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Passengers arrive in Winnipeg on a Greyhound bus.

Jimmy Jeong/Jimmy Jeong/AP

Greyhound Canada plans to halt bus service in Manitoba and northwestern Ontario and is warning that the bulk of its Canadian network also faces shutdown unless governments inject millions in grants and relax the rules on serving rural areas.

Closing regional operations "in the middle of Canada" would affect about 150 communities in Manitoba and up to 80 stops in northwestern Ontario, including Kenora, Thunder Bay and Wawa, although Sault Ste. Marie will be spared, Greyhound senior vice-president Stuart Kendrick said in an interview Thursday.

"We feel that the federal government needs to take a leadership role to address the issue of rural Canada and the continuing losses that we've incurred for a long period of time. We need short-term assistance," Mr. Kendrick said.

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But John Baird, the federal Transport Minister, said he has met with Greyhound and rejected that idea.

"I think their actions are heavy-handed. It's an attempt to bully the provinces of Manitoba and Ontario," Mr. Baird said in an interview, arguing the issue is strictly a provincial matter.

"This is a shakedown," he said. "Greyhound isn't asking for a loan. They're asking for a direct subsidy. These guys are trying to get public money."

Greyhound, the country's largest intercity bus line, said it is also reviewing its operations in British Columbia, Alberta, Saskatchewan, Yukon and the Northwest Territories.

The recession has sapped demand for both passenger and parcel service, and there's also competition from airlines and railways, Mr. Kendrick said. The Burlington, Ont.-based bus line is seeking grants from Ottawa and several provinces, requesting a total of between $15-million and $20-million within the next 18 months.

Greyhound runs its buses as far east as Montreal, and has partners that operate their own coaches into Quebec City and in Nova Scotia and New Brunswick. While Greyhound's routes between major cities are mostly profitable, bus operators are forced by provincial regulations to subsidize money-losing service to small-town Canada, Mr. Kendrick said.

Greyhound's history in Canada dates back 80 years. Both Greyhound Canada and Dallas-based Greyhound Lines Inc., which operates in the U.S., are owned by Scottish-based FirstGroup PLC.

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Ontario Transport Minister Jim Bradley said Greyhound Canada has served notice to withdraw services on Dec. 2 in northwestern Ontario, but he noted the bus operator is working with other companies to ensure replacement services. "We are hopeful that another private-sector carrier will seek the opportunity to provide bus service in this corridor," Mr. Bradley said in a statement.

But Jim Devlin, the president of bus operator Coach Canada, said his firm isn't interested in entering a money-losing region. Mr. Devlin also complained that the Ontario government will launch bus service this weekend between the Niagara region and Burlington, hurting both Coach Canada and Greyhound.

In Manitoba, Greyhound's plans to shut down in that province in early October caught the government off guard. "It's an evolving issues and we're still sorting through it," said Conservation Minister Stan Struthers, speaking for Manitoba Transport Minister Ron Lemieux. "We're very concerned about loss of service in those rural areas."

Mr. Struthers said Greyhound met with the Manitoba government on Tuesday, but gave little indication of its demands.

Greyhound moved its Winnipeg operations into a new leased $6.9-million depot nearly three weeks ago, situated next to the city's airport. Inside the building yesterday, passengers were floored by the company's announcement.

"It could be quite bad for us," said 22-year-old tree planter Jessica Nicol. "We go to a lot of small, remote places by bus to work. I'm not sure how we would get there without Greyhound. That's an expensive cab fare."

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Marla Stanley, who commutes by Greyhound once a week between a job in Winnipeg and a home in Erickson, Man., was contemplating a new line of work yesterday. "It's a three-hour drive, but I've got no money for a car," she said. "If this happens, and there are no buses from Erickson, the only way I'll get out of town is by hitchhiking."

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