Ontario’s bid for Amazon headquarters in GTA won’t contain billions in financial incentives

One of the world's most valuable companies is looking for a new place to set up shop. Amazon says it will invest 5 billion dollars for a site that could house up to 50,000 employees. Mike Drolet reports.

TORONTO – Setting up its second headquarters in the Greater Toronto Area would save Amazon $1.5 billion a year, the man heading up Ontario’s bid for the project said Wednesday, as the deadline loomed for cities in North America to make their pitch.

Ed Clark, a business adviser to Premier Kathleen Wynne, said the region offers highly trained talent at a savings when compared to most U.S. jurisdictions – a software programmer in Ontario costs 34 to 38 per cent less than in Boston or New York – and corporate taxes in the province are lower than south of the border.

“What is Ontario’s core advantage?” Clark said. “Great talent at a very competitive cost. That’s an edge the government is determined not only to maintain but to sharpen.”

Other reasons for the lower salaries include the employees’ access to social programs like universal health care, and a strong U.S. dollar compared to the loonie.

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READ MORE: Amazon Canada to hire additional 200 workers at Toronto office

Immigration is another key advantage, Clark said, adding that the province could supplement its homegrown talent with a supply of skilled workers from other countries.

“So, let’s also be clear then what’s not on the table,” Clark said. “The Ontario government is not offering any new financial incentives for Amazon.”

The online retail giant announced last month that it is hunting for a second North American office, saying it would spend US$5 billion to build the new headquarters to house as many as 50,000 employees.

READ MORE: Toronto to bid for Amazon’s second North American headquarters

The company said it wants to be near a metropolitan area with more than a million people; be able to attract top technical talent; be within 45 minutes of an international airport; have direct access to mass transit; and be able to expand that headquarters to more than 740,000 square metres in the next decade.

More than 100 cities in the U.S. and Canada, including Toronto, Halifax, Vancouver, Montreal and Edmonton, have since expressed their interest in pursuing the project, but it is unclear how many will submit a bid by Thursday – Amazon’s deadline for proposals.

On Tuesday, Ottawa and Gatineau, Que., submitted a joint bid which emphasized the city’s deep talent pool of technology workers and that it would have the support of both the Ontario and Quebec provincial governments.

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VIDEO: Canadian cities eager to bid for Amazon’s new HQ

Canadian cities eager to bid for Amazon’s new HQ
Canadian cities eager to bid for Amazon’s new HQ

Halifax submitted its pitch Wednesday, but even the bid’s biggest proponent admits it’s a long shot. Mayor Mike Savage would not reveal specifics about the city’s submission for the company’s new headquarters, but said Halifax’s quality of life was emphasized.

Clark said Ontario plans to ramp up training for students in technology and science disciplines that will help the province even if it doesn’t land Amazon. The government plan, announced Wednesday morning, would increase the number of students graduating by 25 per cent over the next five years – boosting the number of graduates from 40,000 to 50,000 a year.

“The government’s moves do not depend on what Amazon decides,” Clark said. “These changes will take place whether the company comes to Ontario or not. We believe the best thing we can do for our future is bet big on education and talent.”

Economic Development Minister Brad Duguid said bids from Ontario cities will focus on growing the pool of available talent, not financial incentives. But he acknowledged that Amazon would have the same access to the province’s business supports as any other firm in Ontario if it qualified.

“We’re not going to buy Amazon to come here,” he said.

“We don’t need to buy Amazon to come here. We have the competitiveness and the best talent base anywhere in North America today. That’s what’s going to draw companies like Amazon here.”

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Amazon has said it will make a final decision on the second headquarters next year.

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