This is not how completion of the Gordie Howe International Bridge should have ended, with Canada giving in to another U.S. shakedown.
A few days before the bridge’s originally scheduled opening on June 15, U.S. President Donald Trump renewed his threat, first stated in February, to block the opening of the Canadian-built and financed Windsor-Detroit bridge.
Trump claimed that Canada would reap too large a portion of the tolls collected from the bridge. He said the U.S. should derive revenue from the bridge.
On July 10, Ottawa announced it had reached a deal with Washington that will see the bridge open on July 27.
The Gordie Howe bridge will strengthen one of the world’s busiest trade corridors, which conveys an estimated $1 billion in goods each day.
The consensus of Canadian political and business leaders tilted to doing whatever deal was necessary with the U.S. to get the bridge opened. Only a bad deal was on offer, and Ottawa took it.
Mark Carney, the prime minister, had impressed on Trump that a great deal of U.S. labour and steel had been used in the bridge’s construction.
And Carney told the president that the entire $6.4-billion cost of the bridge was paid by Canada to break the monopoly of the Ambassador Bridge, the new bridge’s nearly 97-year-old rival. But Trump held out for a deal that profits the U.S. unfairly.
In blocking the Gordie Howe, Trump was effectively ripping up the 2012 Windsor-Detroit bridge deal between Canada and the government of Michigan.
“This is not just a story about a bridge,” Colin Robertson, a former career Canadian diplomat, wrote in a recent Policy Magazine essay.
“Trump cannot be trusted to honour any agreement negotiated in good faith, considered by all parties to be binding, or even celebrated by him and/or his administration.”
Under the 2012 agreement, Canada was to operate the new crossing and collect all the tolls from it until the cost of building the bridge was recouped.
Retiring that debt will now take longer, because Canada has agreed to a Trump demand that the U.S. receive half of the net revenue from the bridge for 15 years.
That is a windfall, given that the U.S. has paid practically nothing toward the bridge’s construction.
The debt payments that Canadian taxpayers will absorb will be higher than before Trump’s intervention, since a portion of the tolls previously committed to debt repayment will instead go to the U.S.
Trump also demanded and got a veto over future changes in the bridge’s tolls. U.S. approval is required if the Gordie Howe raises tolls by 10 per cent or cuts them below tolls charged by comparable regional crossings.
There is only one such crossing, the Ambassador, owned by the Maroun family, a major contributor to Trump’s campaign war chest.
The Gordie Howe needs to charge lower tolls than the Ambassador to garner enough traffic to be financially viable.
But Trump’s negotiators have fixed it so that the Ambassador will win any price war between the bridges if the U.S. denies a Gordie Howe request to lower its tolls to match the Ambassador.
The thuggery here is self-evident. “As the (U.S.) president places no value on the relationship with Canada, treating us like Putin looks at Belarus, he is exercising leverage — or in other words, a shakedown,” Bob Rae, former Canadian ambassador to the UN, wrote of the bridge debacle in a recent Star opinion article.
Why did Canada agree to this extortionate deal?
Answer: For the same reason the Carney government scrapped most of the Trudeau-era counter-tariffs by which Canada stood up to Trump’s initial tariff assault.
Carney also rescinded the Digital Services Tax (DST) “to advance broader trade negotiations with the United States.” The tax would have mostly affected large U.S. tech firms.
And the government now appears to be gutting its Online Streaming Act, a bid to tax U.S. streaming giants like Netflix, Disney and Paramount on the billions of dollars in business they do in Canada.
But if Canadian trade strategists think those concessions will soften up the U.S. in an upcoming renegotiation of the Canada-U.S.-Mexico Agreement, they need to think again.
The Trump team doesn’t see much value in the many Canadian concessions to date.
“They don’t really get credit for doing something bad and then undoing it, right?” Jamieson Greer, Trump’s top trade negotiator, said last week of Canada’s reversals on policies the U.S. finds disagreeable. “That’s just good practice on their part.”
Actually, good practice would see an end to dealing with the U.S. issue by issue. Instead, the flashpoints should be bundled with all the economic, energy, security and critical minerals benefits Canada provides the U.S.
“The Trump administration’s preferred tactic is to hold hostage a Canadian asset — steel, aluminum, autos, dairy, lumber, and now, even a bridge — and demand ransom,” Robertson wrote.
This is how we’ve repeatedly let ourselves get rolled.
