Danielle Smith: Amazon rejection a wake-up call for Calgary

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WATCH ABOVE: Calgary has lost its bid to host Amazon's second North American headquarters. As Doug Vaessen reports, Toronto is the only Canadian city to make the online retailer's shortlist – Jan 18, 2018

We don’t have enough tech-savvy hipsters.

That seems to be the deciding factor in why Amazon gave Calgary the brush-off in its bid to win the company’s new headquarters.

I always thought it was a longshot, particularly when we started hearing stories of how much other places were offering to sweeten the pot.

It’s embarrassing to see municipal politicians tripping over themselves to sell their taxpayers down the river. New Jersey offered up $7 billion in subsidies; Illinois offered $2 billion. Calgary can’t win the subsidy game when we are competing against states that are prepared to offer lavish buy-offs like this.

It makes no sense to give taxpayer dollars to companies at all, let alone a global behemoth worth $625 billion.

I asked Mary Moran, head of Calgary Economic Development (CED), why we bothered to bid in the first place. Turns out, learning Calgary’s deficiencies from a whale in the high-tech industry is probably the best thing we got out of losing. Who says there are no prizes for participating?

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LISTEN: Calgary Economic Development president and CEO Mary Moran on Calgary’s Amazon bid

READ MORE: Calgary Economic Development ‘really disappointed’ with failure of city’s bid for Amazon HQ2

Calgary’s bid had several strengths; one of which is that it didn’t offer subsidies. As Moran put it, cities have to offer subsidies to compensate for deficiencies they have. Alberta’s low rate of taxes and publicly funded health care system would have provided an estimated $2.1 billion benefit to Amazon without giving them an unfair advantage over other businesses.

Moran also said she wouldn’t have been doing her job if they didn’t bid. Having already been in discussions with Amazon over other projects, it just made sense to formally bid on the headquarters. Amazon did choose Balzac, Alta. for its distribution centre after all. But notably, it didn’t choose Calgary because land costs are too high “for a variety of reasons.” I suspect that’s because Calgary charges excessive rates on commercial properties – perhaps a takeaway Calgary city council can learn from, too.

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The biggest surprise to me – especially since Calgary has grown at a spectacular rate over the last two decades – is they didn’t think they’d have enough people with enough of the right skills to fill the jobs. That’s a big wake up call.

The natural resource industries have become so high-tech, I think we all assumed the skills were easily transferable. But as one listener put it, there is a difference between coding and applied technology. Applied is drilling a hole; coding is creating a program to drill that hole. We have lots of the former type of workers and not enough of the latter.

WATCH BELOW: ‘It was obviously disappointing news’: Premier Rachel on Amazon HQ2 decision

Click to play video '‘It was obviously disappointing news’: Premier Rachel on Amazon HQ2 decision' ‘It was obviously disappointing news’: Premier Rachel on Amazon HQ2 decision
‘It was obviously disappointing news’: Premier Rachel on Amazon HQ2 decision – Jan 18, 2018

READ MORE: Toronto only Canadian city shortlisted for Amazon HQ2

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A couple of tech companies – Solium and Benevity – are already feeling the pinch from this and are working with Calgary Economic Development to attract workers. Though we have good programs at the University of Calgary and SAIT, we are able to turn out just 1,000 grads a year with the needed skills. We are in danger of falling even further behind. British Columbia just announced it was adding an additional 2,900 post-secondary spaces in high-tech.

The good news is the CED was able to use its $500,000 marketing budget to generate 150 million hits for Calgary. It’s tough to imagine a marketing campaign that would have delivered similar value.

Calgary even created a useful meme out of it. Amazon told Moran it’s become an internal catchphrase at Amazon: would you wrestle a bear for it?

The bad news is that everyone in the high-tech world now knows we don’t have enough grads to meet their needs.

There is so much lip service paid to economic diversification. But unless we address this skilled worker shortage, we aren’t going to be able to win the next high-tech HQ contest either. Even if we wrestle a bear.