Toronto Still in the Running for Amazon HQ2
January 18 2018 - 2:10PM
Dow Jones News
By David George-Cosh
TORONTO -- This city, the fourth biggest in North America by
population, found itself Thursday to be the sole foreigner on
Amazon's shortlist for the site of its second headquarters, joining
the ranks of New York, Boston, Atlanta and others.
While Toronto's pool of tech talent likely is a draw, say those
behind the government's bid, the city faces hurdles given tax
advantages in the U.S., uncertainty around U.S.-Canada trade, and
the political implications of creating thousands of jobs outside
the U.S.
The Toronto proposal doesn't include any tax incentives, instead
highlighting the region's access to highly skilled talent with
salaries nearly 40% less than those for similar positions in New
York or Boston, and the country's friendly immigration policy. The
proposal also notes how the country's health care system could save
the tech giant about $600 million a year in private health care
costs.
Steven Del Duca, Ontario's minister of economic development and
growth, said Thursday that Ontario has maintained an attractive tax
structure aimed at drawing international investment while offering
a steady pipeline of low-cost engineering talent from universities
around the province.
He said he expects the Toronto team to meet with Amazon
executives in coming weeks to discuss any issues, possibly
including infrastructure spending.
"We're going to look at all" of Amazon's concerns, Mr. Del Duca
said.
Amazon already has a significant presence in Canada with
engineering teams in Vancouver and Toronto; a development center
for Alexa, the company's voice-control system, in Ottawa; as well
as distribution centers across the country.
As well, Toronto is home to several Canadian headquarters for
U.S. tech giants including Microsoft Corp.; Google's parent
company, Alphabet Inc.; and Facebook Inc. And it has agreed to work
with Sidewalk Labs, Alphabet's urban design unit, on building a
high-tech waterfront development. Canada has drawn record venture
financing to its startup base with 3.6 billion Canadian dollars
($2.9 billion) invested in its startups in 2016, up from C$3.1
billion the previous year, according to data from Thomson
Reuters.
Canadian Prime Minister Justin Trudeau made a pitch to Amazon
CEO Jeff Bezos last year to consider Canadian cities for the home
of a second headquarters.
Yet Mr. Del Duca and others acknowledge that Toronto's chances
could be hampered by the Trump administration's sweeping overhaul
of the U.S. tax code that now sets the corporate tax rate at 21%,
while Toronto's proposal puts its rate at 26.5%.
In addition, Toronto's place on the shortlist comes at a tenuous
time in U.S.-Canada relations. Canada is in the midst of talks with
the U.S. and Mexico to renegotiate the North American Free Trade
Agreement, and the negotiations have grown contentious.
"It was likely enough of a message by Amazon to put Toronto on
the list. That Amazon could go outside the United States should
help Amazon get more subsidies and tax breaks from U.S. federal,
state and local governments," said Christopher Sands, director of
the Center for Canadian Studies at Johns Hopkins University's
Washington campus.
Toronto won out over nearly a dozen Canadian cities that
submitted bids for Amazon's next headquarters, including Ottawa,
the national capital; Hamilton and Vancouver.
--Paul Vieira contributed to this article.
Write to David George-Cosh at david.george-cosh@wsj.com
(END) Dow Jones Newswires
January 18, 2018 13:55 ET (18:55 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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