Brad Duguid is, mercifully, not starry-eyed about Ontario’s chances of landing Amazon’s new headquarters.
“Let’s all be real about this,” the minister for economic development and growth told TVO.org on Monday. “It is a challenging time for an American company to locate a head office outside of the United States. We have to be realistic about that. This may not be a level playing field.”
Ever since the internet giant announced it was on the hunt for a city willing to host its second headquarters — promising an investment of $5 billion and 50,000 new white-collar jobs — municipalities across North America have made their eagerness known. Toronto Mayor John Tory has said the provincial capital will bid; Brampton, Hamilton, Ottawa, and Waterloo Region have expressed interest too. Ontario has tasked Liberal jack-of-all-trades and former TD CEO Ed Clark with coordinating efforts at the provincial level to win Amazon’s competition.
Duguid says the province doesn’t mind where Amazon lands, exactly — so long as it lands in Ontario: “My hope would be that in a certain point in time, there could be some collaboration. This will be great for all of Ontario, no matter where it lands. If it lands in Toronto, it will be great for Ottawa. If it lands in Ottawa, it will be great for Toronto.”
Ontario has a lot going for it. In Toronto, First Gulf’s proposed East Harbour development is already in the planning phases and will be almost exactly what Amazon says it’s looking for. Waterloo Region is at the other end of the province’s tech corridor, and both Hamilton and Brampton could claim to be affordable in-between locations with easy-enough access to both Toronto and K-W.
That most of the likely contenders have the transit and airport access Amazon wants is also a plus. Canada’s low health-care costs, plus a dollar that’s trading around 80 U.S. cents, probably don’t hurt either.
Before everyone gets too excited, though, let’s all collectively take a breath and remember exactly what’s going on here: Ontario and its municipalities are being extorted. (So are municipalities outside the province, but they’re of less immediate concern to TVO.) Amazon is looking for hundreds of millions, if not billions, of dollars in handouts from local, state, and provincial governments — and that’s primarily what will inform their decision.
Ontario isn’t naive, nor is it new to this game. Last year the province handed $85 million over to Fiat Chrysler to ensure the Pacifica minivan would be built in Windsor, allegedly preserving the automaker’s 4,000 existing jobs there and creating 1,200 new ones. That was after political heat leading up to the 2014 election nixed the company’s initial request for up to $700 million.
It’s a useful to remember how much Fiat was asking for initially, and how little it eventually got: while large employers may claim they need incentives to locate in Ontario (Fiat’s Sergio Marchionne has complained that the Liberals have made the province “not what I would call the cheapest jurisdiction”), governments shouldn’t simply open the public purse and tell global corporations to help themselves.
Moreover, Ontario’s history with other big manufacturers, such as Bombardier, suggests we’re desperately trying to buy ourselves a seat under the Sword of Damocles: even if we do manage to bribe Amazon into coming here, before long we’ll also have to bribe them into staying.
And Ontario is bidding against governments with much, much deeper pockets than it currently has. Having just barely achieved a balanced budget (and not even, if you ask the Auditor General or Financial Accountability Officer), is the government willing to come to the table with more money than its competitors? The governor of Wisconsin just lured Foxconn to that state with $3 billion in tax incentives for 3,000 initial jobs, and Wisconsin is hardly the state with the fattest wallet in the union.
Then there’s the political context to which Duguid alluded at the beginning: no U.S. company is in a hurry to locate production abroad, given the likelihood that it’ll wind up on the receiving end of a tirade from Donald Trump, whose tweets move markets. Trump has a special dislike for Amazon CEO Jeff Bezos, so who knows how that will affect the choice.
So: We probably can’t afford to play this game. Even if we could, we’d have little hope of winning. And even if we won, the prize might not be that great.
That’s not to say 50,000 jobs aren’t worth winning — but just because we want them doesn’t mean we should chase them at any cost. Public money ought to be precious. Every other day, the province crows about the success of the Toronto-Waterloo tech corridor, which now employs more than 200,000 people across thousands of firms. Ontario’s tech workers are hardly suffering the misfortunes unemployed coal miners, steelworkers, and foresters are — and it doesn’t seem as if the GTHA’s regional economy will need a massive injection of Amazonian largesse to keep it humming.
Jobs are good to have, and more jobs are better. But plenty of companies in this province manage to employ people without making billion-dollar ransom notes part of their business plan. Ideally Ontario would simply refuse to play along and let other governments impoverish themselves chasing this unicorn. But if that’s too much to ask, then at least let’s keep the damage in the millions, not billions.
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