Amazon.com Inc. has selected two major U.S. East Coast cities that offered more than US$2-billion in incentives for massive new offices, ending 14 months of global speculation over where one of the world’s most valuable companies will put down new roots – and passing over lone Canadian contender Toronto.
The e-commerce platform and cloud-services provider said on Tuesday that it would split its long-anticipated “HQ2” head-office expansion between the borough of Queens in New York City and a Northern Virginia suburb of Washington, promising 25,000 jobs and US$2.5-billion in investment for both, alongside an “operations center of excellence” in Nashville that would host 5,000 employees.
“These two locations will allow us to attract world-class talent that will help us to continue inventing for customers for years to come,” Amazon founder and chief executive Jeff Bezos said in a statement. The company declined an interview request.
A sea gull flies off with a scrap of fish near what used to be a dock facility on Long Island in New York on Nov. 13, 2018. Amazon announced Tuesday it has selected the Queens borough neighbourhood as one of two sites for its second headquarters.Bebeto Matthews
Despite not winning HQ2, the business and political leaders who put Toronto’s proposal together said the effort drew global attention to the city and its tech community. Toronto’s bid, which did not include financial incentives, highlighted the city’s diversity, the region’s abundance of skilled workers, and potential cost savings through lower salaries and Canadian health care. Unlike some of the 238 original bidders, such as Montreal, Toronto made its bid fully public.
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The regional investment agency Toronto Global, which spearheaded the bid, estimates that Toronto’s submission generated equivalent awareness of the city worth $143-million in advertising spending. Its chief executive, Mr. Lennox, said in an interview that the investment agency now has more than 250 companies looking at the city as a result of the HQ2 process. As such, he believes the process was a success: It drew international attention to the city without offering exclusive incentives to the massive company.
“Can you imagine,” Mr. Lennox said, what the reaction would have been like if governments offered billions in tax breaks “to a company that patently doesn’t need it? What does that say to every other company that made investments in the Toronto region, and to the domestic industry? It’s a race to the bottom.”
Toronto Mayor John Tory said that despite his city being passed over, the HQ2 competition alone yielded benefits, with the bid document downloaded 17,000 times, many by prospective suitors. “Right now, Toronto is a beacon for investment, for smart people and for global companies,” the mayor said. Former Toronto councillor Michelle Holland, who as “innovation chief” under Mr. Tory last term helped brand the city as a tech destination, including through the bid, said that “though we didn’t win Amazon, I think there’s going to be other major companies to look forward to Toronto to locate.”
amazon nation
Across Canada, Amazon has created more than
7,000 full-time jobs, from its customer fulfill
ment facilities in Ontario, British Columbia and
Alberta to the AWS infrastructure region in the
Montreal area to the company’s Vancouver and
Toronto Tech Hubs.
Calgary
Vancouver
Winnipeg
Montreal
Ottawa
Toronto
Amazon’s workforce
Global
575,000
Canada*
12,100
( 5,400 disclosed 6,700 promised)
*Ontario, British Columbia, Alberta and Quebec
Amazon centres in Canada
Site
Square footage
Jobs
1,000 disclosed
4,000 promised
Vancouver
Undisclosed
Corporate offices
New Westminster,
B.C.
450,000+
Combined 800
Fulfillment Centre
Delta, B.C.
190,000+
Fulfillment Centre
Tsawwassen First
Nations, Deltaport,
B.C.
700 (in 2019)
450,000
Fulfillment Centre
1,000+
Calgary
600,000
Fulfillment Centre
Winnipeg
Undisclosed
Undisclosed
AWS Thinkbox
600+
Toronto
Undisclosed
Tech Hub
Mississauga, Ont.
500,000
Fulfillment Centre
Combined 2,000
Milton, Ont.
375,000
Fulfillment Centre
Brampton, Ont.
500,000
Fulfillment Centre
Brampton, Ont.
850,000
Fulfillment Centre
600 (in 2019)
Carlsbad Spr., Ont.
1,000,000
Fulfillment Centre
1,400 (in 2019)
Caledon, Ont.
1,000,000
Fulfillment Centre
Montreal
Undisclosed
Undisclosed
AWS Canada
(Central)
JOHN SOPINSKI/THE GLOBE AND MAIL
SOURCE: amazon
amazon nation
Across Canada, Amazon has created more than 7,000
full-time jobs, from its customer fulfillment facilities in
Ontario, British Columbia and Alberta to the AWS infra-
structure region in the Montreal area to the company’s
Vancouver and Toronto Tech Hubs.
Calgary
Vancouver
Winnipeg
Montreal
Ottawa
Toronto
Amazon’s work force
Global
575,000
Canada*
12,100
( 5,400 disclosed 6,700 promised)
*Ontario, British Columbia, Alberta and Quebec
Amazon centres in Canada
Site
Square footage
Jobs
1,000 disclosed
4,000 promised
Vancouver
Undisclosed
Corporate offices
New Westminster,
B.C.
450,000+
Combined 800
Fulfillment Centre
Delta, B.C.
190,000+
Fulfillment Centre
Tsawwassen First
Nations, Deltaport,
B.C.
700 (in 2019)
450,000
Fulfillment Centre
1,000+
Calgary
600,000
Fulfillment Centre
Winnipeg
Undisclosed
Undisclosed
AWS Thinkbox
600+
Toronto
Undisclosed
Tech Hub
Mississauga, Ont.
500,000
Fulfillment Centre
Combined 2,000
Milton, Ont.
375,000
Fulfillment Centre
Brampton, Ont.
500,000
Fulfillment Centre
Brampton, Ont.
850,000
Fulfillment Centre
600 (in 2019)
Carlsbad Spr., Ont.
1,000,000
Fulfillment Centre
1,400 (in 2019)
Caledon, Ont.
1,000,000
Fulfillment Centre
Montreal
Undisclosed
Undisclosed
AWS Canada
(Central)
JOHN SOPINSKI/THE GLOBE AND MAIL, SOURCE: amazon
amazon nation
Across Canada, Amazon has created more than 7,000 full-time jobs, from its cus
tomer fulfillment facilities in Ontario, British Columbia and Alberta to the AWS
infrastructure region in the Montreal area to the company’s Vancouver and
Toronto Tech Hubs.
Calgary
Winnipeg
Vancouver
Montreal
Ottawa
Toronto
Amazon’s work force
Global
575,000
Canada*
12,100
( 5,400 disclosed 6,700 promised)
*Ontario, British Columbia, Alberta and Quebec
Amazon centres in Canada
Site
Square footage
Jobs
1,000 disclosed
4,000 promised
Vancouver
Undisclosed
Corporate offices
New Westminster, B.C.
450,000+
Fulfillment Centre
Combined 800
190,000+
Delta, B.C.
Fulfillment Centre
700 (in 2019)
Tsawwassen First
Nations, Deltaport , B.C.
450,000
Fulfillment Centre
1,000+
Calgary
600,000
Fulfillment Centre
Winnipeg
Undisclosed
Undisclosed
AWS Thinkbox
600+
Toronto
Undisclosed
Tech Hub
Mississauga, Ont.
500,000
Fulfillment Centre
Combined 2,000
Milton, Ont.
375,000
Fulfillment Centre
Brampton, Ont.
500,000
Fulfillment Centre
Brampton, Ont.
850,000
Fulfillment Centre
600 (in 2019)
Carlsbad Springs, Ont.
1,000,000
Fulfillment Centre
1,400 (in 2019)
Caledon, Ont.
Fulfillment Centre
1,000,000
Montreal
Undisclosed
Undisclosed
AWS Canada (Central)
JOHN SOPINSKI/THE GLOBE AND MAIL, SOURCE: amazon
Toronto was widely considered an unlikely candidate in the months leading up to the decision, in part because of the lack of proposed tax breaks. (Amazon described economic incentives as “one factor” in its decision but said “attracting top talent was the leading driver.”) “We held true to what I think is clearly the right position,” Ed Clark, the former TD Bank chief who helped lead Toronto’s proposal, said in a phone interview. “The only case I might have been disappointed is if there was a city that won with no incentives.”
As the HQ2 quest wound down this month, experts such as the urbanist Richard Florida and the anti-monopoly advocate Stacy Mitchell began describing it as a quest for data that could help Amazon plan future expansions for maximum profit. While Toronto’s proposal was made public, many bidders kept theirs in the dark (declining or heavily redacting Freedom of Information requests), leaving Amazon with reams of exclusive information – concerning talent, real estate and what kinds of financial incentives were available to the company.
“They crowd-sourced information on sites, on local work force development programs, on local talent pools, on local incentives – I think this is just the beginning of the announcement,” said Mr. Florida, director of cities at the Martin Prosperity Institute at the University of Toronto. “I don’t think there’s anything wrong with giving information or doing the dance with a company like Amazon. You just have to tell the taxpayers what you’re doing.”
For some tech leaders already struggling with a talent shortage in Toronto and the broader region – the proposal’s municipalities extended as far as Kitchener-Waterloo – the long-speculated Toronto HQ2 loss came as a relief.
“Every ecosystem has to balance how to use tech talent, divided between startups and big tech companies," said Michele Romanow, the Dragons' Den star and co-founder and president of alternative-financing company Clearbanc, which just raised US$70-million. “If there’s too many big companies you’re not going to have Canadian growth, because we need our own startups to become big employers here.”
Others saw it as a loss. “I think it would have stimulated a lot of additional startups,” said Rob Mionis, CEO of Celestica Inc., the Toronto-based multinational engineering and manufacturing firm.
Jim Balsillie, the chair of the Council of Canadian Innovators and the former co-chief executive of Research in Motion – now BlackBerry – said he saw the HQ2 bid process as a missed opportunity to involve Canadians already deeply involved in tech.
“The bid was done without any economic study to show the impact on our tech ecosystem, without consultation with domestic high-growth companies and without involving any innovation economy experts," Mr. Balsillie said in an e-mail. "But as is often the case for Canada’s faux innovation strategies, it was led by people without any experience in commercializing ideas, let alone the innovation economy, again confusing an innovation strategy with a cheap-jobs branch-plant strategy.”
Danielle Keenan, a spokesperson for Innovation, Science and Economic Development Canada said that the federal government “will continue to work to create jobs and opportunities” for tech talent and companies across Toronto and Canada, though “we would have preferred to see Amazon join Toronto’s world-leading technology economy” with a second headquarters there.
Amazon employs more than 7,000 people across Canada, with more than 6,000 additional jobs promised soon.
With a report from Jeff Gray
Josh O’Kane