Amazon HQ2 could revolutionize Canada-US relations

  • National Newswatch

In the race to select a site for the new Amazon HQ2, Toronto has another distinct advantage over its nineteen contenders. Selecting Toronto has the potential to forever reshape the relationship between Canada and the United States.Amazon's bidding criteria has made it clear they are looking to leverage talent, public infrastructure, and an inclusive, business-friendly environment. Locating in Toronto will give Amazon, and other growing tech businesses, the opportunity to drastically reduce their carbon footprint and costs, while accessing the best talent region on the continent. But only with the Hyperloop.Hyperloop may sound like science fiction, but is closer than you realize. As soon as 2025. Hyperloop is a high-speed transportation concept proposed by Elon Musk, the founder Tesla, The Boring Company, and SpaceX. It moves passengers from place to place in vehicles that float above long tubes at near-supersonic speeds.In May 2016, Virgin Hyperloop One held a global challenge to find promising routes to connect cities and regions. Of the 2,600 teams that took part, Team HyperCan's proposal, a Canadian mega-region connecting Montreal, Ottawa, and Toronto and covering as much as a quarter of the country's population, was one of 10 finalists. At the 2018 Consumer Electronics Show, a passenger app was released to help people imagine this new travel experience. Consider the hour-long commute to Toronto from Oshawa or Waterloo, but from Chicago or Montreal instead. In fact, that commute to Toronto by Hyperloop could be the reality for half of the cities shortlisted by Amazon.For a century, the Great Lakes region of Canada and the United States has been home to a bustling automotive industry. It is now impossible to distinguish if a vehicle is “American made” as they cross the border seven times during manufacturing and assembly. This region is already deeply connected economically and socially. A Toronto-centred hyperloop-connected Amazon HQ2 brings something unexpected that the other regions simply cannot: much-needed revitalization between Detroit and Buffalo, something President Trump has been seeking. This connectivity would allow both of our economies to grow based on 21st century assets: human capital and data.The Great Lakes mega-region has a population expected to reach 65 million by 2025. That's almost twice the entire population of Canada today. The logic for choosing Toronto for Amazon's HQ2 is clear – there is no other region in North America with so much talent. Now we just need the infrastructure to ensure that talent can be mobile so 50,000 jobs won't flood a single market, but instead spread growth across dozens of communities.Is Toronto good enough for Amazon on it's own? Maybe. The CBRE Real Estate Group named Toronto the fastest-growing tech market, with 212,000 technology workers. 22,500 of those jobs came in the last two years alone. That's more than New York City and the Silicon Valley combined. As well, more than 60% of Canadians aged 25 to 34 hold university degrees, compared to less than 48% in the United States. Toronto boasts three world-class universities: U of T, York and Ryerson; and is within 100 km of the University of Waterloo in the west, one of the top producers of technology talent in the world, and the rapidly growing UOIT in the east.This incredible talent pool alone is one of the reasons why Toronto didn't include a single tax subsidy in its pitch to Amazon. Richard Florida, professor and head of the Martin Prosperity Institute at the Rotman School of Management at the University of Toronto calls for a truce in the HQ2 bidding war. He referred to the tax incentives offered in other bids as “often wasteful and counterproductive” and called for a cooperative approach to attracting the headquarters.The Government of Ontario recently invested $15 million into a study for a high-speed rail corridor between Toronto and Windsor. But China, Japan and South Korea have already rendered high-speed rail obsolete. We can't attract future-thinking companies like Amazon if we just keep investing in antiquated infrastructure.The time for a game-changing investment into hyperloop is now. It won't just strengthen our economy, it will solidify our relationship with our closest ally and trade partner, the United States. If Amazon can resist the billions of dollars worth of tax incentives on offer, it may save NAFTA and secure Canada-US relations for the next century.Tammy Johns is the founder of Strategy & Talent and a Harvard Business Review author. Lenny Mendonca is Chairman of New America and Senior Partner Emeritus at McKinsey & Company.