Ontario government investing $30 million in Vector Institute to bring home Amazon HQ bid

Toronto skyline

At a Canadian Club speech this morning, Ontario Premier Kathleen Wynne’s business advisor and Vector Institute Chair Ed Clark detailed how the province is approaching its bid to bring Amazon headquarters to Ontario.

Clark said he was asked by the Premier to coordinate a bid over the past six weeks. As part of the bid, the government is hoping to foster more STEM talent. He announced that the province would increase the number of postsecondary students graduating in STEM disciplines by 25 percent over the next five years, boosting the number of STEM graduates from 40,000 to 50,000 per year.

“With this increase, based on today’s numbers, no state or province on the continent would produce more STEM graduates per capita than Ontario,” Clark said. “It’s a commitment that would more than match any increased demand for STEM grads that would occur if Amazon lands in Ontario.”

The government is also partnering with the Vector Institute to accelerate growth in professional applied masters’ graduates in artificial intelligence. Its goal is to graduate 1,000 applied masters students in AI-related fields per year, within five years.

The government is committing $30 million to the Vector Institute over the next three years as part of this goal; this number is in addition to the $50 million already committed to the Institute earlier this year. The $30 million will go towards helping the Vector Institute work with schools to create more AI specialists.

A key tenet of the province’s bid is talent, as Clark noted that the Ontario government’s fast-track Visa — which allows companies to hire talent in two weeks — could supplement any talent that Amazon is looking for. He also said the Startup Visa is part of this bid.

Amazon announced in early September that it was seeking RFPs from global jurisdictions for its second headquarters. Its plan is expected to create 50,000 jobs, and Amazon wants to invest more than $5 billion USD in construction and operation.

Noting the political instability of the US, Clark said that Canada’s high-quality, affordable talent, as well as an openness to immigrants should make it an attractive destination for Amazon.

“The plan is for 50,000 employees to occupy 8 million square feet of office space. If all that space is rented, real estate costs would be $500 million per year. Once you include property taxes and electricity costs. On the other hand, Amazon’s salary costs would be about $5 billion per year. Real estate is just 10 percent of Amazon’s expenses. The rest is the cost of talent,” Clark said.

“If you can offer Amazon talent at 30 percent less than it would pay in other big tech jurisdictions, the savings to the company are staggering: $1.5 billion dollars a year. As a businessman, that gets my attention.”

Clark said that the Ontario government — which planned a 12-year, $190 billion infrastructure investment in 2014 to build hospitals, highways, and schools — would be willing the timing of some projects if it would enhance the viability of a site for Amazon.

While the Vector Institute and STEM grad investments are in response to Amazon’s RFP, Clark said the province would move forward with the investments regardless of Amazon’s decision.

Asked if Amazon coming to Canada would make it difficult for startups to hire talent because of competitive salaries, Clark said it is a core question the government has thought about.

“Our answer was, why don’t we produce way more than what Amazon is going to need, and if we produce way more, we can leave that labour market undisturbed,” Clark said. “At the same time, if they don’t come, we actually fill a need that all these firms are scrambling for that say, ‘we’re finding it hard to find all the people we need,’ so why don’t we fill that need right away?”

This article was originally published by BetaKit