ONTARIO BORDER CROSSING UPDATE - WINDSOR CITY

C O N F I D E N T I A L SECTION 01 OF 02 TORONTO 000011

SIPDIS

NOFORN

SIPDIS

E.O. 12958: DECL: 01/10/2018
TAGS: ETRD PBTS PREL CA
SUBJECT: ONTARIO BORDER CROSSING UPDATE - WINDSOR CITY
OFFICIALS SLOW PROGRESS

REF: A. 07 TORONTO 424

B. 07 TORONTO 256

Classified By: Classified by Political Economic Consul Sherri Holliday-
Sklar for reasons 1.4 (b),(d),and (g).


1. (C/NF) Summary: Ontario provincial officials have decided
on the design for the Windsor access road linking the end of
provincial highway 401 with the customs plaza for the new
international bridge under consideration by the Detroit River
International Crossing (DRIC) project. The final provincial
decision, which has not yet been made public, was made
without discussion with Windsor city officials. Transport
Canada has agreed to pay for half of the access road (C$800
million),a significant increase over their initial
allocation of C$400 million. But a proposed C$35 million
plaza expansion project at the Windsor end of the
Detroit-Canada Tunnel is currently being held up by the
insistence of federal officials on increased funding from the
City of Windsor. The city, which has reportedly been
spending its tunnel revenue without setting aside funding for
future capital needs, says it does not have the money the
federal government is asking for. Windsor has alienated the
provincial and federal transportation officials who are
planning and will be constructing major border infrastructure
projects within the city limits. We do not expect Windsor to
adopt more accommodating tactics, leaving city officials as a
factor to be ignored or overcome as federal and provincial
officials work to improve U.S.-Canada border infrastructure
in southwestern Ontario. End Summary.

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Windsor Access Road
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2. (C/NF) Ontario provincial officials have decided on the
design for the Windsor access road linking the end of
provincial highway 401 with the customs plaza for the new
international bridge under consideration by the Detroit River
International Crossing (DRIC) project. On January 10 Fausto
Natarelli, Director of the Windsor Border Initiative
Implementation Group for the Ontario MoT, told Pol/Econ Chief
the final decision to build the C$1.6 billion highway was
made with input from key provincial Cabinet officials,
including Windsor-area MPPs Duncan (Finance Minister) and
Pupatello (Economic Development and Trade),but without the
direct concurrence of Windsor municipal officials, who had
proposed construction of an alternative "Green Link" (ref
(A)). Windsor city officials are publicly clamoring for
information on the proposed access road, but Natarelli said
provincial officials will not directly engage Mayor Eddie
Francis or other city officials, who have a track record of
not respecting confidential information and using the local
press to try to ramp up the pressure on provincial
politicians.


3. (C/NF) Natarelli said the province is on track to produce
the detailed engineering documents for the access road that
will be needed for the planned April 2008 binational
announcement of the preferred DRIC alternative. Ontario has
begun acquiring some of the 600 or so properties it will need
to construct the access road. MoT officials are currently
negotiating to buy 170 properties, which they hope to acquire
by the end of 2008. Natarelli said the province will issue
expropriation notices to other affected property owners who
have not come forward by the time the Environment Ministry
approves the Environmental Assessment (EA) for the access
road project in the summer of 2009. In a separate January 9
meeting, Environment Minister John Gerretsen affirmed to the
Consul General that the DRIC project is a high priority for
his ministry and that Environment officials are prepared to
expeditiously advance the provincial EA when they receive the
formal application from MoT next fall.


4. (C/NF) Natarelli said Transport Canada (TC) has agreed to
pay for half of the access road (C$800 million),a
significant increase over their initial allocation of C$400
million. TC officials have clearly said they will not pay
"a loonie more," however, and will re-evaluate their
financial commitment if the current road outline is
significantly altered to include more of the aesthetic
"Windsor beautification" features sought by city officials,
whose "Green Link" proposal called for tunneling 3.8 km of
the road.

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The Detroit-Canada Tunnel

TORONTO 00000011 002 OF 002


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5. (C/NF) Natarelli said Transport Canada separately is
currently holding up a C$35 million plaza expansion project
at the Windsor end of the Detroit-Canada Tunnel. Under the
2003-04 plaza expansion agreement, MoT and TC agreed to spend
up to C$10 million each for plaza construction while the city
agreed to acquire the needed additional property and kick in
some additional funding. Natarelli said that TC officials,
frustrated by the political grandstanding and spending
choices (such as the C$500,000 to C$1.5 million spent
retaining the services of New York-based traffic expert Sam
Schwartz, ref (B)),are insisting the city kick in more
funding for the project. Provincial officials are arguing to
their TC counterparts that a single year delay in the project
will increase project costs by more than the amount of money
TC is demanding Windsor kick in. And right now Windsor
claims it doesn,t have the money, Natarelli said.


6. (C/NF) During a December meeting, Natarelli told Pol/Econ
Chief that the City of Windsor has established a Municipal
Corporation to "manage" the tunnel. The city then
"sold" its management interest in the tunnel to the
Municipal Corporation, which has subsequently applied for a
loan against future tunnel revenues from the provincial
agency -- Infrastructure Ontario. Natarelli explained that
this shell game enabled the city to obtain the funds it
needed to pay its share of the cost of renovating the tunnel
ventilation system. The city meanwhile has reportedly been
spending its tunnel toll revenue without setting aside
funding for future capital needs.


7. (C/NF) Comment: Ontario is committed to advancing
construction of the Windsor access road linking the end of
highway 401 with a new publicly-overseen international bridge
between Detroit and Windsor. The tactics of the Windsor
municipal government headed by Mayor Francis has alienated
the provincial and federal transportation officials who are
planning and will be constructing major border infrastructure
projects within the city limits. Because of its linkage to
the binational bridge, the access road project will not be
derailed. But the sorely-needed plaza expansion project in
downtown Windsor, is taking a hit, to the detriment of
Windsor residents, many of whom commute through the tunnel.
Despite the obvious lesson for city officials, we do not
expect Windsor to adopt more accommodating tactics, leaving
city officials as a factor to be ignored or overcome as
federal and provincial officials work to improve border
crossings in southwestern Ontario. End Comment.

NAY