Lately, the Canadian Embassy in Washington has been circulating a fact sheet that tries to make the case for why we need a New International Trade Crossing (NITC) between Detroit and Windsor. We decided to take a closer look, and not surprisingly, we found its claims both completely untrue and shaky at best.
“Benefits” of the NITC
Claim: The new bridge will reduce delays due to congestion.
Reality: Any delays along the U.S.-Canada border at Detroit-Windsor are due to a lack of staffing of customs booths, not a lack of capacity. Building the NITC would actually exacerbate the customs staffing problem, as the Canadian Border Services Agency has cut numerous front-line positions, and would now be tasked with staffing another international crossing in the Detroit area.
Claim: The NITC would create 10,000 construction jobs in Michigan.
Reality: As we’ve pointed out before, the 10,000 number represents total person-year jobs, not total jobs created each year. In addition, these jobs are temporary, and they are not only Michigan-based jobs, but include positions in surrounding states.
The “Heartland” Trade Corridor
Claim: According to the Public Border Operators Association (PBOA), truck traffic is projected to increase 128% over the next 30 years.
Reality: This projection is misattributed, as the PBOA doesn’t make traffic predictions — the number actually comes from a 2005 study by the IBI Group. But as we learned from a new analysis by O’Keefe & Associates, using this number is highly irresponsible, because it doesn’t account for the 2008 financial crisis or the recession. Actual border-crossing data between 2004 and 2011 directly contradict the projections from the 2005 IBI Group report.
Financing for the NITC
Claim: After enough toll revenues have been collected to repay Canada’s $550 million loan to Michigan and approximately $1 billion to a private firm that will build, operate, and maintain the bridge for a concession period, Michigan will receive $50 million per year for the remaining 80 years of the bridge’s life. This is expected to occur in 45 years.
Reality: This plan is based on the government’s highly optimistic traffic projections, which the O’Keefe analysis shows are notoriously unreliable. In fact, the O’Keefe analysis demonstrates that it is very uncertain whether Michigan will ever share in profits, because between traffic shortfalls and cost overruns that are common for this sort of project, Canada’s unreturned investment could balloon up to $8.6 billion. When Canada tires of footing the bill for the project on its own, it could easily amend or terminate the Crossing Agreement, leaving Michigan taxpayers stuck with the bill.
Claim: Buy America policy, which mandates the use of only U.S.-produced iron and steel on any projects that count toward a state contribution to receive federal highway matching funds, doesn’t apply to the NITC.
Reality: Buy America requirements certainly do apply to this project, as seen by the fact that Governor Snyder applied for a waiver from the requirements, which he has yet to receive. In addition, Canada’s fact sheet is dated July 2012, before the comment period on the requested waiver even closed.
The bottom line: The case for the NITC doesn’t hold water. Before Michigan gets locked into a boondoggle project for a bridge it doesn’t need, the people must have a say. This November, vote YES on Proposal 6.