City hopes to rebound by transforming from Canada’s energy capital into a high-tech hub
A day before Calgary submits its bid to lure tech giant Amazon to open new headquarters here, an official leading the effort said the city is not interested in “borrowing a company’s loyalty,” but will offer some sweeteners.
The Calgary bid will have no tax incentives — the city is limited by legislation on what it can offer — but the local bid committee won’t disclose whether it’s offering up real estate, according to Mary Moran, head of Calgary Economic Development.
More than 100 North American cities have mused about submitting bids to secure the economic windfall of having Amazon spend $5 billion and create up to 50,000 jobs for its second North American headquarters, dubbed HQ2. Bids are due Thursday.
“This kind of opportunity comes once in a lifetime,” Moran said, noting the bid has drawn support from more than 100 local businesses.
In its 200-page proposal, Calgary pitches the advantages of coming to Canada in general, including up to $600 million in annual savings from not having to pay private health-care premiums.
It also looks at Calgary’s own assets. In total, the bid suggests Amazon’s costs, such as labour, electricity and taxes, would be 14 per cent lower in Calgary than in Seattle, the home of the online retail giant, Moran said.
The city could also leverage funds from a community revitalization levy collected in a swath of east downtown, if Amazon was interested in moving its headquarters to the area.
Just as the city used the levy — which siphons a portion of property tax revenue for infrastructure improvements — to attract East Village development, Calgary could “invest” along with Amazon in a potential new campus, Moran said.
“We wouldn’t do a tax incentive,” she said. “The problem with tax incentives is, as soon as they run out, the company starts looking elsewhere.”
The federal government has signalled it won’t “put anything on the table” unless Canadian cities are shortlisted for HQ2, Moran said. But the city has developed an “incentive program” for Amazon based on what the province is prepared to offer, which Moran wouldn’t disclose.
“We don’t want other cities knowing.”
Meanwhile, large Canadian centres have been lining up for a chance to secure Amazon’s massive investment.
An official heading up Ontario’s bid estimated the online behemoth could save $1.5 billion annually setting up in Greater Toronto, citing less pay, lower taxes and a weaker currency.
Ottawa and Gatineau, Que. submitted a joint bid emphasizing a talented workforce and provincial government support.
Ontario isn’t offering any major new tax breaks, though it has made available various financial incentives it has previously given out to companies.
New Jersey Governor Chris Christie, however, offered Amazon up to $7 billion in tax incentives to build its second headquarters in Newark.
“We’re not interested in borrowing a company’s loyalty,” Moran said.
“When people come out and say (they’re offering) $7 billion, it’s because they have to compensate for being a high-cost jurisdiction, not offering a quality of life, not being able to build a talent pool and all those things that we offer.”
The Alberta government would not disclose what it’s willing to offer Calgary and Edmonton, which had also planned a bid for HQ2, but noted several benefits in Alberta, such as relatively low income taxes.
Calgary’s bid highlights nearly 13 million square feet of office real estate available after the oil price rout triggered widespread layoffs. It cites a deep pool of existing talent, and the city’s ability to continue to supply Amazon’s labour needs with post-secondary institutions.
The bid also touches on conditions that make for a good quality of life, including 333 days of annual sunshine, nearly 1,100 kilometres of bike paths and close proximity to the Rocky Mountains.
“Their number-one thing is really about talent, and they’ve told us that,” Moran said. “Calgary has a proven track record.”
With files from The Financial Post and The Canadian Press