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Toronto loses Amazon HQ2 battle, claims victory with bid effort

Toronto loses Amazon HQ2 battle, claims victory with bid effort

TORONTO — The Toronto region may have lost the battle to host Amazon's highly coveted second corporate headquarters, but its leaders claimed victory in defeat.

Mayors of Toronto and its surrounding municipalities said the fact that their joint bid made the short list for the project dubbed HQ2 boosted the area's reputation as a burgeoning technology hub and has already drawn new business to the region.

The fact that Amazon opted on Tuesday to divide the headquarters and accompanying 50,000 jobs between New York City and Arlington, Va., they said, does not detract from Toronto's newly acquired international standing.

"Global businesses don't see municipal boundaries; instead they look to assets across an entire region to support their activities," the mayors and regional chair said in a statement. "Including the Toronto Region in the HQ2 competition shows that when we work together, we are of a scale that rivals the most competitive cities in North America."

The Toronto region's pitch, which billed the city and surrounding municipalities as a culturally diverse, safe and affordable hub for potential corporate growth, met much of Amazon's criteria.

The company indicated it wanted to locate near a metropolitan area with more than a million people; be able to attract top technical talent; be within 45 minutes of an international airport; have direct access to mass transit; and be able to expand that headquarters to more than 740,000 square metres in the next decade.

The municipal leaders said several companies have already seen the region's merits, saying companies including Samsung, CBS Television Studios and e-commerce giant Etsy have all announced projects in the area in recent months.

Toronto Global, the organization that co-ordinated the bid, said 36 companies have invested in the region since early 2017, citing names including Microsoft, Uber, Intel and Pinterest. 

"The HQ2 process was challenging and unique," Toronto Global said. "It offered us an opportunity to come together to highlight the region’s advantages ... we are an engine of top notch talent and commercial competitiveness."

Newly re-elected Toronto Mayor John Tory agreed, saying the city's strong performance in the competition represents a win.

"Our city is booming and this process has allowed us to tell that success story," he said. "There is no other place in North America which can boast all in one location the same talent, the same quality of life, the same vibrancy and economic strength."

David Wolfe, co-director of the Innovation Policy Lab at the University of Toronto's Munk School of Global Affairs and Public Policy, said Amazon's decision represents "the best of both worlds" for Toronto.

The city benefited from the publicity of mounting a well-regarded bid, but is now spared the stress of accommodating the massive project in a system not necessarily equipped to handle it, he said.

Wolfe said Toronto's overtaxed public transit system and highly competitive real estate market would be hard-pressed to withstand the influx of new residents a successful HQ2 bid would have entailed.

Amazon's decision to bypass Toronto, he said, also gives domestic businesses a fairer shake at a labour market that's already struggling to keep pace with recent growth.

"If you talk to domestic Canadian firms that are trying to grow and scale in the tech sector, they will tell you that pressure on the labour market is making things ... more difficult for them," Wolfe said. "To have accommodated Amazon on top of all that's already going on would have probably been really challenging."

Carl Rodrigues, CEO of Mississauga, Ont.-based mobile software company Soti Inc., agreed.

"If Amazon had selected Toronto as its HQ2, it would have soaked up the remaining talent, moving jobs away from Canadian companies," he said. "This would have made it next to impossible for our homegrown companies to compete."

The HQ2 decision ends an intense competition among 238 North American cities, many of which resorted to stunts to curry favour with the company. 

Calgary's irreverent campaign, for instance, dispatched spokespeople to Amazon's headquarters in Seattle to erect large banner that declared "we're not saying we'd fight a bear for you … but we totally would."

Winnipeg enlisted Blue Bomber football star Obby Khan and Mayor Brian Bowman in a promotional video featuring Amazon's voice-activated assistant Alexa.

Other Canadian competitors, such as the Ontario cities of Windsor and Sault Ste. Marie, mounted bids with sister cities in Michigan while talking up the potential advantages of cross-border flexibility.

Amazon made it clear, however, that financial incentives like tax breaks and grants would carry more weight. Toronto's bid did not contain any such measures, and the municipal leaders behind the effort indicated they were proud of the decision to "compete solely on the unique strengths of our region."

The company has been expanding its footprint in Canada — in July it announced a fulfilment centre in Ottawa and another in Caledon, Ont., that will bring more than 1,400 full-time jobs to Ontario. Amazon has nine warehouses in Canada and a technology hub in Vancouver that is undergoing an expansion.

Michelle McQuigge , The Canadian Press

Note to readers: This is a corrected story. An earlier version had an incorrect name for the company that co-ordinated the Toronto region's joint bid.