Prime Minister Mark Carney welcomed the upcoming opening of the Gordie Howe International Bridge, describing it as beneficial for both Canada and the United States. Addressing the bridge's revenue-sharing agreement, Carney clarified that the deal does not involve splitting toll collections. Instead, Canada and the U.S. will share net revenues under a 15-year agreement, with any toll revenue sharing beginning only after all outstanding bridge debt has been fully repaid. His remarks aimed to clarify the financial structure of the landmark cross-border infrastructure project and its long-term economic benefits for both countries.
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NewsTranscript
00:00It's not splitting the tolls of the bridge.
00:03It is an agreement for 15 years to split net revenues.
00:09Splitting of tolls, any sharing of the toll revenue won't happen until all of the debt, all of the debt
00:16is repaid.
00:18Prime Minister, we're looking for more information on the deal to open the Gordie Howe Bridge.
00:22Canada spent $6.4 billion to build it.
00:26Is the Canadian debt repayment on the bridge included as expenses before profits are split with the U.S.?
00:33Well, let me say, first of all, that we're very pleased that the prospect of the bridge reopening later this
00:40month or opening later this month.
00:43This is good for Canada, good for the United States, both in the short term and the long term.
00:48What we have with the agreement with the U.S. is as follows.
00:53And let me start with what it is.
00:56It's not splitting the tolls of the bridge.
00:59It is an agreement for 15 years to split net revenues.
01:05Splitting of tolls, any sharing of the toll revenue won't happen until all of the debt, all of the debt
01:12is repaid.
01:14We will split net revenues over the course of the first 15 years.
01:18And those net revenues are after operational costs.
01:21So it's manning the toll boost, it's maintenance, it's snow removal, a series of other operational costs.
01:29We expect that after those costs, for the first few years, net revenues will be modest.
01:36In fact, we expect them to be negative, you know, as traffic ramps up.
01:41So negative to modest in the first few years.
01:43And what's been designed is an alignment of incentives so that when the splitting begins, all of the portions that
01:53go to the U.S. government will be reinvested in economic development, regional economic development in the area, the U
02:01.S. side of the area.
02:02Obviously, which is pro-cyclical, it reinforces, you know, more traffic, more traffic, higher revenues, more investment, and that's the
02:11way it moves forward.
02:13The underlying agreement that we have with Michigan remains the same.
02:20And so no sharing of tolls until all the debt is repaid.
02:26So it's a good deal for both sides.
02:28It gets things moving, and, you know, that's in the spirit of today's announcement, which is to get things moving.
02:35Are you able to provide more information about the deal?
02:38Some sources are, to us and to Bloomberg and Reuters, are saying it's a 50% split, I guess, once
02:43the sharing starts happening.
02:44And if this is a Canadian project, why did you have to start giving?
02:49Why did you decide to start giving some of the revenue away?
02:52The first thing is you quoted the overall amount of the capital investment of the project, around $6.5 billion.
03:00What we're talking about is very modest relative to the size of that.
03:04Okay, that's the first thing, just to give sense.
03:07The second is that, because I'm going to repeat myself, but I think it's an important point, that it's aligned,
03:14the incentives are aligned here,
03:15because the reinvestment in regional economic development on the Michigan side, mainly the Michigan side,
03:22that's obviously good for Michigan, but it's also good for Canada because it's going to reinforce the traffic.
03:27So we see the incentive alignment, it's a reasonable discussion, it's a good deal, good deal for Canada, good for
03:33the U.S.,
03:33and it's great for both countries to have this bridge open, and we're looking forward to being able to.
03:3750%?
03:39Next question.
03:43Mr. Prime Minister, Jerry DeJuan from CTV News, London.
03:47This region has among the highest unemployment levels of anywhere across the country.
03:52How are we looking to use this to address those concerns?
03:56Yeah, well, we're, and my caucus colleagues from the region are here, we are very focused on exactly this issue.
04:07Part of the answer is in today's announcement, it's providing not just the scale of the investment,
04:16but also the certainty of a partnership, so longer term certainty, which of course is going to help GDLS invest
04:24and build out,
04:26as well, and this is where some of the international travel that we've been doing, the international meetings we've had,
04:34of the deepening of our partnership with NATO, our agreement, for example, with Europe to be part of their defense
04:40procurement,
04:41government, the work we're doing with Gulf allies, this is where it starts to come together, because it reinforces the
04:48efforts of the company to,
04:51which has always been very successful in exports, about 80% of the production goes for export from here,
04:58but it's reinforcing that opportunity in this more dangerous world.
05:02So that's a component in the defense sector, the defense industrial sector.
05:07At the same time, we need to help build out the supply chain in this sector and other sectors.
05:15So, for example, Minister McGuinty, through Windsor, through here, has been meeting with, I'll give an example,
05:22this is one of many examples, but with tool and dye makers in the region who can be suppliers more
05:30broadly as our industrial strategy moves forward.
05:35Of course, as well, we are working hard to get the right deal for Canada with the United States.
05:42We know they've changed their approach, but we're still negotiating with them on getting the right deal for that.
05:48And more broad diversification through reinvestment, through, we have something called the Regional Tariff Response Fund,
05:55which is going directly back in here where we're recycling the revenues from the tariffs into the region.
06:02So it needs to be comprehensive.
06:05We're very seized with the scale of the challenge.
06:10Last point I would just make, if I would say there's a common thread to what we're doing, is we're
06:16focusing on what we can control.
06:19Not waiting for decisions out of Washington, but moving forward with Canadian solutions, solutions with other export partners
06:29that help create those longer-term, those good long-term jobs for the people of London and beyond.
06:35Most of the challenges in this region stem from challenges in manufacturing sectors specifically.
06:41Is there anything more broadly that you can do to help overall manufacturing issues?
06:45Yeah.
06:46So one of the things that we've been doing, and it's starting to come into place, is we have changed
06:53the tax structure for investment in plant equipment and manufacturing.
06:56In fact, not just plant equipment, but basically all aspects of manufacturing.
07:00So we have now, just passed through Parliament in recent months, the most attractive tax rate on new investment for
07:11manufacturing writ large.
07:14So that means plant equipment, it means R&D, it means your ICT, your information technology components that come around.
07:22All of that is available for a super deduction, which is what it's called.
07:27But when you wrap that all together, it puts us in a position where the tax rate on investment in
07:33Canada is less than half the G7 average and four percentage points below the United States.
07:41So it now becomes very attractive.
07:42So we've combined that with some of the other things we're doing and get the critical mass that way.
07:47Thank you, sir.
07:48Next question.
07:52Hi, Prime Minister.
07:53Jonathan Juhu from the London Free Press.
07:54I guess I just wanted to start by clarifying something.
07:57You mentioned 6,000 jobs for the next eight years across Canada for the investment that you guys are making
08:03in this project.
08:04I'm curious, are these additional new 6,000 jobs or, for example, are the employees hired by GDLs counted in
08:13that number?
08:13No, they're in that.
08:14But what we're getting is you get the certainty of those.
08:18You know, the folks here get the certainty.
08:20Now, that certainty, I mean, I speak under the control of those who are actually running the business.
08:28But I can tell you from my experience in business is that that certainty and the quality of the product
08:36and the relationships that we're building, Canada's building, the company has, but we're building internationally provides the platform for the
08:44export expansion.
08:45And that's where you start to see the certainty, and that's where you start to see the big increments.
08:48But the certainty cements those jobs.
08:50And then the nature of the supply chain, what they built out, gets that extra 10,000 across Canada.
08:59Okay.
08:59So in that case, is there a way to get sort of like a breakdown of what actually will be
09:03new jobs that are going to be generated?
09:05Because talking to many sectors, you're talking about the speed-off effect and the benefit that investment like this would
09:10have in other manufacturing companies and all of that.
09:12But talking to them, they're finding it hard to sort of like even get into the part of that supply
09:18chain.
09:19So it's not only like this investment expanding on its own right away, but I don't know if there are
09:24supports that they can get into it kind of thing.
09:26Yeah.
09:27Okay.
09:27So the core of your question is something – I thank you for the question because it gets to one
09:35of the key elements of a strategic partnership framework.
09:39Again, predictability, visibility of what the needs are going to be of the Canadian government, the Canadian Armed Forces, that
09:47can mean joint R&D.
09:48But also our ability through the Department of Industry, through the Department of National Defense, through our MPs and others
09:56to work with companies that will be part of that supply chain.
10:00I referenced one of the things that the Minister of National Defense has been doing, which Ministers of National Defense
10:07wouldn't have done in the past.
10:09But one of the things he's been doing is sitting down with companies, bringing together core companies that will be
10:20– either are likely to be strategic partners, so-called primes, with an emphasis on them being Canadian, obviously,
10:28and putting them in the room with potential suppliers that perhaps had supplied other aspects of manufacturing, could have been
10:39part of the broader auto industry manufacturing chain.
10:43And that's part of what we're doing.
10:44Now, these are businesses.
10:46They make their decisions accordingly.
10:49But providing that predictability, the scale of this is very large.
10:53What we have to do to protect Canadians, protect our allies, and then making those connections, all of that is
10:59part of that flywheel that we're creating.
11:03So predictability, more business, better understanding, and then building up.
11:08Next question, Posh and Kastien.
11:11Hi, Jessica Singer with CBC.
11:13Much of central Canada is dealing with wildfires and smoke pollution, as we feel very much here in London.
11:20This is just days after you announced plans for a new oil pipeline.
11:25What do you say to Canadians who believe these current climate conditions are a sign we should lean into our
11:30climate targets rather than drop some of them?
11:33Well, first off, I absolutely agree.
11:36And it's not – I'll use your phrase – leaning in.
11:40But the way I'm – we, the government, views, leaning in is actually putting the investment in the ground that's
11:45going to achieve those climate targets.
11:48We've relied too much on targets, laws that weren't driving the actual investment that's necessary to reduce emissions.
11:59So we've shifted our focus, shifted our focus to get that investment driven.
12:05Core to that is the electricity strategy, which we're currently consulting on, doubling the scale of our grid over the
12:13course of the next couple of decades.
12:14A grid that's almost 85 percent clean power.
12:17The intention is to maintain that, do that, and do that in a way.
12:21And everybody in this room would be living through the challenges in affordability in various ways.
12:28So we need to do it in a way that is also – preserves affordability for Canadians.
12:33We have amongst the lowest electricity costs in the world.
12:36We want to keep those.
12:38And so a climate strategy that looks to affordability in the short term and builds those emission reductions with major
12:46investments.
12:47And what you see is the investments or the major projects that we're helping to catalyze are low carbon.
12:54So that new oil pipeline, as a precondition, a precondition of that new oil pipeline is the Pathways Project, which
13:03removes – is the equivalent of removing 90 percent of the vehicles on Alberta roads.
13:08As another precondition is a 75 percent reduction in methane in Alberta.
13:13As another precondition is a carbon market that actually works, just isn't a carbon market in name.
13:19And I will underscore – and this is – if you want one illustration of the difference in our approach
13:25is that, theoretically, the carbon price is over $100 right now.
13:30But the carbon price in the actual markets has fell to about $20.
13:36So the effective – the gap between what was the objectives, what was said, what was legislated, and what was
13:43happening was enormous.
13:45And we're shifting the approach to make sure that there isn't a gap and the focus is in that investment.
13:52Last point, if I may.
13:53I'll hand back.
13:55It's – climate is a global issue.
13:59And that's why we have maintained our global climate finance.
14:03That's – that's a rarity in the G7.
14:06We're the only countries – I think we are the only country who's maintained our level of global climate finance
14:11because we need to, obviously, globally get emissions down outside of Canada.
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