Why economists say it's a bad idea to rely on a privately owned bridge for 25% of Canada's trade with U.S.

·8 min read
The Ambassador Bridge in Detroit on Monday, Feb. 7, 2022. Canadian lawmakers expressed increasing worry about the economic effects of disruptive demonstrations after the busiest border crossing between the U.S. and Canada became partially blocked by truckers protesting vaccine mandates and other COVID-19 restrictions.  (Annie Barker/Detroit Free Press via AP - image credit)
The Ambassador Bridge in Detroit on Monday, Feb. 7, 2022. Canadian lawmakers expressed increasing worry about the economic effects of disruptive demonstrations after the busiest border crossing between the U.S. and Canada became partially blocked by truckers protesting vaccine mandates and other COVID-19 restrictions. (Annie Barker/Detroit Free Press via AP - image credit)

When the Ambassador Bridge — a key trade corridor between Windsor, Ont., and Detroit — was blockaded by protesters earlier this month, it exposed a weak link in Canada's supply chain, not least because tolls from the bridge profit a company started by an American billionaire whose son now has the reins.

The protesters choked off the 92-year-old privately owned border crossing with ease.

Windsor resident Mary Ann Cuderman has been saying for years that the bridge is a "ready target."

"If they're going to make an impact, this would be the place," said Cuderman, 80, who started a bridge watchdog group and runs the Olde Towne Bake Shop, four blocks from the bridge entrance.

"An international bridge should never be privately owned," she said.

Dale Molnar/CBC
Dale Molnar/CBC

Economists, security and supply chain experts agree it's risky for Canada to rely so much on the Ambassador Bridge.

The four-lane bridge spans Canada's busiest trade route, with close to $400 million in commercial goods crossing it daily. That adds up to about 25 per cent of the total trade between the U.S. and Canada in a year.

The convoy test

Four days into the border blockades, Matthew Moroun, the chair of the company that owns the bridge, Detroit International Bridge Company, issued a statement urging Canada to take action and clear the blockaders.

Windsor Mayor Drew Dilkens feared things would turn violent as auto part supplies were constricted.

"Everyone appreciates the importance of the Ambassador," said Dilkens. "The majority of the city was telling me, 'You have to remove this blockade, and you have to do it now!' They knew they'd be sent home with no pay."

Dilkens says he needed provincial and federal help to deal with the crowd that put a chokehold on the trade artery as the city police service didn't have the training, especially, he said, given the "tenor and temperature" of the protest, with some participants saying they were "willing to die" for their cause.

The City of Windsor got a court injunction from the Ontario Superior Court of Justice to allow police to remove anybody impeding bridge traffic on the Windsor side. On the U.S. side, Homeland Security became involved.

The blockades were not the first time the Ambassador Bridge raised security concerns.

On the Canadian side, the roads that feed into the privately owned crossing are overseen by an array of authorities — from the Canada Border Services Agency (CBSA) to the Ontario Provincial Police and the city.

While Transport Canada now has safety and inspection control over the Ambassador Bridge, back in 2007, concerns were raised about who patrolled or inspected the U.S. side when trucks were filling up on discounted fuel under the bridge and the city and company disagreed on whether they posed any hazard.

So what happens if the bridge is ever blocked and the U.S. and Canadian sides are at odds over how to handle it?

CBC posed that and other questions to the OPP, which referred CBC to the CBSA.

WATCH | How border blockades impacted trade between Canada and the U.S.:

Across Canada thousands of protesters joined in after the initial convoy of big rigs headed to Ottawa where they used trucks to occupy some streets around Parliament Hill.

Smaller groups blocked key Canadian bridges and border crossings. Police in Alberta said they seized a cache of weapons and ammunition at a blockade of the Coutts border crossing, and 13 people were arrested and charged.

The demonstrations — initially sparked by objections to vaccine requirements — grew into something much larger aimed at everything from COVID-19 restrictions to anger at Canadian political leadership.

By Valentine's Day, as traffic resumed on the Ambassador, Moroun issued another statement.

"This week has shown the world just how much our shared economies rely on border crossings like the Ambassador Bridge," it read. The statement went on to suggest that both countries join together to come up with a plan "to ensure this kind of disruption to critical infrastructure will never happen again."

The blockades had tested supply chain security, and it had failed.

Nicole Osborne/Canadian Press
Nicole Osborne/Canadian Press

In six days the auto industry lost $380 million as cargo chains were choked, according to an estimate by Michigan think tank, the Anderson Economic Group.

Dilkens fears what would happen to the economy if there was a longer shut down of the bridge due to a catastrophe like an earthquake or terror event.

The mayor sees the Ambassador Bridge as a cautionary tale, calling it a "prime example" of why governments should never let such a critical piece of infrastructure be held by a private owner.

A bridge too far

For years security and capacity concerns have driven a push for a Canadian-run bridge linking Windsor and Detroit.

Construction is now underway on the $5.7-billion Gordie Howe International Bridge that is rising just south of the Ambassador. It's set to open by 2024, according to the Windsor Detroit Bridge Authority. All revenue from its tolls will go to Canada.

Jacob Barker/CBC
Jacob Barker/CBC

From her window, Cuderman can now see the new span rising south of the old bridge.

"It's wonderful. It's like a weight that's been lifted off this area."

She says the new bridge authority worked to make the span pedestrian, bike and eco-friendly with grass roofing.

The bridge authority has invested $12.4 million into her street and beautified the Detroit neighbourhood on the other side of the bridge.

Cuderman hopes it's the end of "spewing" cargo trucks in her neighbourhood, and anticipates trucks will take the new route with access off Highway 401 to avoid all the traffic lights on the Huron Church Road entrance to the Ambassador.

But the road to getting a Canadian bridge has been bumpy.

Cuderman said much of the opposition came from the self-made billionaire who owned the competing Ambassador for 50 years.

Paul Sancya/Associated Press
Paul Sancya/Associated Press

Manuel (Matty) Moroun lobbied hard to keep his "unique" monopoly over an international border crossing, Ambarish Chandra, associate professor of Economic Analysis and Policy at the University of Toronto, told Paul Haavardsrud of The Cost of Living.

"We would never allow this within Canada … The Ambassador Bridge links two countries — but neither country has any obvious jurisdiction over it," said Chandra, who believes it's time for Canada to stop relying on the "decaying" infrastructure.

"It's definitely a vulnerability. We are overly reliant on a single bridge that was built in 1929. It's privately owned. So the owner can always raise tariffs and tolls whenever he wants. That's a problem."

The history of the Ambassador

Controversy over the Ambassador Bridge began before it was even built.

In the 1920s, the mayor of Detroit, John Smith, tried to veto the $23.5-million project, saying it would cost users and turn "perpetual" profit for private owners.

WATCH | The original construction of the Ambassador Bridge in the 1920s:

Once built, the bridge rose about as high as Niagara Falls, towering over the Detroit River. The 2,282-metre-long structure, which opened in 1929 and boasted a status as the longest suspension bridge in the world, inspired both daredevils and awe.

Detroit financier Joseph Bower's family sold the bridge to the Moroun family's Central Cartage Company of Detroit in 1979. It was on the New York Stock Exchange for a time, but Moroun took it private again, and it is now operated by the Detroit International Bridge Company (DIBC).

Lawyers for the company challenged Canada's plans to build its own bridge for years in U.S. courts. The challenges failed, but successfully stalled construction. Each year that the Canadian bridge was stalled, DIBC made about $60 million US in revenue from tolls.

The Detroit bridge company also lobbied to build a new six-lane bridge, and was permitted to do that in 2017. Then, last year, the land deal for that $1-billion US project was rejected by the city of Detroit.

Nathan Denette/Canadian Press
Nathan Denette/Canadian Press

Time for a detour?

Chandra says there is no need for Canada to use the bridge for so much cargo traffic.

"A lot of the goods … are passing through Ontario just because of the province's dependence and gravitational pull." He says Canada should rethink how cargo is shipped into the country.

LISTEN | How did we become so dependent on a single bridge?:

Cargo could be moved from New York through Quebec, he says, or from Asia through British Columbia, a province that only handles about seven per cent of Canada's cargo truck traffic.

For Chandra, the blockades at the Ambassador are a wake-up call, to consider other options.

"There are other bridges in the area, but they don't have the capacity that the Ambassador does. So that's a problem. It's aging and there could be infrastructure problems. There could be a natural calamity, an earthquake and you know, 20 years ago, we worried about terrorist attacks," said Chandra.

"A border closure because of a bridge collapse or earthquake would be unimaginable," he said.

Jacob Barker/CBC
Jacob Barker/CBC

A new chapter for the Ambassador

Two years ago, the Moroun family patriarch, Manuel, died a billionaire at 93. He handed the reins of his trucking and real-estate empire to his son. Matthew Moroun, whose net worth is now close to a billion, is chair of DIBC, the private company that operates the bridge. It is currently owned by a Michigan-based holding company called CenTra Inc, which also encompasses Central Transport, Universal Truckload, PAM and other transport companies. Moroun is also chair of Universal Logistics Holdings Inc., which is traded on Nasdaq.

CBC requested an interview with him, but he declined.

Cuderman has spent 20 years battling bridge traffic in her community and says in all that time, Manuel (Matty) Moroun rarely spoke to the media.

But the patriarch did show up at her bakery once.

"He didn't buy a darn thing," she said, recalling that days later, a realtor called, offering her any price she named for her property. She believes he represented Moroun.

She declined the offer and is still baking gingersnaps in the heritage building, which is older than the Ambassador itself.

"I told him I will be here until the day I die," she said with a laugh.

"Even after that, I might come back."

Written by Yvette Brend, produced by Anis Robert Heydari

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