The $400-million loan to provincial bus operators is the latest investment from the Canada Infrastructure Bank’s $1.5 billion zero-emission bus initiative to assist in the transition from diesel transit in Canada
The Canada Infrastructure Bank (CIB) and the Quebec-based Bus Carriers Federation have announced an agreement that will see the CIB invest up to $400 million for the purchase of 4,000 electric school buses in Quebec over the next five years.
The investment is a long-term loan that is meant to help bus operators cover the vehicles’ higher upfront costs and charging infrastructure expense and help accelerate the shift to electric school buses in the province.
“It’s a loan that’s based on the expected savings that the buses are going to generate over their life,” explains Charles Todd, managing director of investments at CIB, in an interview with Electric Autonomy Canada.
“So if you think about running a diesel bus for 10 years, you’re going to spend a certain amount of money on diesel, [but] running an electric bus for 10 years, you’re going to spend a lot less money on electricity. So the difference between those two numbers is how [much] we’re repaid.”
The Bus Carriers Federation, which represents over 650 private companies across the passenger transportation sector, will work as the main facility where school bus operators can place orders to take advantage of the loan.
“We want this [funding] program to be accessible to all our members — from small, medium to big companies,” says Martin Bureau, assistant general director and communication director of the Bus Carrier Federation in an interview with Electric Autonomy. “So, our role is to, first, do an analysis and then…be an assistant to bus carriers to facilitate the access to the CIB funding.”
The bus operators that receive the loans will be responsible for repaying them over the life of each purchased bus.
The agreement between the CIB and the federation is expected to close by next March.
Quebec’s push for more electric buses
The financing from CIB comes in addition to new provincial government funding for electric school buses. Earlier this year, Quebec’s premier François Legault pledged to invest $250 million over three years to electrify 65 per cent of the province’s school bus fleet.
Since Nov. 1, the province has also made it mandatory for all bus operators to switch to an electric vehicle once one of its traditional diesel buses reaches end-of-life.
“Carriers don’t have any choice right now but to take the steps to [gradually] transform their fleet,” says Bureau. “So, they will really need [financial] support for more than five years because the prices of the ZEBs [zero-emission buses] are more than three times the price of regular buses… That’s why the funding the CIB is bringing is interesting because it will facilitate the turn [to electric].”
While the initial costs to purchase electric buses are higher compared to diesel buses, CIB says, bus operators can expect to see substantial savings later on, as operating costs can be as much as 35 per cent lower than their diesel-engine counterparts.
The electrification of school buses will also bring substantial environmental benefits. According to CIB, they can save around 20 tonnes of greenhouse gas emissions per year. Transitioning 4,000 diesel buses to electric is expected to reduce emissions by 81,000 tonnes annually.
“We are proud to collaborate with an innovative partner to provide Quebecers with greener and more sustainable transportation for students, parents and school staff for generations to come,” says Ehren Cory, CEO of CIB in a press statement. “With this investment, we are sending a clear signal to other potential partners across the country: we want to sign similar partnerships with you to make a difference in the quality of life for Canadians.”
Growing investment in zero-emission transit
This latest CIB investment flows from a $10-billion growth plan announced in October 2020. In that plan, the CIB committed $1.5 billion to zero-emission buses (school and transit) and related charging infrastructure over the next three years.
Previous investments under this program include $30 million to support the purchase of 280 electric school buses in British Columbia and a $15-million partnership with Autobus Séguin in Quebec to purchase 131 zero-emission buses.
“The way our program works…, whoever is ready to take advantage of our financing they contact us…and then we start a process with them where we look at their plan and we assess if they actually are ready to buy the busses,” says Todd.
“We don’t have any regional allocation necessarily. We’re looking at getting the money out in the most effective way.”
That said, CIB is a pan-Canadian institution, so expect more initiatives in different locations.
“We expect that to continue and on lots of different scales,” says Todd. “There are still lots of big municipalities out there that I think, from a transit perspective, need our support. There are thousands of diesel school buses across the country now that are going to be coming up for replacements and we’re hoping to be able to help as many of those as we can transition.”