The Cost of Doing Nothing

Detroit and Windsor’s integrated economies have grown and prospered. The Ambassador Bridge alone carries approximately 25% of the value of the merchandise trade between Canada and the United States. These border crossings are not only economically important, they’re also significant in our nation’s post 911 security. Travel time at the border has significantly changed due to the new security issues and with our crossings nearing capacity, this time will only increase significantly.

The growth and prosperity in the Detroit and Windsor corridor is linked by the automotive industry. The bilateral trade has grown faster than the GDP. However, with all this growth, the infrastructure has not grown to accommodate.

Delay costs will lead to higher production costs. Border delays will affect inventory cost. Over the next twenty years all these additional costs will preclude the area’s competitive advantage. The automotive industry is crucial to the economic growth for this area however these added costs will put these jobs (48,900 in Windsor alone) and the local economy (30.8% labor base in Windsor) in jeopardy.

Without the Jobs Tunnel and/or the Gateway Project, Detroit-based automotive production will be less competitive. The cost of automobile components will increase. The additional cost of each new vehicle will be US$200 by 2010. These negative effects added together will be overwhelming.

With the Jobs Tunnel, the region will dramatically increase the ability to retain as many as 9,000 – 12,000 jobs. The economic activity created by this investment is significant.
Research shows that the future economic costs in building this tunnel can be offset or even reversed. The Jobs Tunnel is a unique public-private partnership. It will bring US$419 million in new – and largely private – capital to improve the area’s border system capacity. The 5 year construction plan will positively affect both sides of the border. On the US side, a peak of 547 jobs will pump moneys into the metro Detroit area while on the Canadian side a peak of 893 jobs will improve the Windsor economy.

The benefits of building the Jobs Tunnel are substantial and striking. The operation of the Jobs Tunnel will add US$10.14 million annually (CN$14.15 million), including labor and goods and services purchased and it will require 190 full-time positions for tunnel operations and Canadian Customs.

Perhaps most critical to those who live and work in the southeast Michigan and southwest
Ontario, the Jobs Tunnel will help this region retain automotive manufacturing jobs. The capacity provided by the Jobs Tunnel could prevent the additional loss of nearly US$30 billion in transportation equipment industry output. This could save the region between 9,000 and 12,000 good jobs.

The Detroit River Tunnel Partnership is a partnership between two major private enterprises, Canadian Pacific Railway (CPR) and Borealis Transportation Infrastructure Trust (BTIT). The Detroit River Tunnel Partnership is committed to the design, financing construction, operation and maintenance of modern, safe and efficient rail tunnels that improve North American trade flows through the Windsor-Detroit corridor.

CPR is North America’s first transcontinental railway, and is the only transcontinental carrier with direct service to the U.S. Eastern Seaboard. BTIT is owned by the Ontario Municipal Employees Retirement System (OMERS), one of Canada’s largest pension funds serving more than 300,000 active and retired local government employees, and a leading Canadian investor in infrastructure projects.

This report was based on work done by Michael H. Belzer, Ph.D., President,
Sound Science, Inc., Ann Arbor, MI. Find more information and resources regarding the The Jobs Tunnel at thejobstunnel.com.