With Saskatchewan facing budget deficits, the government needs to cut spending — including the subsidy to its bus company, a taxpayer lobby group says.

The Canadian Taxpayers Federation says the government should shut down the Saskatchewan Transportation Company in order to save taxpayers some $14 million a year.

Todd MacKay, the CTF's Prairie spokesman, says ending the subsidy won't eliminate the deficit — currently running at about $260 million — but it will help.

"Ultimately, STC is losing more than a million bucks a month. We simply can't afford that. That's money we're borrowing, ultimately, and we're passing the bill onto our kids and our grandkids."

The Saskatchewan Transportation Company responded, saying the bus company is a valuable service to the people of the province.

"Individuals use our services for medical appointments in the larger urban centres, we deliver blood to health facilities around the province, so we provide a valuable service to all of these communities," said Candace Phelps, executive director of strategic planning and communications for STC media.

MacKay says people in rural areas who use STC for transportation and package delivery are resourceful and will survive without it.

More car pooling is one option, he said. It's also possible the private sector will step in, he said.

"It's actually an opportunity in a sense because we're going to allow small business people to have the opportunity to serve their communities, instead of the taxpayers getting hammered," MacKay said.

Phelps disagreed and said shutting down the company would leave many with no other transportation options.

In terms of environmental feasibility, Phelps said a closure would result in a lot more cars on the road.

"Passenger services through STC, by our very nature, are environmentally friendly due to the number of private vehicles that our motor coaches displace from the highways across the province," Phelps said.

Premier Brad Wall says his government expects to run a deficit in the next fiscal year as well, assuming it's re-elected in the April 4 election.