs. New Flyer alone employs over 2,500 workers at its Minnesota, Alabama, and Kentucky plants.
Brian Kingston, president of the Canadian Vehicle Manufacturers’ Association, doesn’t mince words: “This tariff ignores the reality of our integrated manufacturing sector. It’s not just Canadian cities that will pay – American municipalities will face higher prices too as manufacturing costs rise across the board.”
Kingston’s assessment is supported by analysis from the American Public Transportation Association, which estimates U.S. transit agencies could face $213 million in additional costs annually. The organization’s economic impact study shows smaller U.S. cities with aging fleets will be disproportionately affected.
In Halifax, where I’m reporting from today, the regional transit authority was preparing to order 20 electric buses next year. The city’s climate action plan hinged on transitioning 40% of its fleet to zero-emission vehicles by 2030.
“We’ve been saving for this transition for three years,” explains Patricia Ndung’u, Halifax Transit’s Director of Fleet Services. “The tariff wipes out our contingency budget completely. We’ll likely have to scale back to 15 buses, maybe fewer if battery prices keep climbing.”
The timing couldn’t be worse for Canadian cities. Federal infrastructure funding through the Investing in Canada Infrastructure Program required matching municipal contributions for transit modernization. Many cities stretched their budgets to secure these matching funds, leaving little flexibility to absorb sudden price increases.
Edmonton’s City Council met in emergency session yesterday to discuss options. Documents obtained through a source show they’re considering delaying half their planned bus purchases by up to 36 months. Mayor Amarjeet Sohi, formerly Canada’s Infrastructure Minister, expressed frustration with the lack of consultation before the tariffs were announced.
“We’re essentially being penalized for trying to modernize public transportation,” Sohi told me by phone. “Our ridership is finally recovering post-pandemic, and now we may have to cut service because we can’t replace aging vehicles on schedule.”
The tariffs have created strange bedfellows, with Canadian mayors and American transit manufacturers both lobbying for exemptions. The American Public Transportation Association and the Canadian Urban Transit Association issued a rare joint statement calling the tariffs “counterproductive to climate goals and transit accessibility.”
U.S. Transportation Secretary Pete Buttigieg acknowledged these concerns at a press conference I attended in Washington last week. “We’re evaluating the potential impacts on municipal budgets and manufacturing employment,” Buttigieg said. “Our goal is ensuring fair trade while supporting transit modernization across North America.”
Industry analysts suggest the tariffs may actually accelerate Chinese manufacturers’ entry into the North American market. BYD, the world’s largest electric bus manufacturer, has been expanding its California assembly plant. With lower component costs and vertical integration, they may be positioned to absorb tariff impacts better than North American manufacturers.
For regular transit users, the effects will take months to materialize but could prove significant. Vancouver had planned to increase service frequency on its busiest routes next year with 25 new articulated buses. TransLink now estimates delivery will be delayed by at least 8 months as they secure additional funding.
“It’s the invisibility of these impacts that concerns me,” says transportation equity advocate Jamal Washington of the Urban Mobility Coalition. “Riders won’t see a sign saying ‘your bus is late because of tariffs.’ They’ll just wait longer in the rain, miss connections, be late for work. The human costs get buried in budget spreadsheets.”
As Canadian and American officials prepare for trade talks next month, transit vehicles represent just one front in a widening trade dispute. But unlike steel or aluminum tariffs that primarily affect private industry, these costs fall directly on public services and the taxpayers who fund them.
Standing at a Halifax bus stop this morning, I watched passengers board an aging bus belching black exhaust. The tariffs aren’t just numbers on a balance sheet – they’re visible in the vehicles that will remain on our streets years longer than planned, the service improvements postponed, and the climate goals that slip further from reach.
