In isolated small towns like the one where I grew up, I'm sure they still do. Thing is, the maximum walk was about a kilometer and the population of the school was maybe 200 students, and kids coming in from outlying rural areas were still bussed. It doesn't work if you've got a large feeder school serving several towns, or a gigantic school in the middle of the city (although in theory, you could put the older city kids on public transit and lay on more busses during the crucial period—if their parents would let them out of their sight). So the problem might be a compound of incorrect infrastructure choices and parental paranoia.

Much of Europe has never had school busses, as far as I know. I don't think Japan does either, at least not for middle school and older. How do they handle things?

Maybe in cities, but that doesn't really apply to most of Ontario