New $2.1 Billion Detroit-Windsor Bridge Promises Boon to U.S. Trade

Fiscal Times | Eric Pianin

Amid the gloom over the partisan deadlock in Washington over an infrastructure program and the Keystone XL pipeline, the U.S. and Canadian governments have quietly cut a deal on a new $2.1 billion bridge linking Detroit and Ontario designed to eliminate a massive bottleneck in the flow of goods between the two countries.

With more than $650 billion in goods exchanged each year between Canada and the United States, Canada represents this country’s largest trading partner, overshadowing China, Mexico and Japan. Nearly half of all goods that are transported between the two countries by truck each year – or roughly $131 billion worth – currently pass over the Ambassador Bridge or through an adjacent  tunnel.

The 85-year-old Ambassador Bridge is swamped by over 8,000 trucks daily. A combination of heightened border security and persistent traffic jams is creating a drag on potential growth in U.S. exports and imports along the Detroit-Windsor border. Some experts say construction of a new bridge would pave the way for a significant increase in trade in coming years.

“Among all the border crossings between Canada and the United States, Detroit is really the most emblematic of the infrastructure problems that need to be addressed,” Joseph Kane, a senior policy specialist on U.S. metropolitan areas, said in an interview on Monday. “There’s a huge scale of value really going across the border, and it’s not just a local issue where it’s just benefiting local workers and business establishments in Michigan itself.”

The U.S. State Department approved the bridge in 2013, but the project has been dogged for years by financial and legal problems and challenges from community residents.

The new bridge is to be constructed about two miles south of the  Ambassador Bridge, a privately owned suspension bridge that currently is the busiest international border crossing in North America in terms of trade volume. The project also will include construction of new highway interchanges in downtown Detroit and Windsor to handle more easily the crush of traffic. Officials have said they hope to open the bridge in 2020, although construction hasn’t started yet.

The deal was finally sealed after the Canadian government agreed recently to pick up the $250 million to $300 million cost of a customs plaza for the New International Trade Crossing on the U.S. side. The Department of Homeland Security says that a “public-private partnership” will use tolls to reimburse Canada for the plaza’s construction. In return, the U.S. will pay for the workers, operations and maintenance of the plaza in Detroit – with a first year cost of about $100 million.

Much of the $131 billion worth of cargo transported by truck between Detroit and Windsor annually is high-value transportation and electronic equipment that is destined for regions well beyond Detroit and Ontario.  By comparison, the next highest volume border crossing, in Buffalo, N.Y., handles about $151 billion of truck traffic a year, or one third of what is trucked across the Ambassador Bridge, according to data prepared by Brookings.

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Latest deal on Detroit-Canada bridge a huge boost for metro trade

Brookings |

Over the past decade, the New International Trade Crossing (NITC)—a proposed bridge between Detroit and Windsor, Ontario—has been in the works to improve connectivity at one of the world’s busiest border crossings and sites of commerce. Supported by an innovative, binational public-private partnership between the United States and Canada, the $2 billion-plus project will not only relieve pressure on the increasingly congested, 85-year-old Ambassador Bridge, which handles over 8,000 trucks daily, but also reinforce Michigan’s role as a global trading hub.

Uncertainties over funding and vocal opposition have long stalled the NITC’s progress, but the project just cleared a major hurdle toward completion when Canada agreed to pick up a $250 million tab for the bridge’s customs plaza. In addition to the thousands of local workers and industries that stand to benefit from this latest move, metropolitan areas across the United States and Canada will reap economic rewards for years to come.

Protecting the U.S.-Canadian trading relationship is of vital significance to both countries’ economies and facilitated by key infrastructure investments. With over $650 billion in goods exchanged each year, Canada represents the largest trading partner for the U.S., outranking China, Mexico, and Japan. At the same time, those goods flow to an impressive amount of places on both sides of the border, from Seattle and Houston to Vancouver and Montreal, helping explain why Canada has taken a lead role investing in the NITC.

Detroit is easily the most important of these trading depots, especially when it comes to truck movement. Last year, more than 1.6 million trucks passed through the metro area, which represented the busiest border crossing between the U.S. and Canada and the second-busiest in North America next to Laredo (1.9 million trucks). An upcoming release in our Metro Freight series will reveal a similar result, showing how Detroit funnels approximately $131 billion, or nearly half, of all goods that move by truck between the U.S. and Canada. By comparison, the next highest border crossing, Buffalo, transports about one-third this value by truck ($51 billion), followed by several rural regions.

Source: Brookings analysis of EDR data.
Note: “Rest of” designations refer to nonmetropolitan portions of each state. For instance, the “Rest of Washington” includes all rural regions outside metropolitan areas such as Seattle and Spokane.

In turn, a variety of markets across the U.S. rely on Detroit to profit from Canadian trade. For example, only 4.7 percent of the $131 billion carried on these trucks ($6.2 billion) is produced or consumed locally in Detroit. Instead, the vast majority of this value travels to and from large markets like New York ($4.7 billion), Chicago ($4.4 billion), and Los Angeles ($2.5 billion), including anything from electronics to metals to agricultural products.

As policymakers look to target more freight investments in the future, the NITC clearly assumes national importance. The U.S. already faces an enormous backlog of infrastructure projects along the border, and it’s time for a more coordinated, proactive approach—through a national freight investment program— that can further support trade in particular regions.

Originally posted by Brookings

Editorial: Build the Detroit River bridge

Latest legal setback should end the challenges to new Detroit River crossing

Piece by piece, preparations for the new Detroit River bridge are falling into place. This week, the U.S. Supreme Court cleared a potential major legal hurdle by refusing to hear a lawsuit brought by community activists and the owner of the Ambassador Bridge.

The challenge came from Latin Americans for Social and Economic Development, Citizens with Challenges, Detroit Association of Black Organizations and other community groups, along with the Detroit International Bridge Co., owner of the Ambassador Bridge.

The parties claimed the Federal Highway Administration, in approving the Delray neighborhood of southwest Detroit as the site of the new crossing, violated the social and environmental justice provisions of the National Environmental Protection Act, the Administrative Procedures Act and other federal laws.

Federal District Court Judge Avern Cohn rejected the lawsuit, and his decision was upheld by the 6th Circuit Court of Appeals. Now, the Supreme Court has put the matter to rest.

It is the latest in a string of legal victories for Gov. Rick Snyder and other backers of the new Detroit River International Crossing.

Last summer, the appellate court also rejected the contention that the federal government had bowed to pressure from Canada in denying a permit for Ambassador Bridge owner Matty Moroun to build a second span adjacent to his current bridge.

And earlier this month, the United States and Canada reached agreement for the Canadians to front the money for building out the customs plaza on the Detroit side of the crossing. As with the entire $2 billion cost of the bridge, which Canada is also putting up, the $300 million for the plaza will be repaid with revenue from tolls.

By now, the inevitability of the new bridge should be evident. Continuing court battles and other blocking moves is pointless.

Moroun, as well as the community groups, should stand down and let the process of building the bridge proceed.

Instead of continuing a futile fight, they should work with the state and federal governments to mitigate the community’s concerns.

There is no reason the crossing should be a negative for the devastated Delray neighborhood. The international trade expected to be generated by the bridge should create opportunities for warehouses and other logistic industry investments, and with them much needed jobs. The focus now should be on training local workers for those jobs, and making sure development unfolds in a manner that benefits the neighborhood.

As for Moroun, he should accept that he’s lost this battle. Further legal maneuvering is pointless. He has a major investment in the Ambassador Bridge, and it is natural that he would want to protect it.

But the government has no compelling interest in damaging Moroun’s business. He should be working with the state to assure there’s enough traffic to sustain both spans. Increasing trade traffic is the objective, after all.

Once construction begins, it will take five years to complete the crossing. There should be no further needless delays. This is a project vital to the region’s economy.

Originally posted by The Detroit News

New Detroit bridge owes existence to Canada

There is one thing to be said about the Detroit River International Crossing: Canada wants it; it wants it badly.

The new bridge between Detroit and Windsor has been a tough sell on this side of the border. Michigan taxpayers never were enthused about it, so Gov. Rick Snyder worked out a deal with Canadian leaders that funds the bridge’s construction with an estimated 2.1 billion Canadian dollars.

When the Obama administration didn’t include money for the bridge’s U.S. customs plaza, the Canadians again stepped up. The Canadian government has agreed to pay the $250 million cost for the inspection plaza on the span’s Detroit side.

If Canada’s financing of the U.S.-Canadian bridge appears unusual, it is. But supporters cite the span’s importance to U.S.-Canadian trade — and Canada wants that trade enhanced.

“A new Windsor-Detroit crossing remains one of Canada’s top infrastructure priorities for Canada,” Canadian Transport Minister Lisa Raitt said in a statement on the plaza construction agreement.

Canada will recoup its investment in toll revenue when the bridge opens. So Canadian politicians are assuring their constituents that the project won’t require new taxes. Everybody wins.

Still, it is worth noting what can happen when Ottawa is on board even when Washington is not.

Port Huron’s Blue Water Bridge plaza was scheduled for substantial expansion some years ago, but the federal dollars dried up. That didn’t happen before a large swath of the city lost its homes and business to the expansion’s footprint.

Apparently, Canada never was as interested in augmenting trade between Port Huron and Sarnia as it is in the commerce between Detroit and Windsor.

In any case, Port Huron and St. Clair County still are recovering from the scrapped plaza expansion’s effects. As remarkable as the effort to build a new Detroit-Windsor bridge and its U.S. plaza might be, there is little appetite here for revisiting the Blue Water Bridge plaza project.

The lesson is when Washington is broke, Ottawa might be willing to take on the financing — but that depends upon the project. The Blue Water Bridge undoubtedly is a vital instrument of U.S.-Canadian trade. Expanding its U.S. Customs Plaza proved to be less vital.

On that point, Washington and Ottawa seem to agree.

Originally posted by The Times Herald

Moroun loses another court decision in attempt to block the NITC

Foes of new bridge won’t be heard by U.S. Supreme Court

David Shepardson
The Detroit News

Washington — The U.S. Supreme Court said Monday it will not review a June decision by a appeals court that upheld the Federal Highway Administration’s decision to select the Delray neighborhood of Detroit as the preferred location for a new international bridge crossing to Canada.

Without comment, the Supreme Court let stand the Sixth Circuit Court of Appeals’ affirmation of a 2012 ruling by U.S. District Judge Avern Cohn dismissing a lawsuit by the Latin Americans for Social and Economic Development, Citizens With Challenges, Detroit Association of Black Organizations and other community groups — along with the Detroit International Bridge Co., which owns the privately held Ambassador Bridge and wants to build one next to it.

The court’s decision comes five days after Canada and the United States reached a deal in which Canada will put up the hundreds of thousands of dollars to build a U.S. Customs plaza at the new Windsor-Detroit bridge and be repaid through tolls. The bridge could open as early as 2020.

Sara Wurfel, press secretary to Gov. Rick Snyder, praised the ruling last year: “The decision affirms the exhaustive work and public transparency that went into the siting decisions. This is the latest round of great news regarding the NITC.”

A panel of the appeals court wrote that the federal agency used a “a lengthy, reasoned process based on an objective analysis subject to public scrutiny throughout.” The panel also rejected the contention the United States yielded to Canada’s opposition to adding a second span to the Ambassador Bridge, writing the United States did not “rubber stamp” the decision.

Mickey Blashfield, director of governmental relations for the Ambassador Bridge, last year criticized the appeals court ruling. He did not have an immediate response to the U.S. Supreme Court’s decision.

The highway administration “refused to consider the Ambassador Bridge Twin Span even though it was the highest ranked alternative in most of the environmental tests the (agency) was required to apply. The (agency) supposedly based its decision on the unsupported claim that Canada objected to the environmental impacts the Twin Span would have in Canada, despite no evidence of any such impact,” Blashfield said.

Opponents argued the highway agency’s review and 2009 approval violated the National Environmental Protection Act, Administrative Procedures Act, principles of environmental justice and other federal laws.

The ruling is the latest setback to foes of a bridge crossing known as the New International Trade Crossing, which is to be two miles from the Ambassador Bridge.

In June, the U.S. Coast Guard issued a required permit for a publicly owned bridge from Detroit to Canada — clearing another key hurdle in the high-profile project. A federal judge in Washington, also in June, rejected a legal motion to force the Coast Guard to issue a permit to Ambassador Bridge owner Manuel “Matty” Moroun for his proposed six-lane span alongside the Ambassador Bridge.

Moroun’s bridge company has been fighting efforts by the state of Michigan and the Canadian government to build the bridge it insists will harm the Ambassador’s business. In court filings, the company argued it needs to build a second span across the Detroit River to handle traffic while it repairs the Ambassador so it can compete with the publicly financed bridge.

Originally posted by The Detroit News

Thank goodness for the Canadians

Canada has agreed to cover all construction costs of the U.S. customs plaza, and with the deal removed the last political hurdle Wednesday for the planned $2.1-billion Detroit River bridge.

The Canadian government has agreed to pay the $250 million cost for the inspection plaza in Detroit under a deal agreed to by both countries.

It had been hoped the Obama administration and Washington would pay for construction of its own customs plaza, but that will not happen under the newly signed agreement.

Canada along with a private sector partner soon to be selected by the Windsor-Detroit Bridge Authority — which is overseeing the project’s completion — will now be paying the Detroit River International Crossing project’s full construction costs.

The public-private partnership is expected to recoup construction costs in the years ahead through tolls and other potential revenue generators such as duty-free goods and gas.

“I am pleased to confirm that following significant discussions with the United States and Michigan, Canada has now signed an arrangement to ensure the new publicly owned bridge between Windsor and Detroit can proceed without further delay,” said Lisa Raitt, Canada’s transport minister on Wednesday.

The U.S. inspection plaza will be procured as part of the public-private partnership assigned to design, finance, construct, operate and maintain the DRIC bridge project, she said.

Taxpayers will not be on the hook for any of the costs, Raitt said.Under the agreement, the U.S. Department of Homeland Security has agreed to cover all U.S. customs staffing costs for the new bridge.

“This arrangement is good for Canada and for Canadians,” Raitt said. “It also allows Canada and Michigan to move the project forward immediately to its next steps which include further design work and property acquisition on the U.S. side of the border.”

Canada’s top political leaders, including Prime Minister Stephen Harper, have listed the DRIC bridge project as the nation’s No. 1 infrastructure priority and promised it will open to traffic by 2020.

The new international bridge will link the downriver industrial communities of Brighton Beach and Delray.

A Homeland Security spokeswoman in an email statement Wednesday indicated there is a commitment from Washington to spend about $100 million in the first year of the customs plaza operations for equipment, staffing and setup costs in Detroit, plus up to $50 million for staff in each of the following years.

“This arrangement results from several months of productive discussions among the U.S. Department of State, U.S. Customs and Border Protection, U.S. General Services Administration, State of Michigan, Windsor-Detroit Bridge Authority and Transport Canada,” said Marsha Catron.

She said although the U.S. government is not paying any construction costs, it is very supportive of the DRIC bridge project. Catron cited numerous U.S. federal approvals to date including issuance of a President’s permit from the Obama administration.

“The United States will continue to support (DRIC) as it is built and following its completion,” Catron said.

“The United States and Canada are vital economic partners and steadfast friends. Canada is the largest trading partner of both the United States and Michigan. Many U.S. and Michigan jobs depend on the vitality of U.S.-Canada trade.”

The Windsor-Detroit corridor is the largest commercial crossing in North America.

In 2014, annual Canada-U.S. trade in goods was approximately $658 billion with over one-quarter of that trade travelling through the Windsor-Detroit corridor.

“The arrangement announced today ensures we can continue to build momentum on this much-needed trade and transportation link,” Catron said.

Michigan Gov. Rick Snyder — a driving force to get the DRIC bridge approved and constructed — applauded the agreement.

“I’m appreciative of the work of our partners in Congress and the Canadian government to ensure the (bridge) — important to both of our countries — continues to move forward,” Snyder said.

Finding a resolution on the U.S. customs plaza had been one of the last unresolved hurdles slowing construction of the DRIC bridge, said Sen. Gary Peters (D—Detroit) another leading advocate of the project.

“As a longtime advocate for the (bridge), I am pleased the United States and Canada have reached an agreement on construction of a new customs plaza removing a significant obstacle that has delayed this critical infrastructure project from moving forward,” he said.

Peters in his role as a member of the Senate’s Homeland Security committee will work with the Obama administration to “ensure the U.S. fulfills our commitment to fully staff and operate this border crossing,” he said.

The project’s next steps include ramping up property acquisition in Detroit to make room for the new bridge plaza and a feeder road in Delray that will link to I-75 freeway.

Nearly all required property on the Canadian side is already in the hands of the federal government, with land clearing in Brighton Beach just recently completed.

The WDBA is in the midst of hiring blitz to staff its support office in Windsor with about three dozen employees whose first task will be to assemble a request for proposal to find a contractor and project partner to build the bridge.

A new border highway in Windsor to link with the bridge — the $1.4-billion Herb Gray Parkway — is expected to be fully open to traffic by the end of this year.

“The new DRIC bridge is of vital importance to the economic prosperity of communities and businesses on both sides of the border,” Raitt said. “It will also bring new jobs, opportunities and continued prosperity to communities in both countries.”

Originally posted by The Windsor Star

Canada to pay for bridge customs plaza, U.S. to operate

Gary Heinlein, Detroit News Lansing Bureau

Canada will pay for the construction of a U.S. customs plaza on a new bridge connecting Detroit and Windsor while the U.S. government finances its operations, under a deal announced Wednesday.

A Canadian public-private partnership overseeing the bridge project will pay for building the customs plazas on both sides of the border and that the United States would staff, operate and maintain the Detroit customs plaza.

“This arrangement is good for Canada and for Canadians. It ensures that all the elements of the project will ultimately be delivered through a public-private partnership,” said Transport Minister Lisa Raitt at the announcement in Ottawa, Ontario. “It also allows Canada and Michigan to move the project forward immediately to its next steps which include further design work and property acquisition on the U.S. side of the border.”

Raitt said the proposed span “is of vital importance to the economic prosperity of communities and businesses on both sides of the border.” It’s one of Canada’s top infrastructure projects, she added.

The agreement appears to remove the largest lingering hurdle for the $2.1-billion New International Trade Crossing span over the Detroit River. The publicly financed bridge is scheduled to be built two miles south of the privately owned and operated Ambassador Bridge.

The Canadian government has agreed to fund construction of the bridge and be repaid for the building of the Detroit customs plaza through toll revenue. The Obama administration has made a commitment to staff and to equip the plaza at an estimated cost of $100 million the first year and $50 million annually afterward.

The Obama administration previously said it was difficult to commit an estimated $250 million in the federal budget for building the Detroit plaza because of a congressional prohibition against earmarked money for certain projects.

The Detroit News first reported this month that an agreement was close after several months of talks. Homeland Security Secretary Jeh Johnson told The Detroit News this month that a deal between the two countries on funding the customs plaza was close.

Sen. Debbie Stabenow, D-Lansing, said in an interview Wednesday that Congress will need to approve the funding for the new customs plaza, but won’t have to act until closer to the bridge’s completion, scheduled for 2020. She said she didn’t think it would be a problem.

“The bridge has to be built first,” Stabenow said. “We all want to get this done as soon as possible.”

Canada wanted assurances that the United States would staff the customs plaza if it built the facility.

The key was getting a commitment from the Obama administration to fund the operations and equip the plaza. Stabenow praised the Canadian government for “working creatively with us to solve this last roadblock.”

“The final stage (of the talks) was just to make sure that everybody was clear that the United States would, of course, pay for the staffing and operations,” she said.

She praised the bridge as key to national security and Michigan’s economic future.

“This is really is the final critical step to be able to get this done,” Stabenow said.

She said the precise cost of the estimated $250 million to $300 million customs plaza could change before the final design is completed.

Officials from both countries explored other options but with the Obama administration refusing to propose funding and the Republican-led House refusing to add funds for years, there was little choice, supporters said.

While touring a high-tech plant in Lansing on Wednesday U.S. Sen. Gary Peters mildly criticized the Obama administration’s reluctance to fund more of the U.S. share of the project, but welcomed the deal.

“I certainly would have preferred to have the federal government being there. … putting up funds for the customs plaza but I think the important thing right now is that it’s moving forward,” Peters said.

“The key right now is to have … a commitment from the federal government to make sure that plaza’s fully-staffed as is necessary to operate it and continue to expand trade between Canada and the United States,” added the Bloomfield Township Democrat, calling the bridge “an incredibly important infrastructure project” for the state and federal governments.

Gov. Rick Snyder released a statement saying he’s “appreciative of the work of our partners in Congress and in the Canadian government to ensure that the New International Trade Crossing — important to both of our countries — continues to move forward.” He pledged to keep pushing the federal government for funds for the customs plazas there and at the Blue Water bridge in Port Huron.

As designed, the bridge would provide direct access between I-75/I-94 in Michigan and Ontario Highway 401 through a parkway in Windsor. Formal talks between to two countries toward construction of the bridge began a decade ago, and a feasibility study was completed in 2008.

The crossing between Detroit and Windsor carries more than one-quarter of all merchandise trade between the two countries, currently by way of the Ambassador Bridge and Detroit-Windsor Tunnel. The two countries estimate goods and services worth an amount approaching $2 billion flow between the U.S. and Canada daily.

The process to build a bridge began in 2001, and a 2004 joint U.S.-Canada study concluded that additional border-crossing capacity was needed for reasons including increasing traffic volume, economic security and national security concerns. The State Department approved a permit for the new bridge in 2013.

Last year, the U.S. Coast Guard issued a required permit for a publicly owned bridge from Detroit to Canada — clearing another key hurdle in the high-profile project.

In addition, a federal judge in Washington in 2014 rejected a legal motion to force the Coast Guard to issue a permit to Ambassador Bridge owner Manuel “Matty” Moroun, who wanted to build a second span across the Detroit River to handle traffic while it repairs the Ambassador so it can compete with the publicly financed bridge.

Originally posted by The Detroit News