The simple notion underlying international trade is that every country has to have a balance. Only three things are counted in this balance—goods, services and capital. Canada tends to run a surplus in goods, a deficit in services and capital inflows or outflows make up the difference. We export cars and oil and import films and travel. Yes, I know it sounds odd, but our snowbirds ‘import’ their sun and even take themselves and their money down to the ‘exporter’. Capital is imported to build mines and factories and exported to buy US banks. Exporting stuff is vital for us.
This came to mind when my wife and I spent 8 months at Michigan State University in 2010-11. I was the Fulbright Professor attached to their Canadian Studies Center. Early on, I noticed that there was a railroad line going through the East Lansing campus and on into Lansing, the State Capital. It turned out to be the CN line that started in Halifax and went through to Chicago. It was a busy line and I soon realized that most of the rail traffic was coming from the Port of Montreal and going straight through to Chicago. Both Nova Scotia and Michigan were left out. We Nova Scotians watch the cargo ships go by while Michiganders hope for the trains to stop and unload some of their cargo. Later, back in Halifax, a couple of interested friends and I tried to develop a relationship between these two places to maybe find some way to help each other out, but the effort fizzled. That’s another story, someday.
While I was at Michigan State, I ran across another goods export transportation story. In 1929, a bridge connecting Detroit to Windsor, called ‘the Ambassador Bridge’ was completed. Eighty-odd years on, this has become the busiest international crossing in North America, if not the world. A serious chunk of Canada’s goods trade is tied up in the movement of autos, trucks and parts from Michigan to Ontario and back. The 20/401 expressways following the St. Lawrence watershed to Detroit has become Canada’s eastern ‘main street’. Today, the bridge is too small and too old to perform its intended function. Up to this point, everyone agrees, but then things get sticky. Really sticky.
The Ambassador Bridge is privately owned, unlike most others which are part of the public road infrastructure. The owner, Manuel Moroun, a Detroit businessman, has been interested in adding a second span right next to the original bridge, which exits into the University of Windsor campus. As well, the connector from there to the 401 is one of the City’s main shopping streets. Nobody on the Canadian side wants the existing traffic coming through this route, let alone more. The Canadian governments (federal and provincial) have proposed an alternative location downstream on the Detroit River that can easily be connected to the 401 and, on the other side, to the US Interstate network. Some householders would be affected, but nothing like the miles of homes and businesses were the existing bridge exits to be upgraded.
In 2010, a new State legislature and Governor were elected. Many or most of the new Republican legislative majority enjoyed campaign contributions from Moroun. The new Republican Governor is a former Gateway Computer CEO and has a commitment to bring jobs to a State that had never recovered from the recession of 2000-1, let alone that of 2007-8. By and large, the Michigan corporate community, and especially the auto industry, backed the the Detroit River International Crossing (DRIC).
Things got stickier when the new Governor went off to Washington and came back with a commitment from the Obama Administration that they would count half of the DRIC bridge expenditure as credit toward Michigan’s share of other federal-state highway expenditures. Round One to DRIC.
Republicans like roads, especially rural Republican legislators, but they didn’t want the bridge. Moroun was a friend. Round Two to Moroun.
Then Moroun hired Dick Morris, a bare-knuckled Republican ‘strategist’ to help out. His people began a campaign to tell people that there was a secret agenda that would cost Michigan taxpayers serious money for DRIC, even though the Canadian government had agreed to finance the whole thing and recover the cost from tolls. Morris’ people also went to the downstream neighborhood that would be affected by DRIC and posted fake ‘eviction notices’ on all the houses. Round Three to Moroun.
The Governor then found some legislation passed for other purposes that allowed him to declare that a facility or piece of infrastructure was vital to the interests of the State and go ahead without legislative approval. Round Four to DRIC.
The Governor met with the Ontario Premier and the Canadian Prime Minister in the summer of 2012 to sign on to the deal. Round Five to DRIC.
By now it was run-up time to the 2012 election and Moroun sponsored a ballot initiative to prevent the construction of any significant infrastructure facility without taking it to the people in a referendum. He got the Koch brothers’ ‘Americans for Prosperity’, one of the most powerful conservative organizations in the country, to back his fight against DRIC. Round Six to Moroun.
In the 2012 elections, Obama won and this sealed the roads deal he had made with the Governor. Surprisingly, in spite of a serious funding mismatch, Moroun’s ballot initiative was soundly defeated, 60-40. Round Seven to DRIC.
On April 12 of this year, the US government issued a presidential permit that allows the construction of DRIC, renamed the New International Trade Crossing, to proceed. Round Eight to DRIC.
Moroun is continuing to oppose the project through the courts, claiming he has a ‘perpetual and exclusive right’ to build a bridge across the River, but this is seen by the Governor as a delaying tactic. Construction of the DRIC/NITC is expected to begin in 2015 and be completed in 2020. Round Nine to DRIC.
There is probably another round of this battle left to go. It would not be surprising to see a move in Republican circles to try and replace the Governor in 2014, though this may only give the election to a Democrat. There may be more ballot issues and even hope that a new Administration in Washington in 2016 might overturn the NITC permit, but these are long shots.
Canada’s ability to move its Eastern goods to market has been strengthened by the victory for the NITC. Now, we have to see if its rough equivalent in the West, the Keystone XL Pipeline, will also get Washington’s approval.
No comments:
Post a Comment