This week, U.S. President Donald Trump made headlines when he threatened to block the opening of the Gordie Howe Bridge over the Detroit River. The new bridge connects Windsor Ontario with Detroit Michigan. It was funded entirely by Canada, being built entirely with U.S. steel. Fifty percent of the bridge is owned by Canada and the other 50% by the State of Michigan. Despite the bridge being jointly owned by Canada and Michigan, the former party nevertheless paid for 100% of the construction, hoping to be compensated by exclusive access to tolls in the early years of the project. Once Canada is fully compensated for construction, fees will begin being split by Canada and Michigan 50/50.
Despite the sweet deal that the Detroit River bridge offers Michigan (no upfront costs!), Donald Trump isn’t happy with it. He thinks that the U.S. is being shafted and that the project should not proceed unless his country is compensated. Given that Michigan already owns 50% of the project, it’s not clear what he means by “compensation.” It could be that, because the State is run by democrats, Trump does not see it as part of what he considers “real America” (i.e., Republican-governed America). If so, he probably wants some kind of Federal government stake in the project, which neither Canada nor Michigan is likely to agree to.
Source: Getty Images
Federal government compensation unlikely
Donald Trump’s opposition has been cause for concern in both Canada and Michigan. Canada has paid dearly for the project, whose cost has been estimated at $6.4 billion. Although Michigan has kicked in the funds for a few phases, over 90% has been paid by Canada. If Trump really thinks that the U.S. Federal Government needs a stake in this project and plans on blocking it until he acquires such a stake, the project will be delayed for some time. That’s certainly a downer for Canadians and Michiganders. However, the project probably won’t be shut down completely, and a delay isn’t a major problem for 90% of Canadians, as I will show momentarily.
Not a major cost to most Canadians
One reason I’m not worried about Trump’s delay of the Gordie Howe bridge opening is that the cost of the project isn’t immense. Although the price tag has been estimated at $6.4 billion, and all of that has been paid by the Federal government (i.e., taxpayers), the actual spending per Canadian has been minimal.
Canada’s budget for 2025 was roughly $487 billion. The Detroit River bridge cost only 1.3% of the 2025 budget, and the cost was booked over several years. Even if all the expenses were booked in 2025, the cost to a taxpayer with a $25,000 tax bill would have only been $325. That’s certainly not nothing, but it’s not a crippling expense either.
Cost to investors
One group of Canadians that could be harmed by the Geordie Howe International Bridge opening delay is investors. Several companies have made large investments in the bridge. Unlike the Federal government, these entities are expecting returns on their investment.
Take Aecon Group (TSX:ARE) for example. This is a company that’s been involved in the construction of the Geordie Howe International Bridge. Most of the construction work on the bridge is complete. However, Aecon was partially compensated for its role with an equity stake in the project. So, as long as the bridge isn’t open, ARE is not earning revenues/profits that it believed it was entitled to. Its shareholders may see their stock perform less well than they’d hoped. That is a downer for Aecon’s owners, but again, not a major disaster for most Canadians.
Foolish bottom line
Taking all of the above into account, I am not terribly worried about the delayed opening of the Gordie Howe International Bridge. Donald Trump can certainly make a lot of noise, but he can’t keep the project shut down forever. Sooner or later, the bridge will open. Until that time comes, it’s best to just sit back and wait.
