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international trade

The Ambassador Bridge spans the Detroit River dividing Canada and the U.S., is shown on Friday June 15, 2012.Mark Spowart/The Canadian Press

A key remaining hurdle has been cleared in the effort to build a second bridge between Windsor and Detroit – a span that will broaden Canada's most vital trade conduit with the United States.

A U.S. presidential permit has been approved for the international crossing and Michigan Governor Rick Snyder is expected to announce the development on Friday, a source told The Globe and Mail.

This is the final political green light that was thought to be required for the project.

The owner of the existing Ambassador Bridge – who has fought a new span – isn't giving up though. Matty Moroun has reportedly filed a lawsuit against several U.S. government departments as well as the Canadian government. In the lawsuit, Mr. Moroun claims a "perpetual and exclusive franchise right" to operate the crossing free of competition from another span. It says the proposed new crossing would "destroy" the value of the bridge's franchise, according to the Detroit News.

Last spring the Harper government and the Michigan Governor's office announced 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.

The bridge deal created 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 is a victory for Prime Minister Stephen 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.

Mr. Moroun, the Detroit owner of the existing Ambassador Bridge, has fought against a second span with political manoeuvres and public-relations campaigns.

He failed however last November in a public campaign to enshrine into Michigan's constitution a rule requiring a statewide referendum before another bridge is built. Voters rejected the idea in a ballot.

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 stepped up 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 at $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. granted their approval.