It might be a “tasty morsel” — in Mayor Don Iveson’s words — but Edmonton should steer clear of the bidding war sure to break out around Amazon’s proposed $5-billion second headquarters, says the city economist.
The American online giant issued a request for proposals Thursday, setting off a media frenzy as cities across the continent took notice.
Edmonton would love to land those 50,000 jobs, said Iveson. Calgary Mayor Naheed Nenshi said the same thing. Alberta Economic Development Minister Deron Bilous said the province is already working to lure Amazon here.
Economist John Rose sounded frustrated Friday: “Oh gosh. I spent a lot of my career consulting to regions and municipal governments about economic development issues and it always upsets me when a firm goes out and gets cities into a bidding war.”
“There’s going to be someone out there who is going to lowball us, no matter what. Particularly when it’s a high-profile company splashing about big numbers,” Rose said.
“It’s just a race to the bottom.”
So far, Alberta’s big-city mayors have been careful to stress they’re not interested in major tax concessions and highlighted the strengths of both cities’ economies. Edmonton has global experts in machine-learning technology at the University of Alberta and top-notch graduates. It also has multiple direct flights a day to Seattle, Amazon’s headquarters.
But before anyone gets their hopes up, they need to know these companies often try to extract billions in tax concessions from a hosting municipality, Rose said. “It’s a bit of a mug’s game.”
Rose weighed in while sharing Edmonton’s latest employment statistics, which showed an increase in jobs, but an even larger increase in people looking for work.
The Edmonton region added 2,000 full-time jobs last month. But its unemployment rate is now at 8.7 per cent, according to Statistics Canada’s labour force survey, a monthly telephone survey of more than 60,000 households nationally.
That’s up from 8.5 per cent in July, and 7.9 per cent a year previous.
Rose said what’s happened is that people are seeing more jobs on the market and are starting to actively look for work again. The city is also continuing to see people move here as permanent residents from overseas.
Edmonton really started to feel the economic downturn in May 2016, when its economy lost jobs overall and many people were laid off. By that fall, the situation was so bad many of those people simply stopped looking, Rose said. But early this year, things turned around in the energy and manufacturing sector.
Even though oil prices have stayed around $50 a barrel, energy companies have started at least deferred maintenance and small expansions again, said Rose. That’s meant, since this time last year, Edmonton has actually added 10,000 jobs.
But since 17,000 people joined the active labour force in the same time, things are still tight for those searching for work.
“We’re not generating enough jobs to employ them all,” said Rose.
That’s what makes Amazon’s offer so tempting.