Canadian Prime Minister Mark Carney said the deal struck to finally open the Gordie Howe International Bridge over the Detroit River includes an agreement to split the net profits from the span’s toll revenue with the United States for 15 years, though he suggested profits in that timeframe will be minimal.
Carney told CTV Calgary on Sunday that the split of the profits for the U.S. will be placed in a fund that will be used for economic development efforts on the U.S. side of the Detroit-Windsor region.
“The word ‘net’ does a lot of work in this. We are sharing after Canada is paid back,” Carney told CTV on Sunday during the Calgary Stampede.
“So, we get the revenues. Then the servicing of the costs of the bridge and paying the debt of the bridge, and then what’s left over ― there’s a split of that for 15 years, and the U.S. money is invested back in economic development in the region,” he said. “Which is going to help drive more traffic.”
Carney cautioned that the initial years of the new $4.7 billion bridge from Michigan to Canada will be a period of building up traffic across the six-lane, 1.5-mile span. The new publicly owned bridge will compete with the privately owned Ambassador Bridge that has held a monopoly on truck traffic across the Detroit River since the Great Depression.
“There’s not going to be a lot of net to split,” the prime minister said. “So look, it’s a good deal for Canada, and what’s really good is getting the bridge done on time, on budget and to build out together.”
The split of net revenue between Canada and the U.S. economic development fund will be 50-50, according to two sources familiar with the cross-border talks but not authorized to speak publicly. It’s unclear what entity will govern the economic development fund.
The Canadian government and Michigan announced Friday that the bridge will open to traffic July 27 after the agreement was brokered following a delay by the administration of President Donald Trump.
Trump endorsed the agreement Saturday in a social media post taking credit for “a much better deal.”
“I was able to cut a MUCH BETTER DEAL for America, and by so doing, will be allowing the new and spectacular Gordie Howe International Bridge, spanning Detroit and Windsor, Ontario, to open on July 27th, as scheduled,” Trump wrote.
“The original deal made was unacceptable to me! The new deal is great, and fair. Thank you and congratulations to the Canadian Government. May we both have many years of success with this wonderful new development!!!”
The date of the opening of the long-awaited bridge has been uncertain since Trump in February threatened the block the the span’s opening until Canada treated the U.S. with “fairness and respect.”
Commerce Secretary Howard Lutnick and U.S. Ambassador to Canada Pete Hoekstra have led the negotiations with Canada since a June 12 ribbon-cutting opening ceremony was abruptly canceled. The ribbon-cutting invitations went out after Gov. Gretchen Whitmer, a Democrat, and Susie Wiles, who is chief of staff to Trump, had talked, according to two of the sources who spoke to The Detroit News at the time.
In its Friday statement, the Canadian government sketched out broad strokes of the agreement to open the bridge, including those “focused on toll governance and transparency, as well as investments in the region, including through the establishment of a 15-year economic development fund tied to a portion of profits from bridge operations.”
“The Windsor-Detroit Bridge Authority will also work collaboratively with the Government of the United States on toll-rate adjustments, seeking concurrence for certain non-market-related toll changes,” the statement said.
A source familiar with the terms said Canada would need the agreement of U.S. officials for toll increases of more than 10% or to lower them below regional averages.
Hoekstra declined to comment Monday on the agreement’s specifics until it’s completed.
“No reason to suspect it will not be (finalized),” Hoekstra told The Detroit News. “All funds the U.S. receives will be under U.S. government control.”
The U.S. government was not a party to the 2012 bridge-crossing agreement negotiated under former Michigan Gov. Rick Snyder, a Republican, and then-Canadian Prime Minister Stephen Harper.
That deal established that Michigan and Canada share the ownership of the bridge, with Canada fronting the project costs and recouping them through toll revenues until the financing debt is paid off. At that point, Michigan would get half of the toll revenues.
Officials with the Windsor Detroit Bridge Authority, which oversaw the span’s construction, have not said when they project the debt will be repaid and did not respond Monday to a request for details about the new agreement.
Back in 2012, Michigan and Canadian officials put the repayment period at an estimated 30 years of toll revenue to repay Canada’s treasury. But the repayment period has increased by an unknown number of years due to inflationary costs and declining traffic at the Detroit-Windsor border. One former Canadian diplomat has estimated it could take as many as 70 years for Canada to recoup its costs.
Last week, Hoekstra on a podcast called it a “big myth” that Canada funded the bridge, noting that the Canadian government loaned the infrastructure authority behind the bridge $4.5 billion to $5 billion.
“Canada is serving as the bank for the bridge,” Hoekstra said on the podcast. “The expectation is that over the years, as the bridge generates revenue, the bridge will be paid back. So the bridge will actually be paid for by the folks who are using the bridge. It will not be paid for by the Canadian government.”
Whitmer said in a Friday statement the bridge has “always been a great deal for our state,” calling it a “testament to the enduring partnership between Michigan and Canada.”
“Thousands of Michigan workers built this critical bridge, which will speed up auto production, lower costs, ease traffic, strengthen agriculture, and give people on both sides of the border better-paying jobs and brighter futures,” Whitmer said.
“I’m proud to have fought for its opening and congratulate my partners who have worked on this issue alongside me for years.”
A new date for the bridge’s ribbon-cutting ceremony has not been announced.
mburke@detroitnews.com
This article originally appeared on The Detroit News: Canada to split bridge profits with U.S. fund for 15 years under deal
Reporting by Melissa Nann Burke, The Detroit News / The Detroit News
USA TODAY Network via Reuters Connect
By Melissa Nann Burke, The Detroit News | USA TODAY Network
