WINDSOR, Ontario (Reuters) - Canadian Prime Minister Stephen Harper and Michigan Governor Rick Snyder announced a deal on Friday to build a new bridge linking Detroit and Windsor, a $4 billion project that officials say will help speed the flow of goods across North America’s busiest commercial land border crossing.
The new bridge, which has been years in the making, involves a creative financing approach because the Michigan legislature blocked Snyder from using state funds.
Harper went as far as to say that he expects that finding a way to get the new bridge built be will his biggest accomplishment as prime minister.
“This is a great act of confidence in the future of the North American economy at a critical time,” said Harper as he announced the pact in Windsor.
Canadian exporters have complained for years of congestion on the 83-year-old Ambassador Bridge that now serves as the main commercial connection between Windsor and Detroit, which they say has made it difficult to meet delivery deadlines and is hampering business.
The Windsor-Detroit corridor is Canada’s most important trade artery. Nearly $200 billion of commerce crosses the Windsor-Detroit border corridor annually, Canadian officials say.
Under the deal, which Canadian transport officials say will create 10,000 to 15,000 jobs in Ontario and Michigan, Canada will fund the bridge, roadwork and other associated costs of the bridge.
Canada is to pay up to $550 million to cover Michigan’s expense on the bridge, which will then allow the state to get up to $2 billion in U.S. federal matching funds.
Once the bridge opens, Michigan is to repay Canada for its portion of the cost with toll collections. Snyder said there will be no cost burden to Michigan taxpayers in building the bridge.
Several Canadian officials said construction of the new bridge will take four to five years, and one Canadian official said planning plus construction of the bridge will take six to seven years.
The total project, including construction of the bridge, customs inspection plazas, interstate interchanges and other work is expected to cost up to C$4 billion ($3.92 billion), Canadian officials say.
Through a public-private partnership, Canada will seek to have the private sector cover the costs of the bridge.
Even as Harper, Snyder and transportation chiefs for Canada, Denis Lebel, and the United States, Ray LaHood, celebrated on Friday, a possible roadblock to the new bridge waited in the wings - Manuel “Matty” Moroun, the billionaire owner of the Ambassador Bridge and long-time opponent to a second span, who vowed to continue to fight the new bridge.
“We anticipate some battles,” Harper said. “But the need for what we’re doing today is overwhelming ... We should make no mistake: Whatever battles lie ahead, this bridge is going to be done.
Snyder said there will be no cost burden to Michigan taxpayers in building the bridge. He addressed opposition to the new bridge in the Michigan legislature, including members of his own Republican party, by saying a second span was needed for economic development, adding, “I still believe we’re in a crisis.”
Snyder said on Friday that 8,000 trucks cross the current bridge each day, and traffic jams created by the trucks and passenger cars impede expansion of trade and economic opportunities for Ontario and Michigan.
“It’s time for a new bridge,” said Snyder. “Trade demands it. It’s an opportunity to create jobs.”
Canada says that 30 percent of the C$645 billion ($632 billion) in U.S.-Canada bilateral trade goes through the Detroit-Windsor corridor. And last year, Harper said, some C$130 billion of that commerce crossed the existing Ambassador Bridge.
Canada relies heavily on trade with the United States for economic growth, shipping three-quarters of its goods there.
A tunnel under the Detroit River that primarily carries passenger cars also connects Windsor with Detroit.
Mickey Blashfield, aligned with Ambassador Bridge owner Moroun and director of the People Should Decide ballot initiative, seeks to put the issue of whether Michigan should allow a public bridge before the state’s voters this November.
“The facts remain that traffic (on the Ambassador Bridge) is down 40 percent since 1999,” said Blashfield, who said that Snyder has still not made a solid case for a second commercial crossing.
Canadian government transportation officials said that despite the short-term statistics of traffic over the Ambassador Bridge, there is a clear need to prepare long-term solutions for what they say will be increased trade over the Detroit River.
“Traffic forecasts indicate that over the next 30 years truck traffic is expected to triple and vehicle traffic to double,” said Canadian transportation officials.
Much of the trade is by trucks carrying auto supplies for assembly plants on both sides of the border, as well as newly built vehicles from those plants.
Sergio Marchionne, chairman and chief executive of the No. 3 U.S. automaker, Chrysler Group LLC, said in a statement on Friday that he strongly supports the new bridge.
“A new crossing represents a tremendous opportunity to further strengthen the economies of the U.S. and Canada, the future of our company and many other businesses,” Marchionne said.
Additional reporting by Louise Egan in Ottawa and Bernie Woodall in Detroit; Editing by Leslie Adler