Ontario rules out new financial incentives in bid to land Amazon headquarters

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Ontario's government has ruled out giving Amazon.com Inc. any money or special deals in its bid to land the online giant's second corporate headquarters; the province is instead betting that higher education will be its advantage.

The hotly contested battle to become Amazon's second home has been dubbed "the mother of all bidding wars" as jurisdictions across North America have offered billions of dollars in tax breaks and other lavish incentives to secure a project the company says will cost $5-billion to build and could eventually employ 50,000 people. However, Ed Clark, the former TD Bank chief executive who serves as Premier Kathleen Wynne's business adviser, announced on Wednesday morning that Ontario plans to woo the American company by rapidly increasing the number of science and technology graduates coming out of the province's schools.

"The Ontario government is not offering any new financial incentives to Amazon, nor any incentives that are not available to others who seek to grow or locate jobs here," Mr. Clark said before Thursday's deadline for cities to submit their bids to Amazon. He promised a business crowd in downtown Toronto that Ontario's best advantage over competing cities such as Chicago or Boston is "great talent at a very competitive cost."

According to Mr. Clark, who was asked by Ms. Wynne to co-ordinate Ontario's approach to Amazon, the company could save up to $1.5-billion annually on its labour bill because highly trained workers in Ontario cost between 34 and 38 per cent less than similar American workers. He said that Canada's lower corporate taxes, universal health care and flexible immigration system were further strengths for the province's bid.

The centrepiece of Ontario's bid is the province's plan to boost by 25 per cent the number of postsecondary students graduating with degrees in science, technology, engineering or math, known as the STEM disciplines. The announcement comes as technology firms in the province have complained of labour shortages and expressed concerns about the impact of an arrival the size of Amazon. The province now hopes to graduate 50,000 students annually in the STEM fields within five years.

The province will also be focusing directly on increasing the number of Ontarians working in artificial intelligence, with a $30-million pledge to have 1,000 masters' graduates in AI-related fields annually within five years.

"It turns out that the province's best response to Amazon is to offer what we offer everyone, from companies established here, to those thinking of coming," Mr. Clark said, ruling out any special treatment for Amazon.

According to Mr. Clark and Ontario Economic Development Minister Brad Duguid, the plan to boost graduates will happen whether or not Amazon decides on setting up shop in the province.

"If it's not Amazon it'll be the next company that's looking to be in the most competitive, innovative ecosystem anywhere in North America," said Mr. Duguid about the effect of the plan. On Tuesday, a spinoff of Google's parent company announced plans to create a tech-centred community in Toronto.

However, Carl Rodrigues, the CEO of Mississauga-based software maker SOTI, was disappointed by Mr. Clark's speech. "I find his views a little bit disappointing and surprising," he said of Mr. Clark. "I think he's a little bit out of touch with what are the needs of Canadian tech businesses."

Mr. Rodrigues said he was surprised when he heard the province's plan said tech labour in Ontario is cheap. In his speech, Mr. Clark said that the average Toronto tech worker makes $70,274 while one in Ottawa earns $66,194. "Those numbers are ridiculous," said Mr. Rodrigues. "Amazon isn't after a junior worker with no skills, they are after the best and the brightest, who will make over $100,000."

While his company is now valued at more than $1-billion and has more than 700 employees, Mr. Rodrigues said he has also run into labour shortages. Instead of hearing a solution from Mr. Clark, he called the province's new education plan a "quick fix." He said only an ambitious long-term project to reform the education system from top to bottom to favour more tech workers would begin to meet demands.

The Greater Toronto Area's municipalities will submit a regional bid for Amazon's headquarters on Thursday. A number of other municipalities across Canada are also vying for the project, including Ottawa, Vancouver and Edmonton. Mr. Clark conceded that political realities in the United States might make it difficult, if not impossible, for Amazon to create so many jobs in a foreign country.