AMAZON QUESTIONS
There is much to applaud in the announcement this week that online retailer Amazon will occupy 415,000 square feet of new office space to be built as part of the redevelopment of the Canada Post building on West Georgia Street in Vancouver. Plans call for two towers to be built on the existing structure, adding 1.1 million square feet of office space while preserving the character of the heritage building. Amazon is expected to employ 3,000 high-tech workers at the site.
The announcement brought out Prime Minister Justin Trudeau, who said that generations of innovators, thinkers and hard workers have made Canada a country where new ideas are welcome, talent thrives and creativity flourishes.
We don’t mean to rain on the parade, but there are a few issues that give us pause. For instance, will Amazon draw on the local pool of high-tech workers? If it does, what will be the impact on Vancouver’s burgeoning high-tech cluster of startups and mid-sized companies? They could face recruitment problems given a limited number of skilled high-tech workers. What’s more, they may not be able to match the salaries that Amazon will pay.
Recruitment is already challenging. A recent study found that a high percentage of graduates in science, technology engineering and math from Canada’s top universities, including UBC, are choosing to work outside of Canada, mainly in the U.S., raising concerns about a high-tech brain drain.
Perhaps Amazon will not rely on local talent, but take advantage of Canada’s generous immigration policies that would allow the company to hire workers from countries who are unable to go to the U.S.
And maybe Amazon has its eye on the bottom line. Some reports show Vancouver tech workers earn half of what their Seattle counterparts make. The disparity does not take into account that U.S. compensation often includes health insurance premiums, which are covered by government plans in Canada.
Finally, where will all those workers, and their families, live? More demand for housing could raise prices and rents, offsetting government demand-suppression measures. On the bright side, Amazon does not expect to have its 3,000 new workers in place until 2022, giving time for policy-makers to increase supply.
Bringing more high-tech workers to Vancouver is to be encouraged, but we have to be prepared for possible tech-sector and housing upheaval and plan action now.