Canadian Prime Minister Mark Carney defended his decision to give the United States a share of the profit from a new bridge between Ontario and Michigan, saying there will be little to no proceeds to split at first and arguing the project will help the economy in both countries.
The prime minister , speaking at a news conference in southwestern Ontario, was asked about a Bloomberg News report that the U.S.’s share of toll profits from the Gordie Howe International Bridge will be calculated before interest is paid on the debt Canada incurred to build it.
Carney had suggested in a TV interview last weekend the U.S. portion of the proceeds would kick in only after payments on that debt. But he revised his position on Thursday, stating: “Those net revenues are after operational costs — so it’s manning the toll booths, it’s maintenance, it’s snow removal, a series of other operational costs.”
The prime minister’s side deal with the Trump administration on the bridge has been a source of controversy in Canada because the country’s taxpayers paid the entire $6.4 billion construction cost.
The original agreement allowed Canada to collect all the operating profit from the bridge until its costs were repaid. Now that will be split for the first 15 years after U.S. Commerce Secretary Howard Lutnick intervened to stop the bridge from opening in June.
Carney said Thursday the bridge’s profits will be small for a while. “In fact, we expect them to be negative as traffic ramps up. So negative to modest in the first few years,” he said.
“All of the portions that go to the U.S. government will be reinvested in economic development, regional economic development in the area — the US side of the area, obviously — which is pro-cyclical. It reinforces more traffic, more traffic, higher revenues, more investment.”
The new deal will direct 50 per cent of the operating profit to a U.S.-run regional development fund for 15 years. After that, Carney said Canada will again receive the profits until the bridge is paid off. Once that happens, the cash will be split with the state of Michigan.
“The underlying agreement that we have with Michigan remains the same. And so no sharing of tolls until all the debt is repaid,” he said.
The text of the pact between Canada and the Trump administration on the bridge has not been made public.
—With assistance from Josh Wingrove.