Border delays cost Ontario $5.25 billion: OCC

TORONTO, (June 8, 2004) — Congested border crossings due to truck traffic and Customs clearance delays suck over $5 billion a year out of the economy, according to a study released yesterday by the Ontario Chamber of Commerce.

The study — conducted by the OCC and the Borders Task Force — found that with current unprecedented levels of trade between Canada and the U.S., even a slight delay at the border
produces a ripple effect of economic loss throughout the Ontario. Delays, states the report, essentially act as a tariff-like barrier to both exports and imports, raising costs throughout the entire supply chain and eventually make goods more expensive at the retail level.

However, unlike tariffs, border delays and uncertainties do not produce revenue for the government, the report states. “Both the federal and provincial governments have made small gestures towards fixing our ailing border crossings,” said Len Crispino, President and CEO of the OCC. “But, frankly, the gestures we have seen are not nearly sufficient for the size and scope of the problem … The OCC knows, and this study shows, that our border crossings must become a real issue for government.”

Approximately 90 per cent of all consumer products and foodstuffs used and consumed in Ontario are shipped by truck at some point in the distribution chain, the study states. Border delays at some of Ontario’s border crossings are upwards of four hours — which at the Ambassador Bridge crossing in Windsor, Ont., costs the Ontario economy approximately $7 million alone in lost production.

The study says that by the year 2030, delays in the Detroit-Windsor corridor alone will result in direct costs to Canada and the U.S. of more than $17.8 billion a year and will result in over 70,000 jobs lost in Canada, states the study. Currently, both the Canadian and American economies are losing a staggering $13.6 billion annually from their economies due to delays at the border — with Ontario absorbing approximately 38 per cent of that cost.

Canada Customs says delays average as low as half an hour per shipment. But the OCC says that the numbers are higher — beginning at about an hour, and rising to about four hours, depending on the time of day or level of inspection at each border crossing. In a recent survey of its members, the OCC says it found that most respondents experience an average length of delay of one to two hours almost everyday, with Fridays between 3:00pm to 6:00pm being the most congested.

“It is difficult to determine the scale of economic impact of border delays, due to the fact that shipment of goods across the border affects almost every industry at some point in their business process,” the study explains. “But the overall trend is quite clear. From the additional cost of diesel and labour for trucks, to the loss of investment dollars from companies choosing to operate domestically, an hour delay at the border can cause major economic repercussions.”

Check out the OCC’s website to read the full report.