Edmonton has become one of Canada’s winners in the increasingly intense competition between cities hoping to attract high-paying tech jobs. According to newly released documents, its recent success is thanks in part to a confidential, incentive-heavy playbook it developed in a bid to secure Amazon’s second headquarters.
The Logic obtained a heavily redacted copy of Edmonton’s Amazon bid via an access to information request, as well as over one hundred pages of related emails from figures including Edmonton Mayor Don Iveson. The documents lay out a plan for the city’s long-term economic growth, as well as repeated concerns over any part of the plan ever becoming public. Indeed, the city has been fighting to keep the bid private for the last three years.
Talking Point
Edmonton used its unsuccessful bid for Amazon’s second headquarters to attract other tech firms to the city. That bid, which the city has been trying to keep secret for three years, offered $2.2 billion in labour cost savings and a host of incentives. It’s helped Edmonton bring in large tech firms and grow its tech workforce at a faster rate than Halifax, Winnipeg and Ottawa.
The city offered Amazon 18 incentives including funding for employee training, favourable options for acquiring municipal land, lease incentives, “direct support” for investments in building upgrades and matching research & development funds for provincial programs designed to encourage drones, machine learning and autonomous vehicles. Edmonton also said Amazon could save billions in labour costs.
The Edmonton Economic Development Corporation (EEDC) developed the proposal. CEO Maggie Davison, who took on the top job on an interim basis in April, said she hasn’t read the bid but confirmed the city has subsequently used some of the incentives packaged in the Amazon bid to bring in other firms.
“Either they get a break on their lease, or they get free rent for a couple of years, or they get help with construction. That’s pretty common,” said Davison, adding that larger firms would get more incentives.
Edmonton submitted its bid in October 2017, after the Seattle-based company announced a competition to host its second headquarters. It was one of nearly 250 competing cities and regions across North America, many of which offered the company hefty inducements in an effort to win the estimated US$5-billion development and promised 50,000 jobs. In November 2018, Amazon announced plans to split the development between Arlington, Virginia and New York City. It subsequently pulled out of the proposed New York location after opposition from citizens’ groups and some local politicians.
At the time of its bid, Edmonton’s unemployment rate had just hit nine per cent, Alberta oil was about US$39 a barrel, NDP premier Rachel Notley was more than a year into her mission to transform Alberta’s economy after four decades of Progressive Conservative government and the city’s tech sector was growing at about 2.6 per cent a year.
Internal emails show the city always thought it was a longshot. “Although probability of winning is low, the process reconfirms to the region the need for a single voice and marketing approach,” reads a report prepared by then-EEDC President Brad Ferguson for his board of directors. However, from the beginning the city thought the Amazon bid could be a blueprint for future success.
“It is expected that this information will serve not only for the HQ2 investment but for other investments across [Amazon’s] lines of business. The work of EEDC and stakeholders will also find utility when refining the proposal details but also in application to other potential investors,” reads a November 2017 update for EEDC’s board of directors.
Edmonton has had quite a bit of success bringing in tech firms in the years since. In 2018, Amazon announced it would build a warehouse in the area that costs $120 million and employ over 600 workers. The city’s tech labour pool rose 17 per cent over five years, reaching 25,200 staff by 2019, fueled by companies like Jobber, Canadian Tire and Google’s DeepMind. While that’s small compared to Toronto’s 250,000 tech workers, data compiled by CBRE suggests Edmonton is punching well above its weight. The city now has more tech employees than Waterloo and its workers make more on average. Its tech talent pool is also growing at a faster rate than Halifax, Winnipeg, or Ottawa.
Davison referred questions on which technology companies the city gave incentives in the wake of the HQ2 bid to Edmonton Mayor Don Iveson. His office referred questions back to EEDC, which declined to answer them or provide an unredacted copy of its bid, saying that doing so “would explicitly or implicitly disclose third-party commercial or financial information that was supplied in confidence.”
In 2018, EEDC blocked the Edmonton Journal from obtaining a copy of the bid. The agency appeared to have been planning to keep its bid private forever. “Amazon Bid media requests to release confidential information will remain unanswered. The Committee supported Managements decision to honour agreements made with partners in Edmonton to keep this information private,” reads a package prepared for a March 2018 EEDC board meeting. Cities like Calgary, Toronto and Vancouver attracted significant media attention by making the details of their bids public. Toronto, the only Canadian city to make it to the shortlist of 20 regions, was widely praised for declining to offer Amazon any tax incentives.
The bid was a collaboration between the city, Edmonton International Airport (EIA), post-secondary institutions, service providers and real estate developers.
One strong theme in the city’s bid was its cost-effectiveness. “Edmonton’s talent is affordable. Amazon would save over $1.3 Billion per year in salary costs from operating 50,000 employees in Edmonton, rather than Seattle,” the proposal reads. “Health care alone would result in a saving of $600 million per year in Canada. Other benefits like pension and paid time off account for the other $300 million. All adding up to an annual savings of $2.2B”
Edmonton highlighted a number of other benefits if Amazon selected it, including over 635 kilometres of off-road cycling trails, strong universities, low taxes and “the lowest extra time spent travelling a day during rush hour periods of any major Canadian city.” The city also showed a willingness to launch new programs like “funding to invest in skills development projects for Amazon employees,” while the airport was “committed to attracting additional routes necessary for Amazon to succeed.”
EIA infrastructure vice-president Steve Maybee declined to comment on the Amazon bid, saying the airport “regularly works with municipal and industry stakeholders to attract air routes that support the Edmonton Metropolitan Region and Alberta more broadly. This includes supporting bids around investment attraction and development, tourism growth and major festivals or sporting events.”
The province of Alberta was also willing to roll out new initiatives for Amazon. “The government of Alberta is prepared to provide a full suite of targeted supports and incentives that relate directly to the key drivers important to Amazon’s HQ2 RFP, including: financial incentives, talent pool support, investment sustainability programs and innovation supports,” reads the bid. The province did not offer a set amount of money to Amazon, said Justin Brattinga, a spokesperson for Innovation Minister Doug Schweitzer.
“The list of incentives would have been further defined if the City of Edmonton had progressed through the selection process,” said Brattinga.
The province and city haven’t always worked hand-in-hand on attracting tech investment. In April 2019, the United Conservative Party defeated the NDP in the province’s election. In October of that year, Alberta cancelled five tech-focused tax credits. At that point there were about 400 tech firms in Edmonton, 44 per cent of which were recently created.
The province backpedaled in June, rolling out $175 million for its venture capital fund-of-funds and a new investment attraction agency—but not before Toronto-based publishing platform Wattpad passed over Calgary as a potential site for its second headquarters, citing those cuts and the threat of Wexit and opting to place it in Halifax instead. This month, the province announced a new cabinet minister tasked with fueling a tech-focused economic recovery and is currently looking for a CEO for the newly created Invest Alberta Corporation, which is going to set up offices in Toronto, Vancouver and internationally with the goal of bringing tech firms to the province.
Edmonton has also recently rolled out a new investment attraction agency for tech firms. In May, city council set aside $5 million a year for a new agency called Innovation Edmonton, which is tasked with streamlining support for entrepreneurs. The group has put together its board of directors and is currently looking for a CEO.
