A Monopolist’s Bridge

(Photo: netjackal)

More than 25 per cent of trade between the U.S. and Canada goes over the Ambassador Bridge between Detroit and Windsor, Ontario. The bridge, built in 1929, has since 1979 been owned by one individual — Matty Moroun. He also owns duty-free stores and sells gasoline that escapes taxes. The Bridge isn’t quite a monopoly—there is also a tunnel; but the Bridge is more convenient for a lot of traffic.

Michigan has a constitutional amendment on the ballot requiring that any new bridge be approved by voters before state money is spent on it. Perhaps unsurprisingly, the Bridge owner is funding a large advertising campaign supporting the amendment. No monopolist likes to have the stream of monopoly profits diminished, which a new bridge would surely do. His political advertising is a smart move for him—a good way to ensure a continuing flow of profits.  Whether it’s good for Michigan, for U.S.-Canada trade and the well-being of the average North American consumer is questionable.  (HT to DJH)

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  1. Lewis says:

    Surprised to see the idea of a real life “monopoly” be held up here. There are 6 crossings to Canada, 2 bridges, 3 tunnels, and a ferry. The Detroit Windsor Tunnel and Ambassador Bridge split passenger traffic 45/55 currently and charge the same toll rate. Commercial trucks can use the Ambassador Bridge or the Blue Water Bridge, as most freight is headed towards to Toronto, and the distance is roughly the same using either bridge. The Blue Water charges $3.25/axel for commercial, the same as “Class A” trucks on the Ambassador. The AB varies its weight, as the heavier the truck, the more wear on the roadway. Class B is $3.75. Class A and B account for a majority of traffic on the bridge. There are also two privately owned rail tunnels, and a lot of raw goods are transported this way. Far from a monopoly. The word monopoly has been promoted by local politicians promoting their agenda.

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  2. Lewis says:

    Also worth pointing out, a new bridge will draw traffic away from the Blue Water Bridge (government owned) and the Detroit Windsor Tunnel (government owned). Traffic is down 40% when compared to 2000 levels. So all the traffic (and tolls) for the new bridge would be drawn from these crossings. Michigan currently gets a cut of this toll revenue. Under the proposed agreement, Michigan gets $0. Michigan also gets a lot of tax revenue from the Ambassador Bridge.

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  3. JH says:

    There is currently no LEGALLY BINDING agreement to make Canada pay for the bridge. It’s more of a “gentleman’s agreement” right now. And $2 BILLION for a bridge is a little ridiculous to me.

    http://www.crainsdetroit.com/article/20121023/FREE/121029980/snyder-stumps-against-proposal-6-confirms-canada-on-hook-for-bridge-cost-overruns#

    I see this as a government Monopoly more than anything. Why would any private investor want to build a competing bridge knowing they could just get crowded out by the state and Canadian governments?

    That said, I’m actually voting NO on the proposal. The Constitution is to protect citizen’s rights, not codify legislative policy matters.

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