Why the Gordie Howe International Bridge was 'a bad deal for Canada from the start
The new six-lane bridge connecting Windsor, Ont., to Detroit, Mich., is a grand, ambitious structure — and ‘a sweetheart deal for the U.S.’
We learned this week the outcome of
Canada’s gunpoint re-negotiation with the United States over revenue from the
new Gordie Howe International Bridge, an impressive $6.4-billion cross-border
span that Canada paid for and is now finally able to open for traffic on
Monday.
The reality of the forced amendments —
hammered out under threat from U.S. President Donald Trump who demanded changes
to a long-standing binational contract at the eleventh hour — is not so much
that it makes the new bridge a terrible deal for Canada, it’s that the changes
made a bad deal even worse, according to a source with high-level knowledge of
the business of border infrastructure.
“The original deal makes me wonder why
Trump was moping about it being a bad deal. It was a steal for the U.S., an
absolute steal,” said the cross-border specialist who requested their name not
be published as they are not authorized to discuss the matter.
“It was already a sweetheart deal. Trump
didn’t need to do anything more to make it a great deal. At the time, everyone
in the bridge community all said the same thing: This is a sweetheart deal for
the U.S.
“Canada was screwed from the beginning. It
was a bad deal for Canada from the start, and it will continue to be a bad deal
for Canada moving forward.”
Economically, it might make the Gordie
Howe a bridge too far.
The new six-lane bridge connecting Windsor
to Detroit with a main span of 853 metres, the longest of its kind on the
continent, is an ambitious and grand structure that took 26 years to create.
Visually, with tall towers anchoring
splays of 216 diagonal steel cables, it evokes the masts and rigging of sailing
ships of yore, like the clippers run by American privateers during the War of
1812 that hijacked merchant shipping.
Looking at the bridge’s economics, its
imagery of something out of step with its time seems appropriate, despite its
modern amenities; and with recent events, conjuring American raiders of the
past aiming north of the border also seems suitable.
The bridge project formally began in 2012
when a deal was signed by the government of Canada and the state of Michigan
for a new border-straddling bridge. The deal created the Windsor-Detroit Bridge
Authority (WDBA), a Canadian not-for-profit Crown corporation, that would fund
construction of the bridge, the plazas for customs facilities, and connecting
the bridge to the highway systems in both countries.
The deal stipulated that all tolls from
bridge traffic in both directions will be collected only on the Canadian side,
and used to reimburse Ottawa for funding the project before sharing revenue
with Michigan.
While the business case for a new bridge
was debated, its name appealed on both sides of the border, in honour of Gordie
Howe, a much-loved and respected Canadian hockey star who spent 25 seasons in
the NHL bringing the Detroit Red Wings to glory. Howe died in 2016, two years
before bridge construction began.
This January, the new bridge was given
final approval by Trump’s administration as an official port of entry into the
United States. Washington noted the bridge aligned with the mission of U.S.
Customs and Border Protection (CBP) by “protecting the American people,
safeguarding our borders, and enhancing the nation’s economic prosperity.”
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This February, however, as the opening of
the bridge drew close, Trump took a more personal interest in it and announced
he would block its opening until Canada “compensated” the U.S. “for everything
we have given them.” He demanded American ownership of “at least half” of the
bridge.
Trump’s demands triggered unhappy
negotiating that ended this month with an agreement to amend the original deal,
allowing the bridge to open but requiring Canada, for the next 15 years, to
share half the bridge’s revenue with the U.S., after recovering operating
costs, but before repaying its debt.
Trump’s much publicized amendments, however, might not make much of
a real-world difference, according to an analysis by a cross-border
infrastructure insider. That’s not because Canada won at the negotiating table
this month, but because Canada cut such a lousy deal in 2012.
The question now is, given the economic
outlook for the bridge, will there be any operating profit at all to share.
TOLLS AND TRAFFIC
The new bridge was originally pitched to
alleviate high traffic volume at other border crossings. The WDBA’s own
published origin story roots its timeline in 2000 with “concerns that the
existing Ontario-Michigan crossings would not support the anticipated increase
in traffic.”
That increase never came. Instead, traffic
plummeted.
From that start in 2000 through to 2024,
when ironworkers building from both sides joined their segments over the
Detroit River, cross-border traffic with Ontario dropped 41 per cent.
Combined truck and passenger vehicle
crossings over the Ambassador Bridge — just 3.5 kilometres downriver from the
Gordie Howe bridge — has dropped almost by half, from 12,220,000 in 2000 to
6,226,578 in 2024.
The spiral isn’t unique to the Ambassador.
Traffic on the Blue Water Bridge across the St. Clair River at Sarnia, Ont., is
down 33 per cent during the same time. The Peace Bridge connecting Buffalo,
N.Y., to Niagara Falls, Ont., is down 42 per cent. To the northwest, the Sault
Ste. Marie International Bridge is down 58 per cent.
With the new bridge, dropping traffic
volume will be divided further. Drivers diverting to the Gordie Howe could cut
the Ambassador’s traffic in half, the border crossing insider said.
“The Gordie Howe bridge was built under
what I would term very optimistic traffic projections. Those traffic
projections are not going to be met.”
One future-facing feature the Gordie Howe
offers is free pedestrian and bike lanes.
RENT-FREE FACILITIES
The U.S. CBP facilities on the American
side of the bridge are on a 68-hectare site, one of the largest border
facilities in North America. On the Canadian side, facilities for the Canada
Border Services Agency (CBSA) cover 53 hectares.
It includes 36 primary inspection lanes
and 41 secondary inspection bays on the U.S. side, and 24 primary inspection
lanes and 16 secondary inspection bays in Canada.
Canadian taxpayers paid to build it all.
Further, according to the U.S. General
Services Administration, the Gordie Howe site does not require the U.S. to pay any rent for its
large presence on the American end of the bridge. The WDBA’s deal for the U.S.
border post lasts 20 years with four 20-year options, likely stretching it to a
rent-free century.
That’s a rarity for border infrastructure,
where the U.S. government typically pays rent for their facilities.
Across Canada, the Customs Act requires
operators of international bridges, tunnels, railways, airports and ports to
provide free facilities for Canadian border agents. At most borders, the cost
of providing free CBSA facilities is roughly cancelled by revenue from U.S. CBP
facilities on the other side.
Not at the Gordie Howe, where the WDBA
gets no rent from either side. The bridge authority is also required to pay to
maintain all of it.
DUTY FREE-FREE
Tolls from border traffic — particularly
from commercial trucks — are the big money maker for border infrastructure, but
there is another way to pump it up: Duty free goods such as gas, booze, tobacco
and food.
The Gordie Howe bridge doesn’t offer any
of that.
“At the Ambassador Bridge, what you have
on the U.S. side is duty-free diesel fuel and gas,” said the insider. “If
you’re a trucker and you’re going into Canada and you can fill up duty-free,
why would you cross at the Gordie Howe bridge?”
Toll booths at the
Gordie Howe International Bridge. Photo by JEFF KOWALSKY/AFP via Getty
Images
There also aren’t general goods duty-free
stores at the Gordie Howe, which is unusual for a large crossing. It leaves the
bridge without a boost to nudge up revenue.
Drivers not needing duty free may make a
different route calculation, however, as the base tolls to cross the Ambassador
are considerably more expensive than at the Gordie Howe.
Stephen Laskowski, chief executive of the
Canadian Trucking Alliance, said commercial carriers are happy to have the new
crossing.
Representing more than 5,500 carriers, he said
the direct highway access at both ends of the Gordie Howe is appealing to
trucking and increased competition will likely lower tolls everywhere.
“You’re going to see some significant
shifts in traffic towards the Gordie Howe bridge,” Laskowski said. “It’s just
more relief than anything that they can now implement some logistical plans
into their operations that are going to introduce savings.”
UNBALANCE SHEET
In Prime Minister Mark Carney’s shifting
descriptions of the amended deal, he said net proceeds from the bridge would be
minimal or negative in the early years. It seems a recognition of the challenge
of profitability.
At the Gordie Howe, the base rate for a
passenger vehicle is US$5.75 while a commercial vehicle costs US$8.75 for each
axle on the truck. It is cheaper if using a pass.
For a simplistic modelling estimate,
assume the new bridge attracts half of the traffic that is currently crossing
the Ambassador Bridge; that half of all traffic uses the cheaper pass rate; and
all trucks are the common configuration of an 18-wheeler with five axles.
Those tolls would generate about $45
million a year.
The bridge’s operating expenses, however,
will be double that, at least, the border expert estimates, giving a lowball
estimate of $90 million.
Under the bridge agreement, the WDBA pays
a private sector partner, a business consortium called Bridging North
America, $1.9 billion over the next 30 years to run the bridge’s
day-to-day operations. That is about $63.5 million a year from WDBA regardless
of traffic volume.
The WDBA has other expenses, too.
“They have their own staff. They have a PR
department. They have marketing. They have a whole staff and their own
facilities,” the border source said. Those sorts of additional expenses could
be $10 million. The WDBA also must pay taxes to the city of Windsor for its
facilities on the Canadian side, estimated to be in the millions.
Children play hockey during the opening ceremony for the Gordie Howe International Bridge in Windsor, Ont., on July 24, 2026. Photo by JEFF KOWALSKY/AFP via Getty Images
Given the operating expenses and
diminishing traffic, even without paying off the debt, this modelling estimate
suggests it will be hard to find any profit to share with the U.S. — or with
Canada’s taxpayers.
“It will never ever be able to get to the
point where you have paid off that capital investment, never,” said the border
source, but there’s also a reasonable chance the bridge won’t even cover
routine operations.
MORE THAN MONEY
Public infrastructure isn’t just about
making money, of course. Value comes from more than tolls.
Even if it isn’t the deal Canadians
wanted, it doesn’t mean the Gordie Howe bridge isn’t an important and
beneficial project, said Windsor’s mayor, Drew Dilkens.
“I expect very little money will actually
flow, if any at all, into that (U.S.) regional economic development fund over
15 years,” Dilkens said of the new revenue sharing clause pushed
by Trump. “Regardless of the outcome, this bridge will exist for more than a
hundred years leaving plenty of time to ensure Canada is repaid the full cost
of construction.”
He said the Gordie Howe bridge offers a
big boost to the economy and local industries, particularly in the auto
industry. “Getting auto parts to assembly plants quickly and reliably further
supports our primary industry,” he said.
Dilkens said that the bridge being “in the
hands of a government entity and not held under private ownership” brings
stability, diversity and security.
Ryan Donally, chief executive of the
Windsor Essex Chamber of Commerce, expects the bridge to experience gradual growth as traffic adjusts to a new option.
Beyond the tolls and traffic and routing,
Donally said, the Gordie Howe brings an importance that is not tracked by
accountants or appearing on spreadsheets.
It brings greater security.
He noted the pandemic protest blockade in
2022 that shut down the Ambassador Bridge, disrupting billions of dollars in
trade and forcing manufacturing shutdowns.
“It comes down to economic safety, but
also national security,” Donally said. “If I recall, the original discussion
that we needed another border crossing is because of 9/11 and recognizing that
having redundancy is having safety.”
A request for comment from the WDBA about
its finances, the bridge’s economic challenges, and on the analysis by the
border specialist went unanswered prior to publication deadline.
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