We all know what the sinking value of the Canadian loonie relative to the US dollar has done to equipment costs. Carriers looking to buy new trucks have been in for some sticker shock, as David Zavitz, sr. v.p. of sales and marketing with Canada Cartage aptly explained at our Surface Transportation Summit in October.
He pointed out a $100,000 truck purchased in 2010 costs 38% more today due to the freefalling value of the Canadian dollar. That’s a $38,000 cost increase to absorb.
Now, imagine you’re talking about a $4.8-billion bridge and not a $100,000 tractor. Well, thanks to an Access to Information request filed by the Canadian Press, this is exactly the situation our federal government is looking at regarding the badly needed Gordie Howe Bridge, which will link Detroit and Windsor. This second crossing is so urgently needed, the Canadian government agreed to pay the entire tab to get it built, in hopes of recovering its investment through tolls over the life of the bridge.
But documents obtained by the Canadian Press reveal P.M. Justin Trudeau has been warned the cost will likely increase $2 billion due to the weak loonie. And he’s being urged to plan to shell out another $1.5 billion if the loonie falls further or interest rates increase.
That’s gotta hurt worse than a Gordie Howe elbow to the head. But let’s hope the government stays the course and gets the bridge built. Our economy and our industry need it.