(The following article by Bernard Simon was posted on the Financial Times website on August 9.)
TORONTO — Burgeoning trade between the U.S. and Canada is turning out to be a mixed blessing for businesses that ship goods across the 4,000-mile-long border that separates the world’s biggest trading partners.
Concern is growing, especially in Canada, over the traffic congestion that clogs several of the 22 main border crossing points for long stretches of the day.
John Carroll, senior vice president of the Detroit Regional Chamber, said Canadians “should be worried that they’re losing imports … as well as visitors.” Carroll said border delays had discouraged many residents from driving across the Detroit River for dinner in Windsor in Ontario.
Canadians are even more concerned about the threat to investment on their side of the border, particularly in auto plants, which form part of an integrated North American industry and depend on reliable, just-in-time deliveries of parts and vehicles. A component can cross the border several times during assembly.
“All of a sudden, you’re looking at a reason to limit investment in Ontario,” said Harold Heffernan, general manager of Celadon Canada, a trucking company. Heffernan said his trucks were held up at border crossings between Ontario and Michigan for up to five hours on several days recently.
Dalton McGuinty, Ontario’s premier, told a business group in Washington in June that he was determined to press the issue.
“Border delays are making Ontario industry increasingly uncompetitive, threatening our vital auto connection with Michigan and cutting sharply into tourism,” McGuinty said. “Ironically, in this age of free trade, border delays now function as a quasi-tariff on Ontario goods and services heading south.”
The crux of the problem is that infrastructure and staffing at the busiest crossings have not kept pace with ballooning trade volumes and the extra security measures imposed by U.S. authorities since the September 2001 terrorist attacks. Canada also put new entry requirements in place this year for permanent residents who do not hold Canadian citizenship.
In the 15 years since the U.S. and Canada signed a free-trade agreement, the value of trade has almost tripled. Len Crispino, president of the Ontario Chamber of Commerce, said the problem has been exacerbated by a move toward road transport, which now accounts for 70% of shipments.
The busiest crossing, the Ambassador Bridge linking Windsor and Detroit, carried an average of 8,800 trucks and 17,000 cars each day last year.
In a recent study on the costs of border congestion, the Ontario Chamber of Commerce urged the federal and Ontario governments to step up financial support for the expansion of infrastructure, improved customs and immigration technology, and education of truck drivers on border procedures.
Both Canada and the U.S. have introduced measures to ease the congestion. One of the highest priorities has been to streamline the clearance of drivers and goods considered a low security risk. Traffic flow at the busiest crossing points is being improved by widening approach roads, expanding customs plazas, eliminating traffic lights and installing electronic information boards.
More-ambitious projects are in the pipeline. Canadian Pacific Railway Ltd. and the Ontario Municipal Employees Retirement System have proposed converting a twin-lane rail tunnel under the Detroit River to a road route and boring a new, larger tunnel to accommodate double-stacked container trains.
A private-sector group plans to build a suspension bridge south of the Ambassador Bridge. Separately, the owners of the Ambassador Bridge have recommended adding a second span. Farther east, a public agency that operates the Peace Bridge between Buffalo, N.Y., and Fort Erie in Ontario is considering expansion options, including reviving earlier plans for a second bridge.
The combined cost of these projects is about $2 billion, making it unlikely that all will be built in the foreseeable future.
For shippers and travelers, the concern is less about which bridge or tunnel goes ahead than how long the regulatory approvals and construction will take. The addition of a second span to the bridge linking the petrochemicals center of Sarnia in Ontario and Port Huron, Mich., took a decade from conception to its completion in 1997.