The Conservative government and the Michigan governor's office have secured a deal to build a second bridge between Windsor and Detroit – a historic accord aimed at unclogging North America's most important trade artery after decades of setbacks.
Prime Minister Stephen Harper will visit Windsor and Detroit on Friday to unveil the agreement alongside Michigan Governor Rick Snyder.
The bridge deal creates an authority to oversee the construction, operation and financing of the project, which is forecast to cost as much as $4-billion and take up to five years to build.
The new bridge, currently known as the Detroit River International Crossing or the New International Trade Crossing, will offer an alternative route for trucks at Canada's busiest commercial border conduit – one that carries one-quarter of the goods traded between Canada and the United States each year.
The bridge agreement is a victory for Mr. Harper, who has championed efforts to ease trade with the United States through his perimeter security accord with U.S. President Barack Obama.
But it is also a feat for Mr. Snyder, who struck a deal over the opposition of the Michigan legislature, which has refused to make any money available to finance the project.
Despite the agreement, the struggle is far from over to build the bridge.
Matty Moroun, the Detroit owner of the existing Ambassador Bridge, has fought against a second span with political manoeuvres and public relations campaigns.
He is expected to launch further legal action to thwart this deal. Mr. Moroun is also trying to enshrine into Michigan's constitution a rule requiring a state-wide referendum before another bridge is built.
The agreement requires Canada and the United States to compromise on a hot-button subject: the rules stipulating where the material to build the bridge and associated U.S. infrastructure must come from. Canada would have preferred a no-restrictions approach to steel and other materials, while Michigan had favoured a "buy American" rule.
The tradeoff is that all iron and steel for any component of the bridge, or the approaches and customs plaza on the U.S. side, must originate from Canada or the United States. The measure is an attempt to reassure Michiganders who were warned by bridge opponents that the steel might come from cheaper overseas suppliers in China or South Korea.
Canadian steel mills produce the plate and concrete reinforcing bar that will be used in the bridge, but the main structural support beams will likely come from U.S. mills.
The fact that Canada even gets a say on the origin of materials for the U.S. infrastructure reflects the financial burden Ottawa is assuming.
The bridge will be financed and built by a private contractor – yet to be selected – but Canada is shouldering the majority of the upfront costs to build related infrastructure, such as extension roads approaching the bridge, on both sides.
This reflects the fact the deal is being conducted over the wishes of the Michigan legislature. Ambassador Bridge supporters in the legislature have repeatedly opposed the project and taken action to ensure the government of Michigan cannot spend money on the project or collect tolls.
To get around this, Ottawa is stepping in with a cheque. The Canadian government will pay $550-million to build Michigan's share of the road approaching the new bridge on the Detroit side – an amount to be repaid in toll revenue.
Plus, the toll collection booths for travellers heading either way will both be located on the Canadian side of the span because Michigan does not have the legislative authority to accept fees for bridge crossings.
The project will cost the Canadian government about $1.5-billion upfront, although in about 25 years it will be repaid the $550-million it advanced to Michigan.
Ontario and Canada are splitting the $1.4-billion cost of the extension of freeway from Highway 401 to the foot of the new bridge.
Ottawa will pay the cost of the Canada customs plaza, estimated to cost $250-million to $300-million. Washington will cover the U.S. customs plaza, expected to cost the same.
About $120-billion (U.S.) worth of goods cross the border at the Detroit-Windsor crossing annually, carried mainly by the 2.7 million trucks that cross the Ambassador Bridge every year. Truck crossings are expected to more than double by 2035.
The new span is planned to cross the Detroit River about three kilometres south of the Ambassador Bridge from the Brighton Beach neighbourhood in Windsor to the Delray neighbourhood in Detroit. Environmental assessments for the bridge were completed in 2009 and Ontario, Ottawa and the U.S. have granted their approval.
With the signing of the deal Friday, Michigan will move to expropriate land on the Detroit side of the bridge.
The U.S. government will have to issue a presidential permit for the bridge.