A new bridge between St. Stephen, N.B., and Calais, Me., stood unused for a year. Why? Because the U.S. government had not appropriated funds in time to build a customs plaza on the Maine side of the border.
Could something similar happen to a much larger crossing at Windsor-Detroit, where a new bridge has finally received all major approvals necessary on both sides of the border?
With land being purchased and steel being ordered, all the pieces are in place in an enormously complicated puzzle that took years to complete. Except one: Washington hasn’t agreed to pay for a customs plaza on the U.S. side.
Should Ottawa be worried? Will the U.S. eventually finance the plaza? Or is Canada going to get stiffed into financing a plaza on U.S. territory?
A customs plaza is the responsibility of the national government, not the state of Michigan. The estimated cost for the plaza is $250-million. In President Barack Obama’s budget proposal to Congress, $420-million was allocated for new border plazas – two in southern California and one at the Thousand Islands crossing in Eastern Ontario. Nothing was proposed for Detroit.
Maybe Canadian nervousness is misplaced. The Windsor-Detroit project isn’t slated for completion until 2020. Perhaps money will be appropriated for the customs plaza next year, or the year after that. Since plaza construction might take, say, 18 months, a plaza could still be up and running by 2020. If so, Canadians should take a Valium.
That outcome would be fine – if only the U.S. administration would say that it does intend to pay. But it’s remained silent, which leads to the unhappy speculation that since Canada has wanted this bridge so badly and for so long, Uncle Sam is going to make Canada pay for the U.S. customs plaza.
If you think this sounds a tad crazy, consider that Canada has already agreed to finance Michigan’s $550-million share of the project. Michigan’s bad fiscal situation, plus the powerful lobbying of Matty Maroun, owner of the existing Ambassador Bridge, paralyzed state action.
Mr. Maroun is still fighting. He has recently been in federal court on one action and sought an injunction in another to prevent the U.S. Coast Guard from issuing a permit the new bridge would need.
He’s used every legal and political trick in the book to protect his bridge’s monopoly. In response to assertions that the old bridge no longer suffices, he has promised to expand the structure to permit more volume – at his own expense.
Mr. Maroun, estimated to be worth $1.5-billion, has complained repeatedly that he’s being asked to compete against a government-subsidized project. For a long time, his efforts tied up the Michigan legislature, until voters approved a new bridge in a plebiscite and Republican Governor Rick Snyder threw in his lot with the pro-bridge cause.
In desperation, Prime Minister Stephen Harper’s government negotiated a deal with Mr. Snyder in 2012 whereby Canada would pay Michigan’s share, with principal and interest returned over time through toll revenues. Once the state committed the money – Canada’s money – it unlocked an equal amount from Washington. The years-long logjam seemed broken.
Of course, the new bridge is more important to Canada than to the United States, given Canada’s greater dependence on the U.S. market. But the U.S. still sends lots of merchandise and people north. Cars are made with parts from both sides of the border. For the U.S. to refuse to finance a customs plaza would be outrageous.
Given the greater urgency from Canada, however, perhaps the U.S. will just sit tight and do nothing about the plaza, figuring the desperate Canadian government will pay for it, too. That would bring the amount of Canadian money for projects in the U.S. to $800-million, which would make repayment even longer. In other words, Canada would be asked to assume more upfront costs and associated risk.
In recent years, the Harper government has spent much political capital and lots of money lobbying for the Keystone XL pipeline – without any positive answer from Mr. Obama’s administration. It would be another nightmare if the customs plaza in Detroit followed the same path to nowhere.