With the location of Amazon’s new headquarters – or HQ2 – still a mystery to this point, the company is continuing to expand its reach in North America as Amazon plans to build a new warehouse in Ottawa, Ontario.
A New Warehouse in Canada
On Tuesday, Amazon formally announced that it will open up a new warehouse distribution center in Ottawa, a city in Ontario and the capital of Canada. The news comes as Amazon continues to expand its reach worldwide and is still considering Toronto as a candidate for HQ2.
Here’s the announcement from Ottawa mayor Jim Watson, according to Global News:
“We have been working on this project with Amazon for a number of months and we’re thrilled with the over 600 permanent jobs that will be created in the city’s east-end,” Watson said.
And here are some of the details courtesy of CBC:
Once the new one-million-square-foot facility is built, it will employ more than 600 people full-time, according to Amazon, and become a hub for shipping large items such as household furniture, sporting equipment and gardening tools.
The distribution centre will be the eighth of its kind in Canada, but different than other facilities in the country that mostly pack and ship smaller items.
Logistical Issues in Ottawa
Interestingly, there were some financial complications involving the city of Ottawa that got some locals upset.
Here’s what Ottawa Citizen had to say about it:
The city has agreed to let Broccolini defer $8,034,164 in municipal development charge payments until the warehouse is built. In a rare move, council on Wednesday will be asked to waive $803,416 in interest on the development charge deferral.
Ontario cities don’t have many financial tools to woo large employers because of provincial laws that prevent sweetheart deals with the private sector.
Mayor Jim Watson said the interest waiver would be allowed under the Ontario Municipal Act, which bans municipalities from providing corporate bonuses, like fee breaks.
In this case, the city would be getting a service in return — water mains, natural gas lines, hydro infrastructure and road work — from Broccolini in exchange for the waived interest fees.
City officials have stated that they see this building plan is an investment with Amazon. And not just with Amazon, but with other companies too.
The city could be setting a precedent for dishing out sweet deals to developers, according to Coun. Tobi Nussbaum, who pointed out Amazon made $51 billion in net sales in the first quarter of 2018.
That would especially be the case if positive relations with folks in Ontario means Amazon is more inclined to select Toronto as its city for HQ2. We’ll get to more on that in a bit.
Regardless of the potential logistical roadblocks, the fulfillment center is on the way and should be ready to go by the tail end of next year.
What’s the Benefit for Sellers?
The warehouse is expected to be operational in the latter half of 2019. Because of that, sellers will not see immediate benefits from the facility. However, sellers would be wise to use this time to prepare for its arrival. There are still a lot of steps going forward that need to be completed before sellers will start to see the benefits of this new facility.
The new warehouse is primarily going to focus on larger products, such as, “household decor, sporting equipment and gardening tools,” according to the Financial Times. Most warehouses account for smaller items, so this particular facility is slightly different and would be tailored towards different sellers.
The new distribution centers will allow Amazon and its sellers to store more of their products in Ontario, by far Canada’s most populous province. That will open up lot of opportunities for sellers for obvious reasons; more reach to more people in heavily populated regions can only be good for Amazon sellers.
The new warehouse will provide a lot of jobs that will certainly help people in the region and grow Amazon’s brand in another arena. Amazon’s arrival always means more jobs for an area, which creates more goodwill between Amazon and the town that its warehouses are in. People who hold Amazon in a positive light are more likely to buy products from the company as well.
How Does This Impact HQ2?
Many people will read into this news with HQ2 in mind. Amazon is still searching for the location of its second headquarters, which is expected to rival Seattle’s campus in both size and production. There are 20 cities included in the final list, but Toronto is the lone Canadian representative.
Toronto is in the same province as the new Ottawa warehouse and is only a four-hour drive away. The takeaways are fairly obvious: Amazon is trying to expand its reach in Canada. However, Amazon would be wise to create this warehouse regardless of whether or not HQ2 ends up in Toronto. The warehouse would likely be more of an expansion of HQ2 and would be utilized a lot more if the campus winds up in the Canadian province, but even if HQ2 ends up in any of the American cities, Amazon’s expansion into Canada is an obvious benefit for the company.
Folks will continue to search for hints in the HQ2 sweepstakes. However, this news should go to show that Amazon will continue to expand into all cities and regions, even if the secondary headquarters doesn’t wind up in the city that some may want it to. Amazon is a growing company, and it will likely venture into spaces people never thought possible, even if that means it has to go to the moon!
Amazon’s New Warehouse in Ottawa, Ontario
Anders is a content creator for Rosenbaum Famularo, P.C., the law firm behind AmazonSellersLawyer.com. Anders will be earning his degree in journalism from Hofstra and has five years of professional journalism experience. He has written for numerous online and print publications including SB Nation and The Hofstra Chronicle.