Chinese steel allegations latest in string of stumbling blocks
The waters are still murky when it comes to the fate of a proposed $1-billion bridge between Windsor, Ont., and Detroit, Mich., though a top Canadian official remains confident a deal will be struck shortly.
Consul General of Canada to Detroit Roy Norton says he expects an agreement on the future of the publicly-owned New International Trade Crossing (NITC) between the Canadian and Michigan governments in a matter of weeks rather than months, but that doesn’t mean things have been easy.
From an ongoing battle between Michigan Gov. Rick Snyder and Ambassador Bridge owner Manuel Moroun to recent allegations that Chinese steel may be used in its construction, the much-maligned NITC has been stalled by a number of small issues, according to Norton.
“I think we’re close but it’s not (stalled) because of one single issue like where the steel would come from,” he said. “It’s got more to do with the dotting of ‘i’s and the crossing of ‘t’s.”
Despite Michigan bureaucrats remaining tight-lipped about what hurdles still stand in the way of an NITC deal, Norton said one sticking point is the definition of Snyder’s role as governor and whether he has the legislative power to go through with the bridge project without support from Michigan’s Legislature.
“He can’t spend a dime of Michigan money on anything because the legislature didn’t appropriate any money,” Norton said.
With the financial question marks out of the way—the Canadian government has committed to covering Michigan’s $550-million bill—the sourcing of materials for the project seems to be the latest stumbling block.
As arguably Canada’s most valuable border crossing—almost 30 per cent of all Canada-U.S. trade crosses the Detroit River each year—Norton said the need for an additional bridge is obvious and the project wouldn’t get hung up on an issue like the where the steel would come from.
“The notion that somehow we failed to reach agreement on what’s Canada’s number one national infrastructure priority because we’re adamant or insistent that it be built with Chinese steel is just dumb and uninformed and counter-intuitive and wrong,” he said.
The Canadian government has no preference for using Chinese steel, according to Norton, but rather open procurement for government projects.
Norton, though, said Canadian policy matters little in the grand scheme of this project. Its international nature makes way for the writing of new policies specific to the NITC construction.
“What was going to be necessary from the beginning … was that the two governments—Michigan and Canada—would have to arrive as part of the process in reaching an agreement on a rule or a policy that would apply to procurement for this bridge,” he said. “You didn’t have to be a rocket scientist to figure out that between Canada’s open procurement policy and Michigan (and) the USA’s ‘buy America’ policy it was highly unlikely … that we would agree ever on a policy whereby the bridge would be built of Chinese steel.”
That hasn’t stopped the United Steelworkers (USW) from entering the fray, with national director Ken Neumann writing a letter to Transport Minister Denis Lebel voicing concern over the use of foreign materials and the importance of a “buy North American” policy for the project.
“We’re very supportive of the project and truly believe it should proceed,” he said, “but it should proceed with North American steel.”
What’s more, the project is continually bombarded by attack ads and lobbying efforts from Moroun and his Detroit International Bridge Company.
Moroun owns the 83-year-old Ambassador Bridge which, according to the Michigan Government, currently handles 95 per cent of the 8,000 commercial trucks that cross the Detroit River each day.
According to a Wall Street Journal story published in October, 2011, 7.3-million vehicles crossed the Ambassador Bridge in 2010, generating approximately $60-million in revenues for the Detroit International Bridge Company.
In a June 2010 study by the Wilbur Smith Associates commissioned by the Michigan Department of Transportation, anticipated traffic volumes on the NITC in its first year of operations are 9,000 passenger vehicles and 9,500 commercial vehicles on an average weekday.
These numbers, according to the study, would generate US$70.4-million in its first year, with expected growth to exceed $123-million by 2025.
Norton said he can appreciate Moroun’s instinct to protect his company’s assets, but doesn’t appreciate the way the Ambassador Bridge has handcuffed millions of Canadian and American citizens while the Morouns reap the benefits of private ownership of one of North America’s busiest trade routes.
“They have a monopoly and they enjoy monopoly profits … and they would like to maximize those for as long a time as possible,” he said. “I’m not rushing to their defence—I deplore their tactics.
“I think they hold hostage the interests of millions of Americans and millions of Canadians to (the) advantage (of) their own interests.”