CITY WON’T LOSE OUT ON TAXES DESPITE ERICSSON DEPARTURE
Vaudreuil-Dorion mayor is confident another high-tech player will come forward
The bad news is the $1.3-billion Ericsson facility in VaudreuilDorion, which opened in an industrial park just north of Highway 40 last December, will close up shop sometime in 2018 as a result of sagging sales and cost-cutting measures. About 50 employees will be affected.
The Swedish-based communication-technology company made the announcement in its quarterly financial report last week, saying that because of ongoing restructuring, it will close its information-communication technology plant in Vaudreuil-Dorion.
The good news is that the facility will remain a vital source of industrial property-tax revenue while Ericsson searches for another high-tech firm to take over the property, assured Mayor Guy Pilon.
Pilon said that while he was shocked to hear Ericsson would leave town after investing more than $1 billion in the new facility, he is confident another hightech player will come forward, speculating on an industry giant of the likes of an Amazon or a Google.
LOSING 50 JOBS
“We’re losing about 50 jobs, those are engineers, so they won’t have any problem finding something elsewhere,” Pilon said. “And for the taxation, it doesn’t change anything because it’s industrial; it’s not a residential or commercial building. It won’t make a big hole in our budget.”
The city and Ericsson are both looking for potential suitors for the soon-to-be-vacated 20,000-square-metre building, which is both energy efficient and state-of-the-art, Pilon noted.
“It will remain a data centre,” he said, adding that a company’s data centre can be located at a different site than its related distribution or warehouse centres.
As part of government efforts to entice Ericsson to build in Vaudreuil-Dorion, the municipality of 38,000 residents offered the firm a property-tax break. The company had negotiated a five-year, $2.8-million annual tax holiday, which meant the city received $1.2 million in taxes from Ericsson in 2017.
Pilon said the property-tax holiday agreement would cease once Ericsson eventually closes its doors several months down the road. Property taxes will continue to be paid to the city by either Ericsson or the next company to take over the facility, Pilon said.
“The building remains there and (the new owner) will pay taxes for sure,” he said.
When the original project was announced in 2013, it was reported that the Quebec government, led by then-Parti Québécois leader Pauline Marois, a former longtime Île-Bizard resident, would provide up to $30 million worth of financial support to Ericsson. This offer included reduced hydro rates and a potential income-tax holiday for a decade.
Critics at the time scoffed at Quebec’s offer, describing it as unnecessary corporate welfare.
While the offer may have persuaded Ericsson to build in Vaudreuil-Dorion, it’s another sign that corporate welfare doesn’t lead to long-term job stability.
Ericsson officials have stated the firm will respect its obligations regarding any agreements with local governments as it disposes of the Vaudreuil-Dorion facility.