Greyhound Canada, long the mass transit lifeline to rural areas, announced Thursday it needs $15 million in public money and an end to regulatory red tape on money-losing routes or it will wind down its operations in Manitoba and northwestern Ontario.

Federal Transport Minister John Baird said the international bus company with the running dog logo is posturing and, in the case of Ottawa, barking up the wrong tree.

"Greyhound is a Texas-based multinational. Their actions are heavy-handed and clearly an attempt to bully the provinces of Manitoba and Ontario," said Baird.

"They're seeking tens of billions of dollars of taxpayers money as a subsidy."

Baird said the regulatory problems are a provincial issue.

"The (federal) government has been out of this for 50 years," he said. "And we've certainly got our hands full with aviation and with Via (Rail)."

Baird was reacting to a release from Greyhound stating it will stop service in Manitoba in 30 days and discontinue it in northwestern Ontario by Dec. 2. It is also reviewing routes in British Columbia, Alberta, Saskatchewan, the Yukon and the Northwest Territories.

"Greyhound can no longer support a national network without the support of the federal and provincial governments," said Greyhound spokesman Karen Gordon in Toronto.

She said the bus line is asking the federal government to convene a meeting with the company and the provinces to make regulatory changes.

Current rules are forcing Greyhound to run trips to unprofitable sites in small-town Canada that can no longer be supported by its money-making routes, bus parcel operations and other money sources, said Gordon.

In the meantime, she said, Greyhound is asking for a $15-million subsidy so it can break even on unprofitable routes over the next year.

Responsibility for inter-city bus transportation is shared. The federal government has overall authority but delegates regulatory power to the provinces.

In Manitoba, Conservation Minister Stan Struthers, speaking in place of absent Transportation Minister Ron Lemieux, said the province will sit down with the company and Ottawa, even if that solution involves money.

"It's not a done deal," said Struthers.

"People living in little communities like Cranberry Portage in northern Manitoba really do depend on this service."

In Ontario, the Ministry of Transport in an email stated it hoped Greyhound's loss would be someone else's gain.

"We are hopeful that another private-sector carrier will seek the opportunity to provide bus service in this corridor," said the ministry.

Former Ontario NDP Leader Howard Hampton, who still represents the riding of Kenora-Rainy River, labelled Greyhound's threat a ploy.

He pointed out that Greyhound is crying poor in Manitoba even though it just built a new terminal at the Winnipeg airport.

"I have no doubt that they're probably losing money in some places, but this is more than anything else a bargaining tactic."

Barry Prentice, a professor at the Transport Institute at the University of Manitoba, said regardless of the current spat, inter-city bus regulations need an overhaul or deregulation - and the federal government simply can't wash its hands of it.

"It's been a problem for some time," said Prentice, who noted bus companies have to deal with rising fuel costs and regional rivals such as WestJet.

"The notion that the (regulatory) system we abandoned on trucking and we abandoned on air is still applicable to buses is an anomaly."

He said government has a responsibility to make transportation available to rural people as it already does for urbanites.

Other options, he noted, could be looked at: route changes, smaller buses, 12-passenger vans, deregulation. But if Ottawa doesn't ride herd on the process, companies such as Greyhound would have to cut patchwork-quilt deals with every province or territory they run in.

Passengers and business operators who rely on Greyhound were hoping for the best but fearing the worst.

"It's the cheapest option a lot of the time," said Sam Nabi, a 19-year-old university student at the Winnipeg terminal.

Nabi, from Whitby, Ont., was making his way back home.

"There are signs in some of the terminals saying, 'Greyhound here for 75 years' and I don't know what other options there would be."

Jason Diehl of Winnipeg-based Dimo's/Labtronics, a company that makes grain sampling equipment, said they rely on Greyhound to deliver half their products. He said the bottom line is costs will go up.

"It's simply going to cost more if we have to use another carrier. Greyhound has always been the most economical choice," he said.

In Edmonton, Jesse House, a kidney transplant patient, said he uses the bus to get to medical appointments from Grande Prairie, Alta.

He pays $79 for the bus trip, but a plane ride would cost almost $500.

"The bus is the only affordable way for me to come for my medical appointments. I can't drive because of my condition."

Greyhound, founded in 1914 in the United States, is the largest provider of inter-city bus transportation in Canada, serving 700 communities with 1,000 daily departures.

Greyhound has played a part in the development of inter-city bus service around Canada, including southern Ontario, buying Gray Coach Lines from a third party in 1990.

Gray Coach, founded in 1927 by the Toronto Transit Commission, was instrumental in linking up cities and communities throughout the area. It also offered tour trips and service to Buffalo.

It has been a difficult year for Greyhound in Canada, both on the balance sheet and on a more personal, tragic level.

A year ago in July, Tim McLean, a 22-year-old Greyhound passenger riding the bus in Manitoba, was attacked by a seatmate, getting stabbed and decapitated.

The attacker, Vince Li, was found not criminally responsible and is now in a mental institution. McLean's family is suing Greyhound for failing to ensure safety.