Trying to buy corporate investment doesn’t make a lot of sense

Sure, let’s showcase our city for Amazon but using tax incentives is a losing game

As far as bids go, Calgary probably has better odds of landing the 2026 Winter Olympics, but landing Amazon’s HQ2 would certainly have a much greater payoff for the city.

And given how much we’ve spent so far in merely investigating the possibility of bidding for the Olympics — never mind the skyrocketing price tag of actually bidding and then hosting — the efforts to woo Amazon look like quite a bargain in comparison.

However, given the enthusiasm for luring the tech retail giant to our city, and the quick fix that would appear to deliver for Calgary’s ailing economy, this could quickly turn into a situation where it becomes anything but a bargain.

If Amazon plans on turning this into an auction, and making the decision based on how much money their various suitors are prepared to throw at them, it may no longer be worth it.

At the end of the day, corporate welfare is still corporate welfare. Bribing and subsidizing business to lure and keep them here is not a long-term strategy for success. We should have learned that from the ongoing series of Bombardier fiascos.

And while Amazon may be on much more stable footing than Bombardier, it’s not a precedent we should want to set.

Wisconsin, for example, recently celebrated announcement of a deal to lure Foxconn — which manufactures iPhones for Apple, among other things – to their state to build a brand new, $10-billion facility. Even factoring in the $3 billion in tax breaks, it still sounds like a pretty good deal for Wisconsin — perhaps even many Albertans would support offering Amazon something similar.

However, a report released in August by Wisconsin’s Legislative Fiscal Bureau is putting a damper on the celebrations. It found that even under a best-case scenario, the state wouldn’t break even for 25 years. Depending on how many jobs are actually created, it could be even longer.

That should serve as a warning for Calgary and our Amazon ambitions. In a perfect world, this would convince all jurisdictions to simply focus on making themselves as competitive as possible, so as to encourage all sorts of businesses to relocate or to build and grow from the ground up.

For now, fortunately, Calgary’s Amazon bid is more about selling our advantages rather than writing numbers on a napkin. But that may yet come. Already, there’s been talk about using a community revitalization levy (sound familiar?) to perhaps steer some tax dollars in Amazon’s direction, should they show some interest in us.

Calgary Economic Development CEO Mary Moran had some encouraging words about the idea of throwing money at Amazon, or any other company: “We wouldn’t do a tax incentive. The problem with tax incentives is, as soon as they run out, the company starts looking elsewhere.”

She’s right about that. But at the same time, Moran hinted at the existence of an “incentive program” that’s been developed based on what the province might offer, which sounds a little ominous.

Inevitably, if Amazon was really serious about building its HQ2 in Calgary, I’m sure we’d end up offering them something more than just an overview of how great our city is. And I’m sure if we somehow won the sweepstakes, that people would be excited enough to let a few hundred million dollars slide.

This all speaks to a little desperation on our part, though. Obviously, Calgary has been hurting for the last couple of years, and landing a big fish like Amazon would be quite the quick fix. We should be realistic about addressing our challenges, rather than pinning our hopes on a lottery ticket.

Is Calgary as competitive as it can be? Is Alberta? If the province wants to offer something, how about reversing the damaging corporate tax increase the NDP so hastily ushered in two years ago?

So sure, let Amazon know we’re here. But let’s not buy their affection — or anyone else’s.