Ontario Liberals give Open Text Corp. $120M grant
Premier Kathleen Wynne said the grant would help create 1,200 jobs as the Waterloo-based software firm expands in Ontario
TORONTO—Ontario’s Liberal government is giving a $120-million grant to Waterloo-based Open Text Corp., Canada’s largest software company.
Premier Kathleen Wynne said the grant will help create as many as 1,200 “well paying” jobs as Open Text invests $2 billion to expand its operations in Toronto, Peterborough, Kingston, Ottawa and Waterloo over the next seven years.
(That’s $100,000 per employee, if anyone’s counting. Well paying indeed.)
The investment by Open Text will bolster Ontario’s position as North America’s second biggest centre for information and communications technology, behind California and ahead of Texas, Wynne added after touring the company’s facilities in Waterloo.
Open Text, which started as a technology spin-off from the University of Waterloo in 1991 with four employees, now has more than 8,000 workers worldwide. The company net earnings of $45.8 million for the three months ended March 31 soared on revenue of $442.8 million.
Over the past seven years, annual revenues at Open Text have grown nearly 130 per cent to $1.36 billion. Shares of the company have strengthened as well, rising more than 160 per cent over the past five years.
“We are an Ontario-grown global company and we chose to invest here because of the highly educated workforce, our strong university partnerships in R-&-D, as well as the province’s robust and innovative start-up communities,” said Open Text president and CEO Mark Barrenechea.
Getting provincial money was a key factor in the company’s decision to expand in Ontario, added Barrenechea.
Progressive Conservative Leader Tim Hudak said he would stop giving money to corporations and instead would cut taxes for all businesses, not just big companies with well connected lobbyists.
“So let’s replace the handout business, the $2 billion in corporate welfare, and use that money to give lower and fair taxes for all businesses to succeed,” Hudak said at a Toronto factory.
“Small, medium-sized businesses don’t get the handouts, they get stuck with the bill.”
Last December, Wynne announced Ontario was giving another IT giant, Cisco Canada, $220 million to help create up to 1,700 new jobs in the province.
Economic Development Minister Eric Hoskins said companies like Cisco and Open Text are “courted daily by presidents and senators” who want investments and jobs in their communities, so he “aggressively” pursued Open Text when he heard they were looking to expand.
“Unlike the Conservatives, who would have us stand aside when these opportunities come up, we believe that we do need to compete,” Hoskins said in an interview.
Ontario gets more than 90 per cent of its foreign investment without using taxpayers’ money as an incentive, but the Liberal government is looking to partner with companies to attract more investment capital, especially with high-growth firms like Open Text, added Hoskins.
“We feel that it’s important in terms of not just job growth, but also strengthening and anchoring even further that great high-tech cluster that we’ve got in the province,” he said. “This was an investment worth making.”
Open Text sells software and data management technology used by companies to protect their electronic documents. It has been rapidly expanding over the past few years with the acquisition of several companies involved in e-learning.
With files from David Friend.