You wouldn’t be blamed for feeling a little lost when it comes to recent news about the Gordie Howe International Bridge.
Earlier this month, Canada and the U.S. announced a fresh pact to open the long-awaited span connecting Ontario and Michigan after months of uncertainty over its future.
But the terms of that deal were opaque, at best, with top officials from each country offering differing interpretations — specifically around revenue sharing and how Canada’s debt to build the $6.4-billion border crossing plays into that.
After much criticism and speculation, Canada posted the text of the agreement online late Tuesday night.
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But there’s also a deal from 2012 that includes some toll revenue splitting. The text of the new pact says it doesn’t change anything in the 2012 agreement.
So what’s the difference?
The key to understanding it is that the 2012 deal is for sharing toll revenue with the state of Michigan many years down the road, while the most recent agreement is for sharing revenue with an economic development fund controlled by the U.S. federal government for the first 15 years.
Let’s break down what we know about how that will work, ahead of the official opening of the bridge in the coming days.
In June 2012, then Prime Minister Stephen Harper and Michigan Gov. Rick Snyder announced their respective governments had struck a deal to build a still-unnamed bridge connecting Windsor and Detroit.
The over 50-page agreement laid out the legal and financial structures underpinning the project, which had an estimated cost of $1 billion at the time.
The deal was a major step forward to build a new span within the busiest land border crossing in North America, especially given the issue of commercial truck traffic clogging city streets leading to the nearly century-old Ambassador Bridge.
Canada’s willingness to pay for the new project came as Michigan was still reeling from the 2008 financial crisis.
“That’s what friendship is all about — stepping up and helping someone,” Snyder said at the announcement. “A special note of thanks to Canada, for your generosity and thoughtfulness in this project.”
Under the agreement, Canada would fund construction of the bridge, Canadian inspection plaza, land acquisitions and a new interchange with the I-75 highway on the Michigan side.
As a result, tolls would be collected only on the Canadian side, with the revenue used to pay down the cost of the project — something the agreement said could take at least 50 years.
Once the debt is paid off, Canada will split the toll revenue with Michigan, which co-owns the bridge, per the deal.
It also said the crossing authority — now known as the Windsor-Detroit Bridge Authority — “shall be entitled to set rates” for tolls.
Much has changed since then, especially in Washington. U.S. President Donald Trump’s trade war has eroded the Canada-U.S. relationship, and he made the bridge the target of his ire earlier this year, with a social media outburst laced with falsehoods about the project and demanding that Canada provide concessions.
That post, which followed heavy lobbying and political donations from the owners of the Ambassador Bridge, sparked concerns about when the Gordie Howe crossing would actually open to the public.
After a false start last month, both governments announced on July 10 that they had reached a fresh pact to open the bridge.
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Under that agreement, toll revenue will be used to pay operating expenses, such as maintenance, snow removal and staffing. Whatever is left over — if anything — will get split in half. Canada will get one half, and the rest will go to an economic development fund “established and solely controlled” by the U.S. government.
That setup will last for 15 years. Canada will be able to use its half to start paying down the debt, while the other half will be used “for the benefit of the United States and trade between Canada and the United States,” according to the deal.
In other words, Canada will still start paying down its debt immediately with whatever net revenues it gets, but those revenues will be smaller than before. And whenever the debt is paid off, the revenue will get still get split with Michigan.
The new deal also gives the U.S. government control over some changes to toll rates — something it didn’t have before.
Canadian officials will host a ribbon-cutting event on Friday before the bridge opens to traffic on Monday.
