Travels in Canada – Part One: A Political Bridge Too Far?

Dateline: Windsor, ON/Detroit, MI, February 26-28, 2015

Indeed, the assembly of a finished vehicle can involve as many as seven trips across the border. Each trip is a separate transaction, and each transaction a separate set of inspection fees and import compliance rules. For each vehicle, thousands of component parts must cross the border each and every day. It is a 24/7 operation and the stakes are huge. Last week, I had the opportunity to attend an event organized by the Automotive Parts Manufacturers Association (APMA) in Windsor, Ontario and, later that day, a dinner hosted by the Original Equipment Suppliers Association (OESA) in Detroit, Michigan. Combined, their members’ companies provide thousands of jobs in both communities — jobs that depend on a seamless cross-border production line.

Attendees spoke of global competitiveness and the need for plant efficiencies. They know that time is money. They also know that the success of their industry requires political support and public partnership. For years, Ottawa and Washington claimed they understand, that they “get it.” So what’s the problem? Too often, political pledges rarely match the reality on the ground and this region is a case in point.

First, the existing border infrastructure over the Detroit River. Announced back in 2004 and after many legal and political hurdles, a new bridge is now finally slated for final construction in 2020. The last barrier (let us hope) was cleared when Canada agreed to offset the cost of the entire span, including the purchase of the land for the US Customs plaza. Almost everyone welcomes the news that construction is soon to begin. Unfortunately, it will be another five years of ubiquitous orange traffic cones, but we may be seeing the light at the end of the proverbial tunnel.

Second, keeping the border “open.” The Detroit and Windsor media last week did an admirable job of trying to keep abreast of what was happening in Washington and the issue of whether US lawmakers would keep funding for US Customs inspectors available into FY 2015. For reasons having little to do with US Customs (but had everything to do with the presidential elections in 2016), Congress argued, threatened, debated, and then threatened some more. Finally, the 535 members of Congress found a way forward — not for the entire year ahead, but for just one week! This is modern day Washington and it’s messy. But Congressional members are expected to find a partisan path forward and pass a full-year Department of Homeland Security appropriation bill.

A vital cross-border bridge 16 years in the making. Customs inspectors unsure of their next paycheck. This climate of political uncertainty is needlessly keeping plant managers from Essex to Lansing awake at night. The members of APMA and the OESA deserve better — as does the entire region.

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This alert is the first installment from Birgit Matthiesen for a planned series of cross-border trade updates. These short briefs are designed to share with our readers across Canada what she is hearing “on the ground” while traveling in Canada. For our clients, the US marketplace remains an important destination — some industry sectors have particular challenges while some regions in Canada have differing border infrastructure needs. Following each trip, Birgit hopes to report on the regional issues of the day and how the US Administration and the new Congress might address those needs and challenges. We hope these alerts, therefore, are of interest to clients across Canada and across industry sectors. Please send us any comments you might have.