Ontario advantage

GTA’s Amazon HQ2 bid pitches $1.5B salary savings

TORONTO — Setting up its second headquarters in the Greater Toronto Area would save Amazon $1.5 billion a year, the man heading up Ontario’s bid for the project said Wednesday, as the deadline loomed for cities in North America to make their pitch.

Ed Clark, a business adviser to Premier Kathleen Wynne, said the region offers highly trained talent at a savings when compared to most U.S. jurisdictions — a software programmer in Ontario costs 34 to 38 per cent less than in Boston or New York — and corporate taxes in the province are lower than south of the border.

“What is Ontario’s core advantage?” Clark said. “Great talent at a very competitive cost. That’s an edge the government is determined not only to maintain but to sharpen.”

Other reasons for the lower salaries include the employees’ access to social programs like universal health care, and a strong U.S. dollar compared to the loonie.

Immigration is another key advantage, Clark said, adding that the province could supplement its homegrown talent with a supply of skilled workers from other countries.

“So, let’s also be clear then what’s not on the table,” Clark said. “The Ontario government is not offering any new financial incentives for Amazon.”

The online retail giant announced last month that it is hunting for a second North American office, saying it would spend US$5 billion to build the new headquarters to house as many as 50,000 employees.

The company said it wants to be near a metropolitan area with more than a million people; be able to attract top technical talent; be within 45 minutes of an international airport; have direct access to mass transit; and be able to expand that headquarters to more than 740,000 square metres in the next decade.

More than 100 cities in the U.S. and Canada, including Toronto, Halifax, Vancouver, Montreal and Edmonton, have since expressed their interest in pursuing the project, but it is unclear how many will submit a bid by Thursday — Amazon’s deadline for proposals.

Waterloo Region is supporting Toronto’s bid for the headquarters.

On Tuesday, Ottawa and Gatineau, Que., submitted a joint bid which emphasized the city’s deep talent pool of technology workers and that it would have the support of both the Ontario and Quebec provincial governments.

Clark said Ontario plans to ramp up training for students in technology and science disciplines that will help the province even if it doesn’t land Amazon. The plan, announced Wednesday morning, would increase the number of students graduating by 25 per cent over the next five years — boosting the number of graduates from 40,000 to 50,000 a year.

“The government’s moves do not depend on what Amazon decides,” Clark said. “These changes will take place whether the company comes to Ontario or not. We believe the best thing we can do for our future is bet big on education and talent.”

Economic Development Minister Brad Duguid said bids from Ontario cities will focus on growing the pool of available talent, not financial incentives.

Amazon has said it will make a final decision on the second headquarters next year.