Electrification of Canadian school buses is progressing far too slowly. A new report by Dunsky shows how government policy leadership could make a difference

Canada risks missing a major market electrification opportunity in e-school buses without aggressive action, according to a new report released by the Canadian Electric School Bus Alliance.

The report, prepared by Dunsky Energy + Climate Advisors, is titled Pathways for Canadian Electric School Bus Adoption. It concludes the current business case for school bus operators to switch to zero-emission is too weak without more federal government support.

“Electric school buses bring numerous benefits to communities, including direct health benefits for children, and can serve as a highly visible showcase of transportation electrification opportunities,” said Jeff Turner, director of clean mobility at Dunsky, in a press release.

“While barriers to adoption exist, our research found that there are numerous actions that can be taken to remove barriers and support operators in increasing the number of electric school buses on the road.”

Formed in 2022, Canadian Electric School Bus Alliance (CESBA) is a nationwide collective led by Équiterre and Green Communities Canada. The organization has a mandate to distribute knowledge, influence policy and promote the adoption of electric school buses (ESBs).

ESBs are still 1.5 to 2.5 times more expensive than diesel buses over their 12-year lifespan, according to the report. However, despite their high capital costs, electrifying school buses is necessary.

They are a key component in reaching the government’s emission reduction goals. As well, they will help remove issues associated with road transportation, such as poor air quality — a huge concern given that ESBs carry young children — and noise pollution.

The report recommends certain measures for the federal government to take to address adoption issues. These include:

• Establishing Canada-wide electric school bus (ESB) sales target;
• Extending federal funding programs and ensuring they are easily accessible;
• Collaborating with provinces to overcome barriers within the supply chain; and
• Deploying education and awareness campaigns so that bus operators understand the multitude of benefits that ESBs.

Establishing an ESB sales target

The report found the government should have a nationwide sales target that will ensure there is sufficient ESB supply.

CESBA wants all Canadian school bus fleets to be fully electric between 2035 to 2040. There are approximately 45,000 to 50,000 school buses in circulation in Canada today.

But only 500 of these buses are electric, said Turner during a conference on “Exploring Pathways to 100 percent Electric School Bus Adoption.” The conference was the first of a series hosted by CESBA that took place from May 30 to June 8.

This number is far below what they could or should be to align with government emission reduction goals.

The Dunsky report states Canada needs to transition to electric buses at a rate of at least 2,850 e-buses per year starting in 2023, for the next 17 years. This pace would allow the country to reach a total of 48,450 electric buses by 2040.

But it does not seem likely this will happen . At least, not without rapid intervention and a specific sales target for ESBs in place.

“The government of Canada does not have specific objectives for the electrification of school buses,” said Marc-André Viau, director of government relations at Équiterre during the conference. “It is a provincial responsibility.”

School buses do, however, fall under the federal government’s 35 per cent new medium- and heavy-duty vehicle (MHDV) sales being ZEVs by 2030 and 100 per cent by 2040, where feasible, said Viau.

“Given that this is only 100 per cent of new sales by 2040, and not 100 per cent of the fleet converted to electric by 2040, this target falls short of other leading jurisdictions,” reads the report.

Extending federal financial support

The report identifies high upfront costs as a significant long-term barrier to the adoption of ESBs in the near future. As mentioned, ESBs can be 1.5 to 2.5 times more expensive than their non-electric counterparts.

To address the cost challenge, the report calls for more funding from the federal government. Funding should cover the upfront purchase of ESBs, as well as the purchase and installation of charging infrastructure.

It estimates at least $1.25 billion in investments must come from government and stakeholders in 2023 to achieve MHDV targets.

Currently, the federal government provides support through the Zero Emission Transit Fund (ZETF) and the Zero-Emission Vehicle Infrastructure Program (ZEVIP). In addition, the Canada Infrastructure Bank offers direct loans through the Zero-Emission Buses Initiative.

These funding initiatives contribute to reducing the payback period for ESBs. For Type C buses, the payback period is 4.4 years with current federal funding, compared to 19.3 years without any funding or additional revenue.

Participation in the Clean Fuel Regulation credit and vehicle-to-grid programs, such as the one in Prince Edward Island, will allow bus operators to generate revenue that further shortens the payment period to just 2.7 years.

The ZETF funding is expected to end in 2025/2026 and ZEVIP funding in 2027. The report recommends the government extend these existing federal funding programs.

Additionally, the report emphasizes the need to simplify the funding application process. The current structure of the ZETF program creates challenges in planning vehicle replacements and determining the necessary capital investment. The approval process can be time-consuming, take several months, and can also be burdensome or potentially discouraging for some fleets.

“The federal government should consider offering point-of-sale rebates on ESB purchases to provide more certainty to fleet operators as they build their budgets,” suggests the report.

Federal and provincial government collaboration

In addition to federal funding, some provinces have their own subsidies to help bus operators make the switch to ESBs.

Prince Edward Island wants to electrify 100 per cent of its public school bus fleet by 2030. The provincial and federal governments are each contributing $6.3 million towards the purchase of ESBs in the province. The money is coming through the Green Infrastructure stream of the Investing in Canada infrastructure plan.

In Quebec, since April 2021, all new school bus purchases must be electric. To achieve this Quebec is providing a provincial subsidy of $125,000 for ESBs. The province is aiming to have 65 per cent of school buses in use be electric by 2030.

And British Columbia is developing new zero-emission vehicle targets for MHDVs. The province will be aligned with California’s objectives (where all new trucks and buses should be electric by 2045).

In B.C., financial support for ESBs ranges from $100,000 to over $200,000 per vehicle through the Ministry of Education and Child Care and Clean BC.

Taking full advantage of these subsidies will only do the job, however, if there is also an adequate supply of electric school buses. On this point, the report warns that current ESB manufacturing capacity is insufficient to meet the level of demand that will be required to meet “near-term ESB sales requirements under a 100 per cent by 2035 target.”

To get around this issue until supply expands, it suggests that the federal government collaborate with provinces to temporarily extend the retirement age of diesel school buses.

Viau says the federal government can also play a role as procurement coordinator to identify potential pitfalls and address standardization and regional disparities to ensure ESB battery supply across the entire country.

Deploying education and awareness campaigns

To adopt ESBs, provinces and bus operators need guidance and information on how to navigate the transition.

“We need to provide support to each province and give the necessary tools to operators to understand the mechanics and resources that they can rely on,” says Viau.

The federal government has the Zero-Emission Vehicle Awareness Initiative (ZEVAI) – medium- and heavy-duty vehicle stream. The report says ZEVAI could be leveraged to spread awareness and provide funding for these types of campaigns.

There are also awareness and education campaigns that include charging infrastructure too, adds Dunsky’s Turner during the conference.

“More and more, we’re receiving questions from fleet operators who especially need help with charging infrastructure,” says Turner.

“It’s not too complex. But when you start seeing a large number of vehicles in the same building, there’s a certain need for education in terms of best practices for recharging on the part of engineers, installers and fleet operators to know what it’s going to take to make this important transition.”