Buying a bus and motorcoach operator in Canada

Buying a coach company is closer to buying a regulated fleet than buying a storefront. You take on expensive vehicles, drivers who must hold the right licence class, and a standing with a safety regulator that you will inherit or have to rebuild. The first question is not price but whether you can run the service at all: what the regulator requires of the owner, what the clients require of the operator, and what the fleet will cost over the next several years. This guide is for the person evaluating, not negotiating.

What a sound operator looks like

Look for evidence you can verify rather than a pitch. Booking history that shows clients returning, and records for each coach that show inspections done on schedule. A clean carrier record, a staff of drivers who have stayed, and replacement dates for the fleet that are spread out instead of falling together. None of this guarantees a good purchase, but its absence tells you where to dig. Read the seller’s own account against the records, and ask a mechanic you trust to see some of the coaches.

What the seller may not volunteer

A seller has reasons to present the business well, so ask directly. Ask how many coaches are due for replacement soon, and what deferred repairs exist. Ask whether any client has reduced bookings or gone to a competitor, whether any driver has said they plan to leave, and whether any inspection, collision or conviction on the carrier record has not been explained to you. Ask whether anything about the sale needs a regulator’s approval that the seller has not yet sought. Write the answers down and test them in diligence. A seller who answers every question the same way each time is easier to rely on than one whose account shifts, and a refusal to answer is itself information about what to check.

What you must qualify for yourself

Some requirements attach to the buyer rather than the business. In British Columbia, the Passenger Transportation Board says a licence transfer needs an application from both the transferor and the transferee, and it lists a balance sheet among the transferee’s attachments for regular transfers (personal net worth statements if the transferee is a sole proprietor or partnership). Federally, subject to the regulations, no person or body may operate an extra-provincial motor carrier undertaking except under a safety fitness certificate issued by a provincial authority or an analogous document prescribed by the regulations (Motor Vehicle Transport Act, s.7(1)). Ask each authority what it will require of you, and how long that takes, before you sign anything binding.

Drivers and licence classes

Transport Canada says the National Safety Code has 16 standards, ranging from commercial driver licence requirements to carrier facility audits, so driver qualification is part of the regulatory picture and not only an employment matter. Check each driver’s licence class against the vehicle they drive. Québec’s SAAQ, for example, lists a separate class 4B licence for minibuses and small buses up to a seating capacity it sets. Ask how the operator recruits and trains drivers, what happens to bookings if two or three leave, and whether the seller has records of hours worked, since Transport Canada notes that federal regulations under the Motor Vehicle Transport Act govern hours of service for commercial vehicle drivers of extra-provincial carriers.

Fleet cost after you own it

The purchase price is only the first outlay. Ask for a schedule of the capital the fleet will need in the first several years, based on each coach’s age, mileage and condition, and compare it with the earnings the business actually produces. A fleet that is cheap to buy but due for replacement all at once can leave a new owner short of cash in the first years. Ask the seller what the last replacement cost, how it was paid for, and whether any coaches are under lease or finance agreements that you would take over.

Confirm the regime before you commit

In Ontario, buses above a seating capacity the province sets, plated in Ontario, the United States or Mexico, need a CVOR certificate, subject to exceptions Ontario lists (such as buses used for personal purposes without compensation), and Ontario says buses plated in another Canadian province or territory need a safety certificate from that province or territory instead. Other provinces have their own rules, and the federal rules cover extra-provincial service. Put the question to the authority in writing: what do I need to hold, and when, if I buy this company?

• Which authority issues the licence or certificate, and what it requires of a new owner
• The age and replacement dates of each coach, and any deferred repairs
• The carrier safety record, and whether every entry on it has been explained
• The driver bench: licence classes, tenure and plans to stay on
• Client concentration, and whether key clients know about the sale