Why Toronto Made ‘the Playoffs’ for Amazon’s Headquarters

Posted January 18, 2018 9:12 p.m. EST

OTTAWA, Ontario — The mayor of the only non-U.S. city on the list of 20 finalists for Amazon’s second headquarters displayed some typical Canadian modesty on Thursday. Toronto, John Tory said, had only “made the playoffs.”

But regardless of the outcome, the announcement that the city remains a contender showed how much progress Toronto, and the surrounding region, have made in establishing themselves as a major technology center.

Nine communities in the Toronto region put forward a joint bid for the headquarters. Those towns are already home to a major Google engineering operation, a major artificial intelligence research center and a quantum computing institute.

General Motors is adding about 1,000 software engineers to the area who will, among other things, develop systems for self-driving cars, and Thomson Reuters has made Toronto a technology hub, a move that could create 1,500 jobs. And a unit of Google’s parent company, Alphabet, is developing plans to turn a derelict portion of Toronto’s waterfront into a high-tech city of the future.

Amazon offered few details on Thursday about how it had come up with its 20 finalists. Unlike several other finalists, the region offered no tax or other incentives. But Tory said he believed that the area had two important virtues.

One is Canada’s immigration policy. Tory said that when he was recently in New York, he found a great deal of interest among U.S. executives in Canada’s relatively new immigration program that gives visas to certain skilled workers within two weeks. That is lightspeed compared with the complicated American system. And unlike the United States, Canada does not limit how many of those visas can be issued each year.

In sharp contrast to President Donald Trump’s efforts to limit the entry of people from some predominantly Muslim countries into the United States, Prime Minister Justin Trudeau has repeatedly emphasized that Canada is open to people of all religions and backgrounds.

“We’re able to attract the best and the brightest from around the world,” Tory said.

Toronto’s second asset, he said, is its publicly funded university and college system. The University of Waterloo has long been recognized as one of North America’s top technology schools, and the University of Toronto is a major center for research in artificial intelligence. As part of the area’s Amazon pitch, the province of Ontario has increased funding for artificial intelligence programs at its universities by 30 million Canadian dollars (about $24 million).

“We have a talent pool, and we have the educational policies to make sure the pipeline is full,” Tory said.

But the Toronto area also has a potentially unattractive feature: ever-escalating prices both for homes and for commercial real estate. Its bid proposes several potential sites for Amazon’s second headquarters, among them the largely abandoned docklands that include the Google-related redevelopment plan.

Frank Scarpitti, the mayor of Markham, Ontario, which is already home to operations of IBM and the chipmaker AMD, dismissed the idea that land and housing prices could be a deal breaker. He noted that several other finalists, including New York, had similar or higher costs.

Soon after the announcement, Kathleen Wynne, the premier of Ontario, appointed Ed Clark, the former president and chief executive of the Toronto-Dominion Bank, to coordinate the province’s reply.

Tory said the cities would probably have to wait for Amazon’s next move before taking any action of their own.

“We don’t know what they’re expecting from us,” he said. “There has been no playbook or playoff schedule supplied to the 20 finalists.”