<PAGE>

                                                                   EXHIBIT 10.17

THIS AGREEMENT MADE EFFECTIVE THE 20TH DAY OF AUGUST, 2004.

Between:

         Laidlaw International, Inc., a Delaware corporation ("Laidlaw")

                                       and

                      Jeffery A. McDougle (the "Executive")

WHEREAS, Laidlaw desires to employ the Executive and the Executive desires to be
employed by Laidlaw;

NOW THEREFORE, the parties have agreed that the terms and conditions of the
relationship shall be as follows:

ARTICLE 1 -- DEFINITIONS

Whenever used in this Agreement, the following terms shall have the meanings set
forth below, and when the meaning is intended, the initial letter of the word is
capitalized:

(a)      "Agreement" means this employment agreement, as amended from time to
         time.

(b)      "Base Salary" means the salary of record paid to the Executive as
         annual salary, and as further indicated in paragraph (a) of Article 4
         (Compensation).

(c)      "Board" means the Board of Directors of Laidlaw.

(d)      "Cause" means the Executive's:

         (i)      Willful and continued failure to perform substantially the
                  Executive's duties with Laidlaw after Laidlaw delivers to the
                  Executive written demand for substantial performance,
                  specifically identifying the manner in which the Executive has
                  not substantially performed his duties;

         (ii)     Conviction of an indictable offense; or

         (iii)    Willfully engaging in illegal conduct or gross misconduct
                  which is materially and demonstrably injurious to Laidlaw.

         For purposes of this paragraph and Article 13, no act or omission by
         the Executive shall be considered "willful" unless it is done or
         omitted in bad faith or without reasonable belief that the Executive's
         action or omission was in the best interests of Laidlaw.

(e)      "Committee" means the Compensation Committee of the Board.

                                       1
<PAGE>

(f)      "Effective Date" means August 20, 2004.

(g)      "Executive" shall mean Jeffery A. McDougle.

(h)      "Laidlaw" shall mean Laidlaw International Inc., a Delaware
         corporation, including any and all subsidiaries or any successor
         thereto.

ARTICLE 2 -- TERM OF THE AGREEMENT

The term of this Agreement shall commence on the Effective Date and shall
continue until terminated in accordance with the provisions of this Agreement.

ARTICLE 3 -- TITLE; COMMENCEMENT OF EMPLOYMENT; REPORTING

The Executive shall serve as the Vice President and Treasurer of Laidlaw. The
Executive shall report to the Chief Financial Officer.

ARTICLE 4 -- COMPENSATION

(a)      Unless otherwise provided, all dollar amounts set forth in this
         Agreement shall be in United States Dollars. The Base Salary of the
         Executive for his services is established by the Committee at the
         annualized rate of $260,000. The Base Salary shall be payable twice
         monthly on the 15th business day and the last business day of each
         month. The Base Salary shall be reviewed annually during Laidlaw's
         normal review period. The review will be undertaken by assessing the
         Executive's achievement of the overall objectives established by the
         Committee in consultation with the Executive and with regard to the
         market rates of remuneration paid for similar duties and
         responsibilities.

(b)      The Executive will be eligible to participate in Laidlaw's Short Term
         Incentive Plan. For the fiscal year commencing September 1, 2004, the
         Executive's target bonus shall be 50% of Base Salary and the maximum
         bonus shall be 100% of Base Salary. The Executive's right to receive
         any bonus under Laidlaw's Short Term Incentive Plan shall be determined
         based only upon quantitative measurements established by the Committee
         after consultation with the Executive and as set forth in accordance
         with Laidlaw's Short Term Incentive Plan.

(c)      The Executive shall participate in The Supplemental Executive
         Retirement Plan sponsored by Laidlaw for the benefit of its employees.

(d)      Subject to approval by the Committee, the Executive will be eligible to
         receive grants of stock options from time to time. Such stock options
         will be on terms and conditions established by the Committee after
         consultation with the Executive.

                                       2
<PAGE>

ARTICLE 5 -- BENEFITS

(a)      AUTOMOBILE

         Laidlaw will provide the Executive with a monthly allowance of Seven
         Hundred Fifty Dollars ($750.00) for expenses incurred by the Executive
         for an automobile and its related operating expenses.

(b)      EXPENSES

         It is understood and agreed that the Executive will incur expenses in
         connection with his duties under this Agreement, including, but not
         limited to, travel expenses, home facsimile expenses, personal computer
         expenses and telephone expenses. Laidlaw shall reimburse the Executive
         for any such expenses provided that the Executive provides to Laidlaw
         an itemized written account and receipts acceptable to Laidlaw.

(c)      VACATION

         The Executive shall be entitled to four (4) weeks vacation during each
         calendar year. The vacation shall be taken at the discretion of the
         Executive with the understanding that the Executive will take into
         account business needs and operations in scheduling vacation. All
         vacation earned must be taken by the end of the calendar year following
         accrual or it is forfeited.

(d)      WELFARE BENEFITS

         The Executive shall be entitled to those welfare benefit coverages as
         are offered by Laidlaw to its employees generally (such as medical
         insurance, dental insurance, short and long-term disability insurance
         and group term life insurance), all in accordance with the employee
         benefit plans and policies maintained by Laidlaw for the benefit of
         employees of Laidlaw, and as amended from time to time.

(e)      EXECUTIVE BENEFIT STIPEND

         Laidlaw shall pay the Executive an annual sum equal to Twenty Thousand
         Dollars ($20,000.00), in two equal installments (on January 1 and July
         1 of each year), grossed up to enable Executive to pay applicable
         income taxes. Such Stipend is intended to cover items such as
         automobile expenses, club memberships and professional advice.

ARTICLE 6 -- TERMINATION OF EMPLOYMENT

(a)      The parties understand and agree that this Agreement and the
         Executive's employment hereunder may be terminated in the following
         manner in the specified circumstances:

         (i)      By the Executive, at any time, for any reason, on the giving
                  of 90 days' written notice to Laidlaw. Laidlaw may waive
                  notice, in whole or in part, upon immediate payment to the
                  Executive of the Executive's Base Salary for such portion of
                  the 90-day notice period as is waived by Laidlaw.

         (ii)     By Laidlaw, in its absolute discretion, without any notice or
                  pay in lieu thereof, for Cause.

                                       3
<PAGE>

         (iii)    By Laidlaw, in its absolute discretion and for any reason,
                  without Cause. Upon such termination, Laidlaw shall (A)
                  continue to pay the Executive his Base Salary in effect at the
                  time of such termination for a period of 12 months following
                  such termination, (B) provided such termination is following
                  the second anniversary of his employment with Laidlaw (or any
                  predecessor thereto) pay the Executive a monthly amount equal
                  to one-twelfth of the Executive's target bonus in effect at
                  the time of Executive's termination of employment for a period
                  of 12 months following such termination, and (C) shall
                  continue to provide the Executive medical insurance, dental
                  insurance and term life insurance for a period of 12 months
                  after termination, or, if such benefits cannot be provided by
                  Laidlaw, Laidlaw shall pay to the Executive an equivalent lump
                  sum cash amount in lieu of such benefits.

         In order to receive the entitlement under this paragraph, the Executive
         must undertake to sign a release in a form satisfactory to Laidlaw,
         fully releasing Laidlaw from further claims upon payment of the amounts
         stipulated herein. However, the form of release shall not require that
         the Executive give up any rights of indemnity which the Executive may
         have had as against Laidlaw for acts carried out by the Executive in
         the ordinary course of Laidlaw's business.

(b)      The Executive agrees that during employment pursuant to this Agreement
         and for twelve (12) months following termination without Cause of his
         employment by Laidlaw and payment of the severance payment amount and
         benefit continuation as detailed in subparagraph (iii) of paragraph (a)
         of Article 6 (Termination of Employment), he will not solicit or accept
         business with respect to products competitive with those of Laidlaw
         from any of Laidlaw's customers, wherever situated, and he shall not
         either individually or in partnership, or jointly in conjunction with
         any other person, entity or organization, as principal, agent,
         consultant, lender, contractor, employer, employee, investor,
         shareholder, or in any other manner, directly or indirectly, advise,
         manage, carry on, establish, control, engage in, invest in, offer
         financial assistance or services to, or permit his name to be used by
         any business that competes with the then-existing business of Laidlaw,
         provided that the Executive shall be entitled, for investment purposes,
         to purchase and trade shares of a public company which are listed and
         posted for trading on a recognized stock exchange and the business of
         which public company may be in competition with the business of
         Laidlaw, provided that the Executive shall not directly or indirectly
         own more than five percent (5%) of the issued share capital of the
         public company, or participate in its management or operation, or in
         any advisory capacity within the time limits set out herein.

         For purposes of the obligations set out herein, the business of Laidlaw
         shall mean the provision of contract bus services for school bus
         transportation throughout Canada and the United States and municipal
         and paratransit bus transportation within the United States, inter-city
         and tourism bus transportation throughout North America and healthcare
         transportation services and emergency management services in the United
         States.

(c)      The Executive further agrees that for a period of twelve (12) months
         following termination of employment, however caused, he will not
         solicit for hire or rehire, or take away, or cause to be hired, or
         taken away, any employee of Laidlaw.

                                       4
<PAGE>

ARTICLE 7 -- AUTHORITY

(a)      The Executive shall support the Chief Financial Officer in carrying out
         the general or specific instructions and directions of the Chief
         Executive Officer and the Board and together with the Chief Financial
         Officer in doing so, may enter into contracts, engagements or
         commitments of every nature or kind, in the name of and on behalf of
         Laidlaw, and may engage, employ and dismiss all managers and other
         employees and agents of Laidlaw, subject to the by-laws and charter
         documents of the Company and the authority given him by the Company
         from time to time.

(b)      The Executive shall conform to all lawful instructions and directions
         given to him by the Chief Financial Officer, the Chief Executive
         Officer, and the Board and obey and carry out the by-laws of Laidlaw.

ARTICLE 8 -- SERVICE

(a)      The Executive, throughout the term of his employment, shall devote his
         full time and attention to the business and affairs of Laidlaw, and
         shall not undertake any other business or occupation or, unless
         approved by the Chief Financial Officer, become either (i) an officer,
         employee or agent of any other company or firm which is a commercial
         venture or (ii) a director of more than two companies or firms which
         are commercial ventures.

(b)      The Executive shall well and faithfully serve Laidlaw and use his best
         efforts to promote the interests thereof and shall not disclose any
         information he may acquire in relation to Laidlaw's business, the
         private affairs or trade secrets of Laidlaw, techniques and concepts,
         and other confidential information concerning the business, operations
         or financing of Laidlaw, to any person other than the Board, or for any
         purposes other than those of Laidlaw, either during the term of his
         employment under this Agreement or after such term.

ARTICLE 9 -- CHANGE IN CONTROL

(a)      If a change in control (as defined in the Change in Control Agreement)
         occurs, the rights and obligations of the Executive and Laidlaw shall
         be in accordance with the Change in Control Agreement attached as
         Appendix A.

(b)      In order to receive the entitlement under this paragraph, the Executive
         must undertake to sign a release in a form satisfactory to Laidlaw,
         fully releasing Laidlaw from further claims upon payment of the amounts
         stipulated in Appendix A. However, the form of release shall not
         require that the Executive give up any rights of indemnity which the
         Executive may have had as against Laidlaw for acts carried out by the
         Executive in the ordinary course of Laidlaw's business.

If a change in control occurs and Executive receives all payments under the
Change in Control Agreement, the Executive hereby waives any rights he may have
to any payments or other benefits under this Agreement, including any severance
payments.

                                       5
<PAGE>

ARTICLE 10 -- ASSIGNMENT OF RIGHTS

The rights which accrue to Laidlaw under this Agreement shall pass to their
affiliates, successors or assigns. The rights of the Executive under this
Agreement are not assignable or transferable in any manner but flow to the
Executive's estate and heirs.

ARTICLE 11 -- NOTICES

All notices and other communications required or permitted hereunder, or
necessary or convenient in connection herewith, shall be in writing and shall be
deemed to have been given when hand delivered, delivered by facsimile or mailed
by registered mail as follows (provided that notice of change of address shall
be deemed given only when received):

If to Laidlaw, to:

         Laidlaw International, Inc.
         55 Shuman Boulevard, Suite 400
         Naperville, IL 60563

If to the Executive, at such address as Executive provides to Laidlaw from time
to time as part of his personnel records, or to such other names or addresses as
Laidlaw or the Executive shall designate by notice to the other in the manner
specified in this paragraph.

ARTICLE 12 -- LIABILITY INSURANCE

Laidlaw shall maintain the Executive's liability insurance in accordance with
Laidlaw's corporate policy and applicable law.

ARTICLE 13 -- INDEMNIFICATION

Laidlaw agrees that if the Executive is made a party to any action, suit,
proceeding or any other claim whatsoever, by reason of the fact that the
Executive is or was a director, officer, employee or agent of Laidlaw, or is or
was serving at the request of Laidlaw as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other enterprise,
whether or not the basis of such claim is the Executive's alleged action in an
official capacity while in service as a director, officer, employee or agent of
Laidlaw, the Executive shall be indemnified and held harmless by Laidlaw to the
fullest extent legally permitted or authorized by Laidlaw's certificate of
incorporation or bylaws or Board resolutions against all expenses, liability and
loss, including, without limitation, legal fees, fines or penalties and amounts
paid or to be paid in settlement, all as reasonably incurred by the Executive in
connection therewith, and such indemnification shall continue as to the
Executive even after the Executive has ceased to be a director, officer,
employee or agent of Laidlaw, and shall inure to the benefit of the Executive's
heirs, executors and administrators.

ARTICLE 14 -- WITHHOLDING OF TAXES

                                       6
<PAGE>

Laidlaw shall be entitled to withhold from any amounts payable under this
Agreement all taxes as legally shall be required pursuant to applicable federal,
state or local laws. Laidlaw shall not be obligated to compensate the Executive
for the payment of such taxes.

ARTICLE 15 -- SEVERABILITY

If any provision of this Agreement or the application thereof to anyone, or
under any circumstances, is adjudicated to be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect any other
provision or application of this Agreement which can be given effect without the
invalid or unenforceable provision or application and shall not invalidate or
render unenforceable such provision or application in any other jurisdiction.

ARTICLE 16 -- ENTIRE AGREEMENT

This Agreement, including Appendix A hereto, constitutes the entire agreement
between the parties with respect to the employment and appointment of the
Executive and any and all previous agreements, written or oral, express or
implied, between the parties or on their behalf, relating to the employment and
appointment of the Executive by Laidlaw, are terminated and cancelled and each
of the parties releases and forever discharges the other of and from all manner
of actions, causes of action, claims and demands whatsoever, under or in respect
of any previous agreement; provided, however that this does not cancel or
terminate the separate indemnification agreement between Laidlaw and the
Executive.

ARTICLE 17 -- AMENDMENT, WAIVER, ETC.

No provision of this Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in writing and signed by the
Executive and Laidlaw. No waiver by any party hereto at any time of any breach
by any other party hereto of, or compliance with, any condition of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.

ARTICLE 18 -- HEADINGS

The headings used in this Agreement are for convenience only and are not to be
construed in any way as additions to or limitations of the covenants and
agreements contained in it.

ARTICLE 19 -- COUNTERPARTS

This Agreement may be executed in one or more counterparts, each of which shall
be deemed to be an original but all of which together will constitute one and
the same instrument.

ARTICLE 20 -- GENDER AND NUMBER

Except where otherwise indicated by the context, any masculine term used herein
shall also include the feminine; the plural shall include the singular, the
singular shall include the plural.

ARTICLE 21 -- GOVERNING LAW

                                       7
<PAGE>

This Agreement shall be governed by the internal law, and not the laws of
conflicts, of the State of Delaware.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the 20th day
of August, 2004.

                                   LAIDLAW INTERNATIONAL INC.

                                   BY:__________________________________________
                                   NAME: BETH BYSTER CORVINO
                                   TITLE: SENIOR VICE PRESIDENT, GENERAL COUNSEL

                                   EXECUTIVE

                                   _____________________________________________
                                   Jeffery A. McDougle

                                       8