Amazon bid the wrong move for Toronto, tech investor says

Cities across North America are clamouring to be home to a new Amazon headquarters and Toronto is no exception.

The company's planned expansion could be a boon for any city, offering a five-billion dollar investment and jobs for 50-thousand staff. But Toronto venture-capitalist Anthony Lacavera says we shouldn't be falling over ourselves to make Amazon feel welcome. 

He spoke with Matt Galloway on CBC's Metro Morning.

Matt Galloway: Why in the face of people like the mayor John Tory, the mayor of Mississauga, the mayor of all sorts of other regions, should we say 'no' to Amazon North? 

Anthony Lacavera: On the surface it looks like a pretty good opportunity. The headline jobs numbers are obviously very attractive but it's important to dig a little bit deeper — and really look into what's really driving this? Amazon, Facebook, Google, Microsoft, they already tap us as customers. Our businesses and our consumers are all customers of those organizations and all they need to operate in Canada is an open Internet, which we offer in spades. So why do they want to build here? What's the motivation to build here? 

MG: What do you understand is the motivation to build here?

AL: The motivation to build here is to identify our top talent, hire them locally and then the ones that rise to the top transfer them to the headquarters in the U.S.

MG: People are focusing on the investment, an investment of something like $5 billion. I mentioned the 50,000 jobs. Isn't that worth serious consideration? 

AL: I think the short term headline jobs number is very attractive, which is why I think our elected officials are pursuing it. And I'm not opposed to any of those organizations, any of those big tech companies, including Amazon, locating here ... there's no issue with that, I'm all for fair and open competition. I'm highly opposed to using significant taxpayer incentives, additional dollars to roll out the red carpet for these companies, because we need those dollars to go into our burgeoning, emerging technology companies.

MG: You've said this could be a Trojan horse on our nation's future prosperity. What do you mean by that?

AL: That's exactly how I see it. The ancient Greeks used the Trojan horse to breech the city of Troy and destroy it and we need to recognize what the American tech giants coming up here really is. They're not up here for the benefit long-term of the Canadian economy and the Canadian people and welfare. They're up here for the benefit of their own shareholders and most of those shareholders, 99-plus per cent in the case of Google, Amazon, Facebook, are foreign shareholders, predominantly U.S.-based shareholders. 

MG: Do you really believe Amazon will come in and hoover up the best and the brightest and send them off to Seattle?

AL: I do. What our elected officials are saying is, "Amazon Canada is a great career path for you." I'd like to see our elected officials come to the support of homegrown businesses and entrepreneurs with the same enthusiasm and urgency that they are all chasing the Amazon pitches.

MG: We have this sector that's here already. Do we need to then instead focus our attention, and our money, on building that sector up? 

AL: Exactly. We house branch-plants. In the automotive industry it's Ford, GM, Chrysler, it's Japanese multinationals, but we don't build a Canadian car. 

MG: I've heard the same argument from Jim Balsillie on this program ... that we are becoming a branch-plant economy.

AL: We are a branch-plant economy and we're about to become a branch-plant economy of the technology sector. 

MG: How do we turn that around? 

AL: I think we've got to have our governments at all levels focused on supporting our homegrown technology sector and helping our technology businesses scale and export successfully and rise to global dominance. Shopify, Hootsuite, down the list, Thalmic Labs, all the great emerging Canadian technology companies that are reasonably well financed, that have had some success, that are already exporting. We've got to help those companies rise to global dominance so that we can become a real player in the technology industry long term. 

MG: Why doesn't that ring with elected officials?

AL: What people are failing to recognize is that the gravitas and vacuum created by the big U.S. technology giants is enough on its own. You don't need to help them. Enough young, bright Canadians are going to go work at Microsoft or Amazon or Google anyway. You don't need to be rolling out the red carpet and wooing them to come here with even bigger investments. 

This interview has been edited and condensed for clarity.