Amazon wants a piece of city’s subsidies

How low would Winnipeg be willing to go?

As Sears sets to abandon the southwest wing of CF Polo Park, local politicians seek the attention of digital retail giant Amazon.

Amazon recently challenged North American cities to provide proposals explaining why they should be the location for Amazon’s second headquarter office (HQ2), after its primary Seattle HQ.

Ontario Premier Kathleen Wynne proposed a banker-backed bid for Ontario’s options. British Columbia’s government is contributing $50,000 to a campaign attempting to entice Amazon to extend its existing Vancouver campus into the HQ2.

Brian Pallister made a case for Winnipeg in a Sept. 9 press release.

"With our central location in North America, our transportation infrastructure, our well-educated workforce, our plentiful green energy and the lowest cost of doing business in the continent, Winnipeg is the best choice."

It’s no wonder why Pallister made sure to hit a “cost of doing business” talking point.

“The initial cost and ongoing cost of doing business are critical decision drivers,” according to Amazon’s HQ2 RFP (request for proposals).

But Winnipeg is not the best choice, according to tech magazine GeekWire. Winnipeg did not even make the list of 51 Amazon-primed cities that was topped by Toronto.

Winnipeg falls a few hundred thousand short of Amazon’s million-plus population preference. Nor does the city boast frequent flights to Seattle or forward-thinking public transportation.

But Mayor Brian Bowman also sees value in looking at an Amazon RFP (request for proposals).

"By partnering with the province and key stakeholders in the economic community, we will present a unified proposal for this significant opportunity," Bowman says.

Why?

Winnipeg’s relatively low real estate costs, non-emitting and renewable electricity and a geographical location at the longitudinal centre of Canada may slightly bemuse the jolly tech giant, but in order to strike that deal, Winnipeg would have to accept an uncomfortable compromise.

“In addition to being a huge commercial/industrial project offering, Amazon’s HQ2 invitation also amounts to one of the most aggressive public demands for corporate-welfare handouts in recorded history,” a Winnipeg Free Press editorial states.

The RFP specifically asks cities to lay out tax credits and exemptions that would be received by Amazon, a retailer that’s valued at more than $430 billion – twice as much as Wal-Mart.

Cal Harrison warns Winnipeggers, “don’t be fooled – the decision will be solely about money, just as it is in almost every other RFP,” he writes in the Winnipeg Free Press.

The language used in the RFP indicates that the chosen city could be a victim of a corporate tax compromise. Amazon points out that “for the state/province to achieve a competitive incentive proposal” it may require provisions of “special incentive legislation.”

In other words, Amazon wants to know where they can set up for the lowest possible cost to the company. In the process, it’s receiving shameless promotion clamoring for an Amazon concrete jungle to call their own.

On Sept. 30, The New York Times published “Dear Amazon: Please Build Here,” a collection of a dozen letters pleading cases that the corporate panopticon interpret big data in various metropolitan areas.

Sears’ separation from the Polo Park mall is more than symbolic as digital retailers like Amazon and Canadian retailer Shopify gain market share over their brick-and-mortar competition.

But that means the big-name digital retailers call the shots, and cities do the limbo until Amazon takes its best reasonable offer.

Published in Volume 72, Number 5 of The Uniter (October 5, 2017)

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