Alberta government critical of Wattpad’s concerns

The Alberta government has issued pointed criticism at a Toronto tech company that chose Halifax over Calgary over concerns about provincial tax policy and Wexit.

“It is clear that Wattpad was looking for government handouts in order to establish an office,” Justin Brattinga, press secretary for Economic Development Minister Tanya Fir, said Tuesday. “We are making Alberta the best place to invest through the creation of broad-based supports, not cutting corporate welfare cheques to companies.”

On Monday, tech news service The Logic identified the storytelling platform Wattpad as the company that chose Nova Scotia over Alberta as the site of its second headquarters.

In a written statement to Calgary Economic Development, the company cited its concerns over separatist sentiment in the province and cuts to tax credits for tech firms.

On Tuesday, Mayor Naheed Nenshi said the removal of the tax credits had inhibited the growth of Calgary’s “great tech ecosystem.”

“The now-removed tax credits would have given tech companies, video game companies and other innovators some breathing room as they got set up and invested in our city and our people,” Nenshi told The Logic.

He also addressed the issue of the Wexit separatist movement that Wattpad had cited in its statement to Calgary Economic Development. “We have heard concerns from some business owners questioning if moving to a place where everything is confrontational right now is the right move for their companies,” Nenshi said. “We have to articulate Calgary’s desire to be included in the national discussion without stoking division between ourselves and the rest of Canada.”

Wattpad did not directly reply to the Alberta government’s criticism Tuesday, nor did it answer questions about the concerns it shared with CED.

“Like any company opening an office in a new city, in the course of meeting with different cities we were made aware of the provincial and federal programs available in each location,” said Wattpad spokesman Kiel Hume.

The Alberta government has eliminated a number of government programs for tech firms, including a $5-million tax credit for capital investment and credits for scientific research and economic development, as well as interactive digital media. The province also cut $129.7 million from the budget of Alberta Innovates, a startup-support organization.

Calgary Economic Development chief executive Mary Moran said two weeks ago that an unidentified 1,000-person firm had cited Wexit for not setting up shop in Calgary. The agency declined to comment Tuesday.

Wattpad, which has more than 80 million monthly users and was valued at about US$398 million in January 2018, has fewer than 200 employees. It had sought proposals from cities interested in hosting its second headquarters.

Hume said the company was looking for a city that was a twoto three-hour flight from Toronto; Calgary is about a four-hour flight. Hume did not directly answer questions about why the city was being considered.