Michigan, Ottawa near deal on new border bridge

Share

Ottawa and the state of Michigan have launched a push to secure a deal on a second bridge between Windsor, Ont., and Detroit, a move that would resolve a long-standing barrier to more efficient trade between Canada and the United States.

Sources familiar with the talks say chances are "fairly good" an accord to build the multibillion-dollar crossing will be reached before the end of June. "I think we're pretty close," one source said.

There is no greater conduit for Canada-U.S. trade than the link between Detroit and Windsor. The thousands of trucks that cross the Ambassador Bridge each day carry about 25 per cent of the annual merchandise trade between Canada and the United States.

But that privately-owned bridge, and the city streets around it near the border, are also a key bottleneck in moving goods.

Canada has been driving efforts to build an additional crossing for more than seven years as a means of easing cross-border traffic and meeting future demand.

Political approval for the crossing from Michigan is the last big hurdle for the project, the most important border infrastructure project in the works for Canada. And for months, the Harper government and Michigan Governor Rick Snyder have been quietly negotiating a so-called "interlocal" agreement that would enable a deal on a new bridge, despite opposition in Michigan's legislature.

A deal between Ottawa and Mr. Snyder, however, will not spell an end to the gauntlet of challenges that face the bridge.

The Canadian government expects that the operators of the Ambassador Bridge, who have waged a fierce campaign against a second span, would take legal action against a deal.

The company behind the Ambassador Bridge is gathering signatures to put a referendum question on the November election ballot – one that asks Michigan voters if they want to amend their state's constitution so that a statewide ballot is required before a new bridge goes ahead. They have used TV ads to raise questions in Michigan voters' minds about the rationale for a government-backed second crossing.

While Canada and Michigan are on the path to a deal, several important matters must still be resolved.

One potential sticking point is what procurement rules will govern the project. Canada favours an open process with no discriminatory restrictions on where the material or labour originates. Some in Michigan want rules that would give preference to locally-made steel and other material.

In the end, Canada and Michigan will have to hammer out hybrid procurement rules for the project. The span itself will be put out to tender for a private company to build and operate.

The Canadian government is so keen to get the link built that it has offered to pay Michigan's $550-million share of the $1.4-billion project, which would later be repaid from toll revenue.

Sources say that before a deal is signed, Mr. Snyder also needs to secure pledges from Washington to deliver several items in a timely manner. These include a presidential permit for the international bridge, as well as clearer definition of the terms and conditions for federal aid that should help sell the project to voters in the rest of Michigan.

The Obama administration has said Michigan could count the $550-million that Canada has agreed to pay for the state's share of the bridge project as cash it will match several times over for federal highway funds. This will mean up to $2.2-billion to repair Michigan roads and infrastructure elsewhere in the state.

The new crossing would span the Detroit River south of the Ambassador Bridge from the Brighton Beach area in Windsor to the Delray area of Detroit.

If a deal can't be reached in the next few weeks, sources caution, it may signal that the challenges blocking a bridge deal are too big to be overcome in the short term.

The operators of the Ambassador Bridge say there's insufficient traffic for two bridges and have already launched multiple legal challenges in Canada and the United States.

Transport Minister Denis Lebel's office refused to comment on the negotiations. "We continue to work with the state of Michigan and the U.S. to advance this project, and are committed to getting this bridge built," spokeswoman Vanessa Schneider said in an e-mailed statement.