WINNIPEG, Manitoba - With the promise of government subsidies, Greyhound Canada reportedly has backed off its threat to pull its buses out of Manitoba.

The company issued a statement late last month saying it is working on a deal with the provincial government that will allow bus service to continue.

"Officials will continue to meet and expect to secure the precise details of an agreement in the near future," Greyhound said in its statement.

"Both the government and the company agree that some combination of direct investment and reduction of service will be required."

Greyhound had threatened to stop service across Manitoba, and had stopped selling tickets for service beyond Nov. 1, saying it was losing money because of reduced ridership. (See Sept. 15 Bus & Motorcoach News.)

The company also plans to stop service in northern Ontario, and is reportedly reviewing its operations in other western provinces and territories.

The possibility of leaving rural residents without intercity bus service apparently was too much for the Manitoba government.

"It's a necessity and an important mode of transportation for many northerners and rural Manitobans, including people using our health-care service," said provincial Transportation Minister Ron Lemieux.

"We haven't nailed down a specific figure (for subsidies) because we have to continue those conversations with Greyhound going forward. They're coming forward with more information for us."

The government subsidy will be less than the $4 million a year that Greyhound has said it is losing in Manitoba, Lemieux said. That means some routes may be served less frequently and others might be closed altogether, he added.

Both Greyhound and Lemieux are hoping Canadas federal government will put up money as well, but federal Transport Minister John Baird dismissed the idea in September, accusing Greyhound of trying to "bully" the provinces.

Greyhound, the only public travel option in many remote areas, has said it is being hurt by rural depopulation and a weak economy. It has been seeking subsidies, as well as a loosening of federal regulations that require it to operate money-losing routes.

Other provinces do not appear to be as eager as Manitoba to help the company. Federal and provincial transportation ministers set up a working group last month to look at the issue. Following the meeting, Lemieux said some of his counterparts "felt very strongly" bus service should not be subsidized.

Motor Coach Canada, reacting to the transportation ministers reluctance to assist Greyhound, said it would be questioning "whether this same sentiment will be applied to the large subsidies provided to rail passengers and to the residents in urban areas through the subsidies to (public) transit."