Alberta’s government has issued pointed criticism of a tech company that picked Halifax over Calgary over concerns about provincial tax policy and Wexit.
“It is clear that Wattpad was looking for government handouts in order to establish an office,” said Justin Brattinga, press secretary for Economic Development Minister Tanya Fir. “We are making Alberta the best place to invest through the creation of broad-based supports, not cutting corporate welfare cheques to companies.”
Asked if he’s concerned other firms will stay away from Calgary, Premier Jason Kenney said, “No, I can tell you I’m in constant investment promotion mode, and I’ve heard that from absolutely no one, on Wall Street, Bay Street, Houston or Europe.”
On Monday, The Logicreported that Toronto-based storytelling platform Wattpad had chosen Nova Scotia over Alberta as the site of its second headquarters. In a written statement to Calgary Economic Development (CED), the company cited its concerns over separatist sentiment in the province and cuts to tax credits for tech firms. On Tuesday, Calgary Mayor Naheed Nenshi took aim at the provincial government, saying the removal of the tax credits had inhibited the growth of Calgary’s “great tech ecosystem.”
“The now-removed tax credits would have given tech companies, video game companies, and other innovators some breathing room as they got set up and invested in our city and our people,” Nenshi told The Logic.
He also addressed the issue of the Wexit separatist movement that Wattpad had cited in its statement to CED. “We have heard concerns from some business owners questioning if moving to a place where everything is confrontational right now is the right move for their companies,” Nenshi said. “We have to articulate Calgary’s desire to be included in the national discussion without stoking division between ourselves and the rest of Canada.”
Asked for comment again Tuesday, Wattpad did not directly reply to the Alberta government’s criticism, nor did it answer questions about the concerns it shared with CED.
The now-removed tax credits would have given tech companies, video game companies, and other innovators some breathing room
Calgary Mayor Naheed Nenshi
“Like any company opening an office in a new city, in the course of meeting with different cities we were made aware of the Provincial and Federal programs available in each location,” said Wattpad spokesperson Kiel Hume.
Asked how the incentives offered by Halifax compared with those offered by Calgary, Hume said, “We do not have any comment on specific programs we hope to access in the future.”
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Alberta Premier Jason Kenney has eliminated a number of government programs for tech firms, including a $5-million tax credit for capital investment and credits for scientific research and economic development as well as interactive digital media. The province also cut $129.7 million from the budget of Alberta Innovates, a startup-support organization.
CED CEO Mary Moran said two weeks ago that an unidentified 1,000-person firm had cited Wexit for not setting up shop in Calgary. The agency declined to comment Tuesday.
Though Moran had cited a higher figure, Wattpad, which has over 80 million monthly users and was valued at about US$398 million in a January 2018 round, currently has fewer than 200 employees. It had sought proposals from cities interested in hosting its second headquarters. Hume told The Logic Tuesday the company was looking for a city that was a two- to three-hour flight from Toronto; Calgary is about a four-hour flight. Hume did not directly answer questions about why the city was being considered.
Kenney also said the proximity to Toronto was an issue: “The reality is that they said they wanted to be within three hours of Toronto. We can’t move Calgary an hour to the east.”
For his part, Nenshi wants the province to do more to attract tech firms, pointing out that the Halifax bid included the city, a university, a local incubator and the province’s business development agency.
“In Calgary, we too often are missing one partner in that team approach. We look forward to working more closely with the Government of Alberta in attracting and retaining investment and growing jobs,” he said.
With files from Murad Hemmadi in Ottawa