COMMERCE - New Canada-U.S. Bridge Given Go-Ahead

"Obama gives official U.S. blessing to new Windsor-Detroit bridge" by STEVEN CHASE, The Globe and Mail (Canada) 4/12/2013

U.S. President Barack Obama has given the official green light to build a second bridge between Windsor and Detroit – the final political approval needed for a span that will broaden Canada’s most vital trade conduit with the United States.

Michigan Governor Rick Snyder will officially announce the granting of a presidential permit at 2 p.m. ET in Detroit Friday along with Canadian Labor Minister Lisa Raitt and Canadian diplomats.

The U.S. State Department on Friday morning confirmed news reports in The Globe and Mail and other media that Washington has given its long-awaited seal of approval to the international crossing.

“Today the Department of State issued a Presidential Permit to the State of Michigan for the construction, connection, operation and maintenance of a bridge linking Detroit, Mich., and Windsor, Ont.,” the U.S. State Department said in a statement.

“This permit contributes to ensuring that our border infrastructure supports increased competitiveness, job creation, and broad-based prosperity in the United States and Canada,” the department said.  The bridge “will help to meet future capacity requirements in a critical travel corridor, promote cross-border trade and commerce, and advance our vital bilateral relationship with Canada.”

The owner of the existing Ambassador Bridge – who has fought a new span – isn’t giving up though.  Matty Moroun has reportedly filed a lawsuit against several U.S. government departments as well as the Canadian government.  In the lawsuit, Mr. Moroun claims a “perpetual and exclusive franchise right” to operate the crossing free of competition from another span.  It says the proposed new crossing would “destroy” the value of the bridge’s franchise, according to the Detroit News.

Last spring the Harper government and the Michigan Governor’s office announced a deal to build a second bridge between Windsor and Detroit – a historic accord aimed at unclogging North America’s most important trade artery after decades of setbacks.

The bridge deal created an authority to oversee the construction, operation and financing of the project, which is forecast to cost as much as $4-billion and take up to five years to build.

The new bridge, currently known as the Detroit River International Crossing or the New International Trade Crossing, will offer an alternative route for trucks at Canada’s busiest commercial border conduit – one that carries one-quarter of the goods traded between Canada and the United States each year.

The bridge is a victory for Prime Minister Stephen Harper, who has championed efforts to ease trade with the United States through his perimeter security accord with Mr. Obama.

But it is also a feat for Mr. Snyder, who struck a deal over the opposition of the Michigan legislature, which has refused to make any money available to finance the project.

Mr. Moroun, the Detroit owner of the existing Ambassador Bridge, has fought against a second span with political manoeuvres and public-relations campaigns.

He failed however last November in a public campaign to enshrine into Michigan’s constitution a rule requiring a statewide referendum before another bridge is built. Voters rejected the idea in a ballot.

The bridge will be financed and built by a private contractor – yet to be selected – but Canada is shouldering the majority of the upfront costs to build related infrastructure, such as extension roads approaching the bridge, on both sides.

This reflects the fact the deal is being conducted over the wishes of the Michigan legislature. Ambassador Bridge supporters in the legislature have repeatedly opposed the project and taken action to ensure the government of Michigan cannot spend money on the project or collect tolls.

To get around this, Ottawa stepped up with a cheque.  The Canadian government will pay $550-million to build Michigan’s share of the road approaching the new bridge on the Detroit side – an amount to be repaid in toll revenue.

Plus, the toll collection booths for travelers heading either way will both be located on the Canadian side of the span because Michigan does not have the legislative authority to accept fees for bridge crossings.

Ms. Raitt thanked the U.S. government for granting the presidential permit.

It "represents an important step towards a new bridge which will be needed for growing trade and traffic at the busiest Canada-U.S. commercial border crossing with over 8,000 trucks crossing each day," she said.

The project will cost the Canadian government about $1.5-billion upfront, although in about 25 years it will be repaid the $550-million it advanced to Michigan.

Ontario and Canada are splitting the $1.4-billion cost of the extension of freeway from Highway 401 to the foot of the new bridge.

Ottawa will pay the cost of the Canada customs plaza, estimated at $250-million to $300-million.  Washington will cover the U.S. customs plaza, expected to cost the same.

About $120-billion (U.S.) worth of goods cross the border at the Detroit-Windsor crossing annually, carried mainly by the 2.7 million trucks that cross the Ambassador Bridge every year.  Truck crossings are expected to more than double by 2035.

The new span is planned to cross the Detroit River about three kilometers south of the Ambassador Bridge from the Brighton Beach neighborhood in Windsor to the Delray neighborhood in Detroit. Environmental assessments for the bridge were completed in 2009 and Ontario, Ottawa and the U.S. granted their approval.