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: Another step forward on a new bridge

There is progress on the New International Trade Crossing. That bodes well for all of Michigan, the U.S. and Canada, as a more efficient crossing will benefit business on both sides of the border.

Gov. Rick Snyder and Canadian Transport Minister Lisa Raitt announced a new authority to oversee construction of the bridge between Windsor and Detroit.

The Windsor-Detroit Bridge Authority will be international. Snyder named three members at a news conference this week.

The Moroun family, owners of the Ambassador Bridge, have fought relentlessly to block the bridge project, but their efforts — including an attempt to pass a 2012 ballot proposal that would have hampered the bridge project — have failed.

While there remains a question of federal funding to construct a customs plaza in Detroit, Snyder and Raitt said that would not stand in the way of efforts to begin construction of the bridge, called by Snyder the New International Trade Crossing.

One hurdle still ahead: U.S. government officials have not yet committed funds for a customs plaza needed as part of the project. Michigan’s congressional delegation should keep that need top-of-mind — and Michigan voters should question candidates about it this fall.

The Detroit-Windsor crossing is one of the nation’s busiest. Automakers and other manufacturers, as well as major business groups, former governors from both political parties and numerous others support the new bridge. Canadian officials want a better route than the existing bridge provides for traffic on their side of the crossing. Business wants better efficiency. And many note that private ownership of a major international bridge is a risk to national security.

Snyder has kept this project moving. Now the Congressional delegation must do its part.

An LSJ editorial

GEISS: Data shows need for New International Trade Crossing

Daily Tribune

By Doug Geiss
Michigan State Representative

To say that 2012 was politically tumultuous would be an understatement. No sooner had last year’s particularly heated election concluded than we Americans were confronted anew with the looming specter of a fiscal cliff.

At the same time, a multitude of contentious bills were rammed forward during Michigan’s lame-duck legislative session. As many of these spirited debates continue, I fear the din of controversy has muffled the conversation regarding other critical public issues, such as the New International Trade Crossing.

The need for a new bridge connecting southeastern Michigan to Ontario has been discussed for years — decades even — predating nearly every official serving in Lansing at this time.

Though significant amounts of data have been compiled demonstrating this need, questions naturally persist. To be sure, recent confusion over the NITC can be attributed to ads funded by the owner of the Ambassador Bridge Co. that attack the new bridge. Of course, these ads were criticized by fact-checkers across the political spectrum and made international headlines for being profoundly inaccurate and misleading. Let me therefore explain my support for the NITC, a plan that I find practical, common-sense and, above all, nonpartisan.

First, as I’ve mentioned, data strongly demonstrates that a new bridge is needed. Canada is a vital trade partner for the United States and for Michigan. In 2012, Michigan led all other states in two-way surface trade with Canada, and yet virtually all trucks — more than 8,000 daily — must currently cross an 83-year-old bridge that has no direct freeway access on the Canadian side. These current obstacles to traffic flow take time, and therefore cost money. Because traffic volumes are projected to increase, it is critical that a new bridge be constructed to facilitate flow of traffic from freeway to freeway across the U.S.-Canadian border.

Furthermore, if the numbers weren’t convincing enough on their own, the Canadian government believes that the bridge is so critical for growth of trade that Canada has agreed to cover the costs of the U.S. portion of the project — up to $550 million.

This brings me to my second reason for supporting the NITC: It will be built at no cost to Michigan taxpayers. This is perhaps the part of the proposal most often met with skepticism, and yet the agreement is publicly available for anyone who cares to review it.

Canada will front the costs of construction and the state of Michigan will bear no responsibility for repayment of the Canadian funding. A public-private partnership will be utilized in the construction of the new bridge, ensuring a competitive bidding process and engaging all sectors of the economy. As an added benefit to Michigan, the Federal Highway Administration will allow Canada’s expenditure of up to $550 million for the NITC project to be used to secure federal matching funds that will help complete critical road and bridge work across our state.

Third, the economic benefits of this project are enormous. Canada’s government is willing to incur the costs of the NITC project because they can do so with the certainty that the long-term economic benefits for their country will far outweigh the costs. So, too, will the U.S. and Michigan economies benefit from this new and improved infrastructure.

The project is expected to demand approximately 10,000 jobs related to its execution and up to 750 full-time NITC employees in Michigan by 2035. Furthermore, the benefits of the expanded border crossing will both generate and retain tens of thousands of jobs in Michigan and nationally. Frequent traffic delays at the border crossing are a significant barrier to economic expansion for manufacturers like our domestic auto industry, which relies on the ability to move materials between Canada and the U.S.

Finally, the aforementioned benefits of the NITC will help aid in the development of another project of importance to me, to the legislative district I represent and to the Detroit area and state of Michigan as a whole: the Detroit Region Aerotropolis. The Aerotropolis refers to the corridor along Interstate 94 from Taylor to Ypsilanti, connecting Detroit Metropolitan Airport to Willow Run Airport and the surrounding communities.

The Detroit Region Aerotropolis has been designated as a Next Michigan Development Act Corp. and is a public-private economic development agency that works to utilize vital airport access, existing infrastructure and development-ready space to attract new business to the region. Improved trade potential between the U.S. and Canada as facilitated by a new border crossing will further make the case for economic development. As these projects move forward, I am certain they will help facilitate Michigan’s re-emergence as an economic powerhouse.

For my part, I plan to continue to spread the word that Michigan is indeed open for business.

Douglas Geiss (D-Taylor) is a state representative serving Romulus, Taylor and part of Van Buren Township.

Roy Norton takes on Matty Moroun

An unconventional diplomat

The Windsor Star

Anne Jarvis

He called the owner of the Ambassador Bridge a greedy, manipulative liar. He appeared on Comedy Central’s late-night satirical The Daily Show. He campaigned in the U.S. election.

For a diplomat, Roy Norton isn’t very … well … diplomatic.

When Norton was appointed Canada’s consul-general in Detroit in 2010, then-Foreign Affairs Minister Lawrence Cannon’s instructions were brief: Get the new bridge.

Norton thought it would be a no-brainer; the Windsor-Detroit border is the largest conduit for the largest trading relationship in the world. Then he ran into Matty Moroun, the billionaire no-holds-barred owner of the Ambassador Bridge who spent tens of millions of dollars on campaign contributions to legislators, misleading ads and a bid for a constitutional amendment, all to protect his monopoly. Getting the new crossing, decided Norton, would require an unorthodox approach. That unconventional approach turned out to be key.

“I don’t think there’s anything to apologize for,” he said in an interview at the consulate in the Renaissance Center in downtown Detroit. If the situation had been reversed, he said, “you can bet the U.S. consul-general in Toronto would be doing exactly what I’m doing – taking every opportunity to convey the facts because U.S. interests are under attack.”

At 58, Norton has grey, thinning hair and glasses and wore a non-descript suit. He’s serious and reserved. He’s also interesting. He has several post-graduate degrees in public policy, administration and international relations from Harvard and Johns Hopkins. Originally from Ottawa, he has been a senior bureaucrat and advisor at Queen’s Park and on Parliament Hill, worked in Canada’s embassy in Washington, D.C. and was on one of the negotiating teams for NAFTA.

And he’s funny, with a dry wit.

(Norton likens Canada’s offer to pay for Michigan’s share of the bridge to the movie Argo, about how Canada helped rescue American hostages in Iran. “Whenever America’s interests are threatened,” he said, “it can count on Canada to come to the rescue – or in this case, front the cost of the bridge.”)

When he took over the job in Detroit, people sighed with relief. Norton knew the file, and he knew American politics.

No Canadian consulate in the U.S. is as important as the one in Detroit, which covers Michigan, Ohio, Kentucky and Indiana. More than 17 per cent of all Canadian exports to the world go to these four states.

“This is quite literally where the rubber hits the road for both of our manufacturing economies,” Norton told the Canada-U.S. Business Association in one of his first speeches.

While Norton’s predecessors entertained the principle players at lunches and dinners,trying to get their endorsements, Norton took on Moroun. The new consul-general hit the road, testifying before legislative committees at the state capitol in Lansing, teaming with Gov. Rick Snyder and lieutenant governor Brian Calley and speaking to dozens of groups across the state.

“In no developed country have I ever seen such blatant and comprehensive efforts by a single special interest to bend an entire population to its will,” he told the Southern Wayne County Regional Chamber last fall.

He called Moroun “cynical, manipulative and greedy.” He called his ads “all lies.” He said Moroun had taken Michigan hostage.

It was very undiplomatic. He was accused of slander.

“I call it as I see it,” he told me. “I try to be as frank, candid and forthright as I can. We have to cut through all the chaff and help (people) understand the facts.”

He said he suspects Windsor blogger Ed Arditti is on Moroun’s payroll. He said he reads Arditti’s blog  because “it’s good to hear what the other side is saying.”

“He’s trying to smear me, is he?” Arditti replied.

But he wouldn’t say if he’s paid by Moroun.

“I’ve had that (question) for 10 years,” he said. “I don’t deal with that any more. It’s insulting.”

When the Morouns got Proposal 6, which would have required a referendum for a new bridge, on the ballot last fall, Norton, Snyder and Calley criss-crossed the state, urging voters to defeat the initiative. Again, it was very undiplomatic. The Morouns accused him of trying to sway a foreign country’s  election.

Norton was very effective.

“There is a fair bit of cynicism here,” he told me. “There seems to be a disinclination to believe (politicians). By contrast, I stand up, raise my right hand and literally swear it’s not going to cost Michigan anything, and people seem to take note. Canada seems to have standing in Michigan.”

Norton was “absolutely essential,” said Calley, who invited him to Snyder’s State of the State speech last month, where the governor called him a “tremendous person.” In addition to his standing as the consul-general, he was clear and convincing. He also charmed audiences with his humour. Even his Canadian accent helped, said Calley. It made him sound “very distinguished.”

By far, Norton’s riskiest move was appearing on The Daily Show last month.

“Define zero,” comedian Al Madrigal asks over and over about how much the bridge will cost Michigan.

“Zero. Zero dollars, zero outlays, zero risk, zero liability,” Norton answers, first serious, then wary, then exasperated before finally smiling.

Polls before the show was taped Nov. 5  showed voting on Proposal 6 would be close, and Democrats were likely to approve it. Democrats are also likely to watch The Daily Show, Norton reasoned.

“The Daily Show was another means by which to provide facts to a target audience,” he said.

The show often skewers government officials, but he figured “if (the show) had an opportunity to take down a billionaire monopolist, it was more likely to do that than take down the government of Canada.”

He was right.

Construction of the new bridge will start next year, “absolutely by 2015,” Norton said. A presidential permit is expected in several months. Then Canada will begin buying property for the bridge in Detroit. (Yes, Canada will own land in Detroit. But Norton assured MichEconomy.com last month, “We are reconciled to the outcome of the War of 1812. We are not trying to take Detroit over again.”)

Moroun owns some of the land needed. Michigan will expropriate it.

Norton still expects Moroun to challenge the agreement to build the bridge, approved without the state legislature.

The U.S. Congress must also approve $250 million for a customs plaza. That could be difficult, Norton conceded. It’s a lot of money in a country with a budget crisis. Moroun will argue his proposed twin span would use the existing customs plaza. Norton will go to Washington this month to start ‘educating’ Congress.

“This isn’t a project for Michigan,” he said. “It’s a project that’s in the interests of tens of millions of Americans.”

Politics Wrap: Moroun goes anti-Detroit to fight bridge

Dustin Block | Mlive.com

November 4, 2012

Billionaire bridge owner Matty Moroun’s last-ditch effort to stop construction of a new bridge to Canada involves blasting Detroit. Moroun sent a flyer out in recent days with the headline, “More of your money for Detroit?” The ad also says, “Don’t let the politicians give away more pork projects and ‘special giveaways’ for the new bridge.”

The anti-Detroit sentiment is Moroun’s latest attempt to sway voters to reject the New International Trade Crossing between Detroit and Windsor, Canada. Moroun owns the Ambassador Bridge, which generates billions of dollars in tolls as the most active border crossing between the U.S. and Canada.

Moroun-backed organizers collected signatures for a Constitutional amendment requiring a state and local vote before any new bridge or tunnel is built to Canada. The question on Tuesday’s ballot is referred to as “Proposal 6.”

Moroun’s ad was denounced in the Detroit Free-Press by bridge supporters, who claim no taxpayer money will go to pay for a new bridge. The project will benefit the Delray neighborhood, but a developer will recoup costs through bridge tolls.

The Free-Press quotes a spokeswoman for Gov. Rick Snyder called Mouron’s anti-bridge campaign ads “distortions of reality.” “There is no taxpayer money involved in the building of the bridge,” Snyder spokewoman Geralyn Lasher told the Free-Press.

Despite investing $31 million into his anti-bridge campaign, Moroun’s Proposal 6 is trailing in polls. The Free-Press had the measure failing 47-42 percent in a poll released last week. The Detroit News had Moroun’s proposal trailing 52-37 percent.

Canada Fires Back At Moroun

The Windsor Star

Posted by:
Chris Vander Doelen

The Canadian government rolled out the biggest bazooka in its arsenal Thursday to fire back at U.S. tycoon Matty Moroun’s attempts to block a new international crossing between Windsor and Detroit.

With only two weeks to go until Michigan voters decide on Proposal 6, legislation which could block the new bridge, the Harper government is using a budget bill to aim its own new legislation squarely at the tactics of billionaire Moroun, who owns the Ambassador Bridge.

The purpose of the new legislation is to derail the legal delays typically employed by Moroun, the Ambassador Bridge and his trucking empire. Together the Moroun group of companies have been waging a multi-year, multimillion-dollar legal and TV advertising campaign to block construction of a competing bridge in the courts.

But the legislation tabled in the House of Commons on Thursday would effectively give carte blanche on the Canadian side to whoever is chosen to build the new bridge. It’s a blanket exemption from nearly all existing laws.

Like the controversial Bill C-38 introduced last year, “part two” of Canada’s latest budget legislation is an omnibus bill encompassing a number of wide-ranging new laws, from MPs pensions to the new bridge.

The economy and creating jobs is the focus of the budget, and the new bridge is the most important part of the bill, said Conservative MP Jeff Watson (Essex).

“We’re making the biggest statement possible by putting it in the budget implementation bill,” Watson said of the bridge bill. “Building this DRIC bridge has been the number one infrastructure priority of the Harper government since 2006. It’s core to the entire economic agenda.”

The New International Trade Crossing, as it known in the U.S., was announced personally by Prime Minister Stephen Harper and Michigan Gov. Rick Snyder in Windsor in June.

The fact the bridge legislation is appended to a budget bill indicates the importance the government places on the project: budgets are the most important bills introduced by any government, which literally stand or fall on their passage in the parliamentary system.

The “bridge law” — full name, the Bridge to Strengthen
Trade Act — would provide the Canadian-led and Canadian-financed project with a blanket exemption for any challenges that the infamously litigious the Moroun group might launch as a delaying tactic.

Dan Stamper, president of the company that owns the Ambassador Bridge and the usual spokesman for Moroun on border matters, did not return a call Thursday for comment on the Canadian legislation.

The Canadian bridge bill would create a new entity to build the bridge, and also exempt construction of the project from federal laws requiring permits, approvals and authorizations – all of which can be subject to appeals by third parties such as the Ambassador Bridge.

The new bridge would even be exempt from environmental laws, although whoever builds it would be expected to comply with “the intent” of existing laws, according to a federal backgrounder.

“But nothing changes environmentally because it’s already gone through an EA,” or environmental assessment, Watson said of the new bridge. On the U.S. side, the DRIC bridge still requires a permit from the U.S. Coast Guard and a presidential permit from the White House.

Moroun, however, is banking on Proposal 6 passing on Nov. 6, forcing Michigan to hold a referendum before the Canadian bridge can be built. State officials say the ballot proposal comes too late because they’re already signed an agreement with Canada — a claim that will probably lead to yet more Moroun-funded lawsuits in the U.S.

Canada is funding the entire cost of the DRIC bridge, including its connections to the U.S. Insterstate 75. Ottawa is counting on tolls to cover the costs; Michigan wouldn’t get a half share of the tolls until its half is paid for decades from now.

“It’s all governance issues — this is the first international P3 ever,” Watson said of the legistlation introduced by Denis Lebal, federal minister of transport.

“The nub of it is that we are moving to insulate the DRIC  (Detroit River International Crossing) from any future lawsuit on the Canadian side by exempting the DRIC from any laws under which it would have to get permits and permissions and things like that,” Watson said.

The new legislation will also amend the International Bridges and Tunnels Act, establish a new entity to oversee construction of the bridge, and create the authority of the new entity to work on the U.S. side of the border, and the authority to collect tolls.

Some of the legislation had been ready for as long as a year. But it couldn’t be introduced until Michigan and Canada announced their “interlocal agreement” to build the bridge.

Opposing points of view on Prop 6: New bridge will create jobs, fortify Michigan’s economic future

Detroit Free Press

John A. James knows that time isn’t just money; it’s also survival.

As chairman and CEO of Detroit-based James Group International, he works in an unforgiving business that doesn’t tolerate missed deadlines. From their Fort Street headquarters, James and his team must get customers what they need when they need it. When you’re part of the global supply chain, you’re only as good as your last on-time delivery.

That’s why his family-owned, 41-year-old multimodal logistics company supports the New International Trade Crossing between Detroit and Windsor. And that’s why it’s part of a broad coalition opposing Proposal 6.

The NITC will help Michigan compete globally. Modern infrastructure that allows farmers and businesses to access foreign markets is vital if we are to reap the benefits that come from exporting our abundant agricultural and manufactured products. Groups ranging from organized labor to the Big Three back the NITC because of its importance to Michigan.

About 218,000 jobs in our state are tied to Michigan-Canada trade. The NITC provides a state-of-the-art, strategically located crossing that enhances this $70-billion-a-year trade relationship.

Unfortunately, Proposal 6 doesn’t consider Michigan’s future. It preserves the lucrative monopoly enjoyed by the Ambassador Bridge owners, who are bankrolling the proposal and spending millions on deceptive advertising.

Proposal 6 supporters say there’s no such thing as a “free bridge.” Of course the bridge will be paid for — but not by Michigan taxpayers. It will be designed, built and operated by the private sector. Canada is graciously agreeing to foot the bill for Michigan’s share of the project and will be repaid by tolls on its side of the border. Our legally binding agreement makes this clear; Michigan taxpayers will not pay for this project. Here are a few other facts to consider:

• The NITC won’t put anyone out of business. In fact, the Ambassador Bridge owners can join other qualified vendors in bidding on the project.

• The NITC will generate a demand for more than 11,000 jobs during its construction. Nearly 1,400 permanent jobs will be created for the bridge’s operation, and private investment generated by the NITC is estimated to create 6,800 permanent direct and indirect jobs.

• Only U.S. and Canadian steel will be used to build the bridge.

• Michigan can leverage Canada’s $550-million contribution to the project as matching funds for U.S. federal aid on Michigan highway projects. That’s great news for motorists.

• About 99% of commercial traffic that uses the Detroit-Windsor corridor is forced to use the Ambassador Bridge. This corridor is the worst traffic bottleneck in the Pan American Freeway system. The NITC would provide a direct freeway-to-freeway connection between Michigan and Canada, bypassing residential areas.

• Having only one Detroit-Windsor bridge jeopardizes our economic security. In December 2010, we saw how fragile the current system is when a snowstorm halted trade across Port Huron’s Blue Water Bridge. This resulted in significant production losses among auto companies. The NITC provides a critical safety valve to alleviate similar situations.

• Proposal 6 is sloppily worded, defining an international bridge as “any” bridge put into use after Jan. 1 of this year. Imagine the financial and public policy consequences of asking Marquette voters to approve a bridge project in Monroe.

Don’t let Proposal 6 stand in the way of a more prosperous Michigan.

Brian Calley is lieutenant governor of Michigan.