The e-commerce giant is seeking incentives from both state and local governments
Apparently, every city is willing to do all it takes to be the home of Amazon's newest headquarters in North America, University of Toronto's Rotman School of Management associate professor Walid Hejazi said in a report by the Financial Post.
The question, however, remains: Will Canada be able to give what Amazon demands?
Last week, the e-commerce giant announced that it will be spending US$5 billion in building a second headquarters in North America which will eventually house over 50,000 workers.
Amazon laid out its demands to the cities who might be interested in opening their doors for the group. The firm wants a massive 500,000 square feet of space by 2019, with a total site space reaching up to 8 million square feet. Not only that, Amazon also seeks incentives from both state and local governments, which could include free land costs, grants, and tax credits.
“Amazon is in a very, very strong bargaining position,” Hejazi said, noting that Amazon still wants to avoid embittering its prospective host with excessive demands.
However, history showed that Canadian governments are willing to empty their pockets for such huge investments. The federal government and Ontario each granted Ford Motor conditional grants of around US$102.4 million as part of a $1 billion deal to help boost funding for the firm's research and development facilities.
Officials from several local governments, including those from Montreal, Toronto, Ottawa, Calgary, Edmonton, Vancouver, Halifax and Kitchener-Waterloo, have already expressed their interest to host Amazon's new HQ.
Senior lecturer at the Harvard University and Cato Institute economic studies director Jeffrey Miron said those vying to win Amazon may be better off cutting taxes. He explained that governments would have to more or less vow not to levy any significant business taxes like corporate income taxes.
"Because that’s basically what the kind of deals that other big manufacturers have gotten from certain cities, is to really get out from under the vast majority of standard business income taxes," he told the Financial Post.
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The question, however, remains: Will Canada be able to give what Amazon demands?
Last week, the e-commerce giant announced that it will be spending US$5 billion in building a second headquarters in North America which will eventually house over 50,000 workers.
Amazon laid out its demands to the cities who might be interested in opening their doors for the group. The firm wants a massive 500,000 square feet of space by 2019, with a total site space reaching up to 8 million square feet. Not only that, Amazon also seeks incentives from both state and local governments, which could include free land costs, grants, and tax credits.
“Amazon is in a very, very strong bargaining position,” Hejazi said, noting that Amazon still wants to avoid embittering its prospective host with excessive demands.
However, history showed that Canadian governments are willing to empty their pockets for such huge investments. The federal government and Ontario each granted Ford Motor conditional grants of around US$102.4 million as part of a $1 billion deal to help boost funding for the firm's research and development facilities.
Officials from several local governments, including those from Montreal, Toronto, Ottawa, Calgary, Edmonton, Vancouver, Halifax and Kitchener-Waterloo, have already expressed their interest to host Amazon's new HQ.
Senior lecturer at the Harvard University and Cato Institute economic studies director Jeffrey Miron said those vying to win Amazon may be better off cutting taxes. He explained that governments would have to more or less vow not to levy any significant business taxes like corporate income taxes.
"Because that’s basically what the kind of deals that other big manufacturers have gotten from certain cities, is to really get out from under the vast majority of standard business income taxes," he told the Financial Post.
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