Transport Committee on April 30th, 2018

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

Thank you, Madam Chair.

I want to talk about the Gordie Howe bridge . Are you at all worried about the financial viability of this bridge? Our understanding is that the three bidders vying to build the bridge have expressed their concerns to the government about the fiscal viability of the bridge. In turn, the government ordered an internal review of the bridge and its cost. So, are you at all concerned about the financial viability of the Gordie Howe bridge?

[Yazmine Laroche]

I'm going to be a little bit cautious in my answer, and I'll explain why. The Windsor-Detroit Bridge Authority is actually in the middle of a procurement process. We all want to make sure that this process is successful and that we're not in any way being seen to intervene in what is a very independent process.

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

Understood.

[Yazmine Laroche]

Please accept my comments in that light.

I am not worried. I think it has been a very diligent and robust process to date, supervised by a fairness monitor. I believe that the WDBA has worked very closely.... It was a two-step process. They went through an RFQ process first, out of which they selected three big consortia with vast experience among their members, and were in constant dialogue with them. My colleague will have more details. They had numerous commercially confidential discussions with them to help surface any challenges or issues that they might have as they were preparing their bids. As a result of that, I think that they were able to make some adjustments that responded to some of the issues that they raised. I'm crossing my fingers that we're going to have a successful announcement in the next short while.

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

Thank you.

It sounds like it's still on track for the selection of the proponent in June. Is it true that the government is going to guarantee the toll revenue for whomever operates the Gordie Howe bridge?

[Yazmine Laroche]

It's being done as a public-private partnership.

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

I understand.

[Yazmine Laroche]

The WDBA will select the successful bidder, who will then have the responsibility to design, build, operate, and maintain.

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

Who gets the toll revenues? It's the proponent who builds and operates the bridge, is it not?

[Yazmine Laroche]

The government will be receiving the toll revenues.

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

The government will be paying for this bridge out of the consolidated revenue fund, regardless of the stream of tolls that it collects off this bridge. Is that correct?

[Yazmine Laroche]

Yes.

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

Okay.

Has an analysis been done within the government about the financial implications of the Transport minister granting a permit for a second bridge last August?

[Yazmine Laroche]

The Gordie Howe bridge project has been planned for a number of years. All of the studies that were done, in terms of getting this bridge built, were predicated on there being two bridge crossings. There were some very serious concerns—

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

With respect, Madam, when the Gordie Howe bridge was originally proposed, there was one four-lane bridge crossing. The situation has changed. There is now a proposal for a new six-lane bridge. The original analysis could not have applied because the new bridge has 50% more capacity. My question is, quite simply, was there an analysis done by the government about the financial implications of giving Matty Moroun and his companies a permit to build the second six-lane bridge at the Windsor-Detroit bridge crossing?

[Yazmine Laroche]

We, at Infrastructure Canada, have not done that analysis, but we can follow up and see if Transport Canada has done so.

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

That would be helpful. Thank you.

The government, Minister Garneau in particular, has said that there's a need for two six-lane bridges across the St. Clair River. To me, this doesn't make any sense. We currently have one four-lane bridge crossing the St. Clair River. We also have a tunnel that empties out in downtown Detroit. So, we have two crossings for truck and car traffic, and we're going to go to a situation where we have two six-lane bridges, trebling the capacity of that border crossing, from four lanes over water to 12 lanes over water. What confounds me about that is we're not only trebling capacity, we are also doing it at a time when cross-border traffic has plummeted over the last decade. It has not just plummeted at Windsor-Detroit, it has dropped at Ontario-New York State, Ontario-Minnesota, and Ontario-Michigan border crossings. This bridge is supposed to be paid for by tolls over a 30-year period, possibly up to 99 years, although I fail to see how. I think we're reaching the outside...lifespan of that construction. I don't understand how this doesn't end up being borne by Canadian taxpayers. I just don't see how the financials for something like this work.

[Marc Fortin]

I think your question is around the traffic and the forecast in terms of revenue. There are two ways of looking at the Gordie Howe bridge file. We're looking at the volume of traffic, but we have to look through the lens of this being a very crucial trade corridor for Canada and the United States itself. You can look at a year or two back in terms of fluctuation of traffic, but what we've done since the beginning of that file is look at decades of traffic. If we look at four decades of traffic for that corridor, we're talking about an increase of 3% in terms of the traffic. Yes, there are fluctuations—when 9/11 happened, when the economic crisis of 2008–09 happened—but these are fluctuations taking place. If you look at the trend, we are looking at a 3% increase that took place.

You've got the cars, but you also have to look at 2.5 million trucks a year going through that corridor, so we think it's very important to look at that.

[The Chair, Liberal, Judy Sgro]

We'll go on to Mr. Badawey.

[Vance Badawey, Liberal, Niagara Centre, ON]

Thank you, Madam Chair, and I want to continue on the same theme Mr. Chong with respect to trade corridors. Currently we're, hopefully, close to an agreement with the United States with our NAFTA negotiations, and the expectation is that the deal will be a heck of a lot better than it was in the past, giving Canada a better position with respect to economy and therefore the need for more robust trade corridors.

Yes, we're looking at the new Gordie Howe bridge. We have the Peace Bridge at Buffalo, New York, which by the way, attached itself to new Continental 1 that makes its way down to Miami.

My question to you is this, and it was the same to Minister Sohi, the same theme I want to go on. It's with respect to integrating our infrastructure investments, the need for better communication when it comes to infrastructure that will support outcomes that attach to economy, attach to lifestyle, and attach to social and environmental issues. I'd like to hear some more comment on that, on how we can integrate our infrastructure investments when it comes to roads, water, with the binational Great Lakes St. Lawrence Seaway System, as well as air and railway.

[Yazmine Laroche]

I can't really opine on what will ultimately be a policy decision of the governments, but I can say that I think the Gordie Howe project is a really good example of how two levels of government, two different governments, come together to facilitate a project that is of such huge importance to us from a perspective of trade and economy and movement of goods and people. It's a great example. It took a really long time to make it happen. Is there an opportunity to do things better and to look at things differently? Probably, but I would say right now that the focus of our infrastructure programs is to deal with the huge infrastructure gap that has existed in our country for some time and to make sure that those investments are going to support those initiatives.

I will just turn to my colleague, Mr. Campbell, however, because there may be some opportunities through the new Canada Infrastructure Bank for looking at exactly some of the issues that you've raised around binational projects.

[Glenn Campbell, Assistant Deputy Minister, Investment, Partnerships and Innovation, Office of Infrastructure of Canada]

With respect to the Canada Infrastructure Bank, it's more than just about what the vehicle will do. It's really representing government's partnering with private sector players as well as planners in provinces and municipalities, which concurs with the longer funding framework that we're now providing various provinces and municipalities. They're now encouraged to think about what their priorities are for filling the infrastructure gap. Many of those correlate to ridership and flow of goods, be it rail, people, or air, as you've said, and they're looking at what their various assets are and the life cycle, with the prospect to add not just the Infrastructure Bank, but also other tools available. When they engage private sector discipline and investors, they are asking the tough questions of government about what the future is, where the flow is going to go, and where the best use is of marginal dollars.

It just so happens that on some big projects we know provinces and municipalities are already thinking about the Infrastructure Bank, but more than that, they're thinking about how better to increase longer-term planning to determine how to get goods east and west in Canada and also north and south.

[Vance Badawey, Liberal, Niagara Centre, ON]

In the report on page 17, it states with respect to changing global trade patterns and transportation needs that the current trade and transportation infrastructure is not sufficient to meet the needs of the future. A 2015 report by the International Transport Forum estimates that, by 2050, international freight volumes will quadruple, the north Pacific will overtake the north Atlantic as the world's most important trading route, and shifting trade patterns will increase average shipping distances by 12%. It goes on to talk about the congestion and bottlenecks.

What are some of the plans that you're identifying and therefore working on with other ministries, when it comes to transport, for example, or environment? What are some of the thoughts that you're giving to that to best prepare for that, over and above the construction of the Gordie Howe bridge?

[Yazmine Laroche]

I would start with the $2-billion trade and transportation corridors fund that Transport Canada is running. It just ran a very successful competitive process to identify exactly the kinds of projects that will solve the problems that were identified in the report. It received over 100 applicants. My understanding is, from my colleagues at Transport Canada, the submissions are in the process of being reviewed, so Transport Canada can start identifying the projects that will help achieve those outcomes.

[Vance Badawey, Liberal, Niagara Centre, ON]

With these investments being put in place, obviously, it will create a more efficient trade corridor system, both nationally and internationally. Do you find that foreign direct investment will be enhanced, because of these very investments?