Canada willing to finance Michigan portion of new bridge
Canada is willing to finance Michigan’s portion of a new international bridge between Detroit and Windsor and is prepared to absorb the loss if for some reason tolls do not generate enough revenue to repay the loan.
In a two part interview with Mlive’s Jeff Wattrick, Canada’s top Midwestern diplomat Roy Norton said that the New International Trade Crossing is the number one national infrastructure priority for Canada, which does 70 percent of its trade with the United States.
Ensuring a reliable system for moving goods between the countries is critical to economic development, he said.
We’re not in the habit, the Canadian government, of making dumb financial decisions. We’re a pretty well managed country. And that for a whole bunch of reasons, a whole bunch of policy choices. It’s not in our nature to offer to pay or to assume liability for all of the costs of a project like this. But it’s so important to us. We’re mindful of the budgetary situation the state of Michigan is in, so we have said in this extraordinary circumstance that we’re prepared to assume all of the costs and guarantee all of the liabilities.
We’re convinced we’re going to get paid back, and we’re going to get paid back once the private sector operator brings a billion dollars, give or take—more likely take in the sense that it could just as easily be $900 million as it could $1 billion—for the purposes of building the span itself and the two toll plazas. Once they’ve recouped their investment over 25 years or so, then Canada gets paid back its’ $550 million it’s fronting to the private sector developer to built the roadwork to connect the bridge to I-75. We’ll be paid back that money between year 25 and year 45 is our calculation, and from year 45 on a bridge that’s built to last 125 years, each Michigan and Canada will receive revenues of between $40-60 million a year.
Wattrick asked Norton what would happen if the bridge doesn’t generate enough toll revenue to pay off the money it is fronting for the project’s Michigan portion.
We suck it up. The government of Canada assumes all liability associated with that money.
The bridge builder/developer assumes liability with regards to the project they’re contributing, so if it costs $1.2 billion that will be their responsibility to suck up. But, in terms of the $550 million, if the bridge were never to become profitable, Canada eats the $550 million and the government of Canada is fully mindful of that risk. It’s quite an affordable risk; it’s quite a manageable risk.
In June Gov. Snyder asked the Legislature to approve the bridge project by July 1. Lawmakers have insisted that they need more time to consider the deal.