By Beth Gorham

WASHINGTON (CP) – The U.S. government is ditching plans to ease congestion at border crossings by moving American Customs operations to the Canadian side.

The first pre-clearance site for travellers would have been set up at the Peace Bridge linking New York and Ontario. But Homeland Security Secretary Michael Chertoff nixed it Wednesday. Canada’s Public Safety Minister Stockwell Day said he’s still hoping Chertoff will reconsider.

“Pre-clearance offers great potential,” Day said in a telephone interview from Ottawa.

“It certainly would have been desirable. Traffic flow would have been expedited.”

The plan would have included moving Canadian operations to the U.S. side as well.

Homeland’s decision was quickly condemned by Democratic legislator Louise Slaughter and a major cross-border business group.

“This is a significant step in the wrong direction,” said Scotty Greenwood, executive director of the Canadian-American Business Council.

“I hope both governments can successfully resolve their differences on pre-clearance in the interests of the entire North American economy.”

The Peace Bridge between Buffalo, N.Y., and Fort Erie, Ont., is the second busiest vehicle crossing and third when it comes to trade.

Slaughter, a prominent critic of U.S. plans to require passports at land crossings whose district includes Buffalo, said she’d talk to the White House about getting the decision reversed.

It was made after two years of high-level discussions between the two countries.

“The Canadian government has time and again offered to compromise on the remaining issues,” said Slaughter.

“This project is critical to the economic future of Buffalo and to the health of U.S.-Canada commerce.”

The announcement is another example, said Slaughter, of a “deeply flawed approach to the northern border.”

“Smart border policies have time and again been replaced with policies that thicken the border.”

Congestion has been a serious problem at the Peace Bridge crossing since the mid-1990s and got worse after the terrorist attacks on Sept. 11, 2001.

Canada and the United States agreed in December 2004 to develop a plan for pre-clearance at the bridge involving the relocation of American border operations to Canadian soil.

Russ Knocke, chief spokesman for the Homeland Security Department, said the major sticking point was Canada’s legal problem with having U.S. authorities take fingerprints of people who approach the border but decide not to cross.

“That restricts us from assessing potential high-risk travellers,” said Knocke.

“These were the type of (investigative) tools we were unwilling to surrender.”

Day said Chertoff told him in December the issue was going to be a problem for his side.

Canadian law doesn’t permit fingerprinting unless someone volunteers or has been charged with a crime.

But suspicious people could still be questioned, said Day.

It’s puzzling, said Greenwood, that the two countries have had a successful air clearance program at major airports for years but can’t conclude this deal, where the stakes for the economy are so much higher.

The United States now plans to modernize its operations on the Buffalo side, said Knocke.

Canada is also looking at changes, said Day.