NEWS
07/27/2015 13:36 EDT | Updated 07/27/2016 01:12 EDT

Cross-border trucking more costly after 9/11, report says

A more costly environment for bringing goods across the border by truck has emerged over the past decade or so, and that may be hurting the competitiveness of Canadian goods, according to one border expert.

Statistics Canada released a report this month which examined the cost of bringing goods across the border before and after the attacks of Sept. 11, 2001.

New security regulations were brought in following those attacks, which many thought would raise the price of moving goods from the U.S. into Canada and vice-versa.

The Statistics Canada report found that from 2004 to 2009, it cost 25 per cent more to move goods across the border, as compared to taking those goods the same distance domestically. That was well above the 16 per cent premium that was paid from 1994 to 2000.

"This study is not so much saying what's happened recently in the last few years, but basically asking a question: Does this new security that we've been now living with for over than a decade, does it increase the transportation costs and the results are that it does," Bill Anderson, the director of the University of Windsor's Cross-Border Institute told CBC Radio's Windsor Morning on Monday.

Anderson said this apparent jump in costs has implications for everyone.

"There's two reasons we should worry about this," Anderson said.  "One is that whenever you are building those extra costs into the supply chains, they get passed on to the company that's the shipper, but eventually that gets passed on to the consumer."

But Anderson said a broader concern is about what this does to our competitiveness.

"I think more to the point, we should worry about this, especially in southwestern Ontario, because it means whenever we're doing business across the border and we are all the time, because most of our market is across the border, we're at a competitive disadvantage because it costs that little bit more for us to get our goods to the ultimate consumer," he said.

"And so, that's not good for our economy here."

Asked what can be done to limit this potential impediment to trade, Anderson pointed to the federal government's plan to build a new bridge between Michigan and Ontario.

"There's a reason that the Canadian government is willing to put such a huge investment into the Gordie Howe International Bridge and that's because they realize that this is going to reduce that premium costs that Canadian firms have to pay when they ship things into the United States," said Anderson.

"Having this highway to highway connection, which we'll have with the new crossing, will make it cheaper and faster for the carriers and they'll be able to pass those savings on to the shippers."

Anderson said he expects to see technological improvements at the border that will drive down costs.