US-Canada Trade at the Center of New Bridge Debate

by Taras Berezowsky on April 26, 2011

Style:    Category: Global Trade, Macroeconomics, Public Policy

Source: Detroit Free Press

The “Great Second Bridge Debate, as I’ve come to call it, has come to a head lately as Detroit’s Ambassador Bridge owner Matty Moroun dukes it out with the US and Canadian governments, Michigan’s governor Rick Snyder, GM, Chrysler, and countless other businesses over the proposal to build a second international bridge downriver from the Ambassador, connecting Detroit, Michigan, with Windsor, Ontario. The project is called the “New International Trade Crossing.

The rub is essentially this, based on years of reporting by the Detroit newspapers: Moroun, an old-school mogul, is the private owner of the Ambassador Bridge, and he doesn’t want another bridge, to be co-owned and jointly operated by the US and Canadian governments, to cut into his profits. (This charade has been going on for five years.) The argument against Moroun’s, taken up by the governments and businesses on both sides of the border, stems from this major fact: The Ambassador Bridge, the above-ground sibling of the Detroit-Windsor Tunnel, together comprise the single largest US-Canada trade crossing by volume on the continent, with $500 million in goods making the crossing daily, according to comments made by Bill Ford, Ford Motor Co.’s executive chairman. Canada is the US’ largest trading partner, with some $1.5 billion in goods and 300,000 people crossing the border every day according to the US Commerce Department.

The Detroit Free Press published an excellent series of reports on the issue, trying to dispel myths by breaking down the costs and benefits to businesses and taxpayers. According to the newspaper’s reporting, Moroun does want to build a twin bridge next to the Ambassador at a personal cost of $500 million, but the Canadian government supports a bridge farther downriver that would connect trucks to the 401 expressway instead of Huron Church Road in downtown Windsor. The Free Press estimates the cost of a joint US-Canada endeavor at $950 million, to be paid mostly by issuing and repaying bonds and not directly taxing citizens. Michigan’s Gov. Rick Snyder and state legislators drafted a bill that would protect taxpayers from liability.

Big Auto supports the New International Trade Crossing nearly across the board, with Ford, GM, Chrysler, Toyota and Honda all backing the project. According to the NITC’s blog, “half of all daily trade between the United States and Canada travels through the Ontario-Michigan border and nearly 60 percent of all Michigan exports go to or through Canada. (Looking at recent US Census numbers, however, US auto companies and others must find ways to increase their exports; the US is running a trade deficit of nearly $6.7 billion dollars with Canada so far in 2011.)

The best thing the project would do aside from the trade angle is creating construction jobs even though temporary and stimulating the business of local/international contractors who will be supplying the metal and manpower for the bridge. The NITC blog cites an estimated 10,000 jobs for Michigan workers from initial construction and support for an additional 25,000 Michigan jobs once construction is completed. MetalMiner will continue reporting on that angle as the discussion and approval process continues.

–Taras Berezowsky

{ 10 comments… read them below or add one }

1 JoeBlog April 26, 2011 at 12:34 pm

Some facts:
–The Governments over 80 years ago gave exclusivity to the Bridge Company for a bridge in the area. DRIC/NITC cannot be built.
–The Governments cannot force Moroun out so they want to terrorize him into selling out cheaply
–Minister Baird has admitted that Government actions have taken place over 2 generations with the effort increased over the last decade.
–PM Harper issued a secret mandate letter over a year ago to buy the Bridge.
–I do need to congratulate the Free Press because they did what they promised. They so separated the truth in their articles to make it virtually impossible for anyone to find it by reading their stories.
–The Governor’s draft bill does NOT protect taxpayers at all. eg see “availability payment” definition
–Moroun’s bridge does everything that the DRIC/NITC bridge would do and more.
–For more details, go to http://www.windsorsquare.ca

Reply

2 VictoriaContraire April 26, 2011 at 3:20 pm

JoeBlog has been carrying water for Matty Moroun for years, so I wouldn’t believe a word he says if he swore it on a stack of bibles.
All his claims have been refuted countless times by countless people in the know. It’s said that if the only tool one has is a hammer, one tries to work on everything by pounding on it. Blog just pounds away, hoping that he can confuse people enough so that they won’t recognize a lie when they see it. Moroun has been trying for the better part of a decade to build a bridge between Buffalo and Ontario and to twin his Ambassador Bridge between Windsor and Detroit. Windsor doesn’t want another downtown bridge; Detroit doesn’t want another downtown bridge. But we know what Mr. Moroun wants: If he can’t build his bridges and get a monopoly on the Great Lakes borders, he wants the government — any government — to buy him out at a highly inflated figure, and pay him off. Mr. Moroun is so used to buying politicians and paying off public officials that he figures that’s the way it’s done. Gee, you know, I think buying him out would be worth it — then we wouldn’t have to put up with his shenanigans and illegalities and frivolous lawsuits any more. On the other hand, rather than give him any more of our hard-earned money, why don’t we wait a little longer; after all, the rumors are that the Feds are looking to indict him — something to do with the Kilpatrick reign — or so it’s said. Nah, those rumors can’t be true; we all know that Matty wouldn’t do anything dishonest now, would he . . .

Reply

3 tberezowsky April 26, 2011 at 3:33 pm

Whew, at least I’m not totally crazy, @VictoriaContraire — it did seem like JoeBlog was firmly rooted in the Moroun camp. You make some good points; it’s not like Matty is a saint. At the same time, @JoeBlog, it’s not like I stand with the Free Press on everything, but the steel spend for any bridge alone is of interest to MetalMiner. So bottom line, as plans to build any bridge — government-led or privately financed — move forward, the implications of easier commercial trade traffic could be sizable.

Reply

4 JoeBlog April 26, 2011 at 4:34 pm

Au Contraire Victoria, ad hominem arguments really are not worthy of you. That’s why I try hard to stay away from them and deal with facts.

As for your facts, as an example, the Ambassador Bridge is NOT in downtown Windsor so please excuse me if I don’t accept everything you say either.

Rather than feeling totally crazy, you might want to go to http://www.windsorsquare.ca and read my 2-part BLOGs on the over 40 points that the Free Press talked about to get a different perspective on the border file. It might help educate you so you can make your own informed decision.

You do not have to be in anyone’s camp to allow the true facts to come out. Unfortunately with the DRIC-ites, they sometimes have trouble knowing what the facts are. As an example, read the BLOG I just posted on the $550M loan which is not a loan but which must be paid back. That legally unenforceable loan undermines what Governor Snyder claims he wants to do and leaves a $600M hole in his transportation budgets for 2012 and 2013.

I am still waiting for those anonymous people that Victoria mentioned to correct my “claims.” After all of these years, they have not done it so far.

Reply

5 tberezowsky April 27, 2011 at 8:37 am

As to “the $550M loan which is not a loan but which must be paid back,” are there loans that shouldn’t be paid back? tell me where i can get my hands on one of those!

In all seriousness and professionalism, I did go to your blog, JoeBlog — man, I’m already tired of typing “blog” — and took a spin through some of your facts. As extensive as the two posts are, it would be great to have some more sourcing attribution for where your facts come from. Also, any leads on who would be doing the actual ground-up building if any sort of bridge comes to fruition?

Reply

6 VictoriaContraire April 27, 2011 at 12:06 pm

Mr. Blog, your stance must be pretty weak if the best you can come up with is to say that the Ambassador Bridge is not in downtown Windsor. My dictionaries define “downtown” as located in the lower part of a city. Are you saying that the bridge is uptown?
In any event, considering all the misleading claims that have been launched by DIBC, all I can say is that they remind me of what was said about the old-time Jesuits: That when they were accused of having killed two men and a dog, they triumphantly produce the dog alive.
Your posting refers to “true facts” — which would lead one to believe that there are such things as “false facts.” No; a fact is a fact is a fact. And whether you disbelieve me or I disbelieve you, the facts will prove themselves.

Reply

7 JoeBlog April 27, 2011 at 4:43 pm

Just go through my BLOGs and you will see the source of everything I have written.

Ms Contraire you are mistaking the Tunnel for the Bridge. That was my point.

And I do agree with your last line.

Reply

8 VictoriaContraire April 30, 2011 at 9:27 am

http://www.windsorstar.com/Tunnel+boss+shut+talks+WikiLeaks+reveals/4702279/story.html

Tunnel boss ‘shut out’ of talks, WikiLeaks reveals

BY SARAH SACHELI, THE WINDSOR STAR APRIL 30, 2011

The former president of the company that manages the Windsor-Detroit tunnel complained to the U.S. embassy in Ottawa in 2005 about backroom dealings between Ambassador Bridge owner Matty Moroun and Detroit Mayor Kwame Kilpatrick, correspondence released by WikiLeaks this week shows.

In a cable he sent to the State Department on Nov. 10, 2005, David Wilkins, former U.S. ambassador to Canada, said Gordon Jarvis complained he had been “shut out of negotiations” as he tried to get the Detroit & Canada Tunnel Corporation’s lease arrangement renewed. Moroun had offered to pay $30 million to gain control of the U.S. side of the Windsor-Detroit tunnel for 100 years and the tunnel corporation was trying to make a counter offer.

According to the correspondence, Jarvis had a meeting with embassy officials together with Ottawa lawyer Jacques Shore. He had already met with senior staff in the Canadian deputy prime minister’s office and was preparing to bring his complaints to U.S. federal and state legislators.

Windsor Mayor Eddie Francis said Friday the contents of leaked document is no surprise. The Windsor Star had published details of Moroun’s deal with Kilpatrick a month before the U.S. Ambassador with Canada was apprising Washington about it. But, he said, it shows everyone shared the same concerns about the Ambassador Bridge gaining control of the tunnel.

Francis said it was believed Moroun would shut down the tunnel and route all traffic through the Ambassador Bridge. Francis said to stop that, Windsor put in its own bid for control of the crossing. “What it shows is the steps that the City of Windsor took were critical steps and necessary steps.”

Neal Belitsky, president of the Detroit Windsor Tunnel LLC, could not be reached for comment Friday.

The U.S. ambassador described the Ambassador Bridge and the tunnel as “arguably the two most significant pieces of critical infrastructure along the entire frontier.”

The cable is one of hundreds released this week on the leak website. Another, authored by the consul general at the U.S. Consulate in Toronto on Nov. 28, 2005, also dealt with the Windsor-Detroit tunnel and preparations for the Super Bowl and North American International Auto Show early the next year. In that cable, consul general Jessica LeCroy said the U.S. General Services Administration lacked the “sufficient funds” to make the necessary preparations.

Francis said Friday that view was never known to him. “We got what we needed,” he said, saying traffic through the tunnel occurred “flawlessly” thanks to a new system that saw bus passengers being included on pre-vetted manifests.

© Copyright (c) The Windsor Star

Reply

9 Aida Fraso October 12, 2012 at 5:24 am

Thanks for sharing.

Reply

10 Peter Gump November 6, 2012 at 11:52 pm

nice and very informative

Reply

Leave a Comment

Previous post:

Next post: