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Amazon’s new Ontario fulfillment centre could hinder chances for Toronto landing HQ2

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Erin Davis Aug 02, 2018 11:54 am 716

For months now, Torontonians have waited with anticipation to hear whether the city they call home will be the location of the second Amazon headquarters, Amazon HQ2.

Depending on who you ask, its potential arrival could be a good or bad thing for the city. On the negative, it could put pressure on an already dense city and an already fragile and insanely competitive rental market. It could also hamper our local tech startups by taking away talent from them.

On the positive, it would mean a $5 billion investment and 50,000 jobs for the city. It would also put Toronto on the map to a global audience like never before.

Either way, Toronto is now the lone Canadian city still in contention to house the headquarters. The company said it would announce the location sometime this year, but has remained vague (i.e. radio silent) as to when.

In most recent Amazon news concerning our home and native land, last week, it was announced that Caledon, Ontario will open a new one-million square foot fulfillment centre, creating 800 new jobs in the process. The main function of this spot will be to pick, pack, and ship product. The centre will be Amazon’s sixth facility in Ontario and the ninth in Canada, and is slated for completion by the end of 2019.

But does this new centre help or hinder our chances of becoming home to HQ2, now that we have so many centres already?

For those rooting for Toronto in the Amazon HQ2 game, this may be viewed as a positive thing – if they are investing heavily in Ontario, it could mean that Toronto is still very much in the running.

But it’s also reasonable to wonder whether this shiny new centre – and the opportunities it will bring to Caledon, which sits about an hour north of Toronto – is a consolation prize for losing HQ2. Let’s not forget that Amazon announced earlier this spring that it would expand its Vancouver location to some 3,000 employees, potentially decreasing the likelihood that it would choose another major Canadian city to call home.

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Stephane Legrand/Shutterstock

Though a study released in May ranked Toronto as one of the top cities to land the coveted new headquarters, the city may have big strikes against it when it comes to the final decision.

There some important factors that may deter the company from setting up shop in Toronto. Most notably, the city’s transportation system, which most of us can agree leaves a lot to be desired and is a source of daily frustration. As mentioned, our housing market isn’t exactly the most attractive either – for both potential owners and renters.

Helping Toronto’s cause, however, is Donald Trump, who has repeatedly slammed the company via the medium he knows and loves best, Twitter, claiming that Amazon doesn’t pay adequate taxes to state and local governments, costs the country’s postal service billions, and puts retailers out of business.

Also helping Toronto’s cause is the fact that a new report from real estate services company CBRE ranked Toronto as number 4 for tech talent out of 50 cities in the US and Canada. With the arrival of Google’s new Canadian headquarters, the conversation-provoking sister company Sidewalk Labs, however, there is always the chance that the competitive folks at Amazon won’t want to share Toronto and its tech talent with another massive tech leader.

The only city that outranks Toronto in the tech department is Washington, and there have been a few hints that the US capital could become the chosen home of Amazon HQ2.

In a recent job posting that has since disappeared, Amazon announced a position for an economic developer in Washington, seeking someone with at least eight years of experience in economic development. No other contending city has seen a similar posting, however, Amazon has claimed that it is unrelated to HQ2.

As of now, it’s simply become a waiting game.

Whether the Amazon centre in Caledon is a consolation prize for losing out on the big HQ2 remains to be seen.

If nothing else, it’s at least a win for Caledon.

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Erin Davis

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