Canada’s government threatened to review its cloud computing contracts with Amazon.com Inc (Nasdaq: AMZN) after the e-commerce giant announced plans to close its Quebec warehouses, prompting concerns about the company’s commitment to the Canadian market.
Industry Minister Francois-Philippe Champagne sent a strongly worded letter to Amazon CEO Andy Jassy on Tuesday, warning that the closure decision would trigger a review of Ottawa’s business relationship with Amazon Web Services, which has secured more than $50 million in federal contracts since 2020.
“Yesterday’s decision is inconsistent with your expressed interest in being a leader and strategic partner within Canada’s industrial economy,” Champagne wrote to Jassy, noting the move would affect thousands of Quebec workers and undermine Amazon’s stated goal of being “Earth’s best employer.”
Amazon plans to shut down its Quebec-based distribution centers over the next two months, shifting to a third-party delivery model in the province. While local labor organizations suggested the closures were linked to unionization efforts, Amazon denied these claims, stating the decision followed an operational review.
The minister emphasized Quebec’s strategic importance, pointing out that Amazon’s distribution centers there serve as crucial hubs for the company’s Canadian supply chain. The facilities currently employ thousands and have required significant infrastructure investment.
AWS, Amazon’s cloud computing division, maintains extensive relationships with Canadian public institutions, serving 6,500 public-sector organizations according to company data. This relationship now faces scrutiny as Champagne invited Jassy to “discuss this matter further.”
“You will undoubtedly understand that such action calls for a review of the business relationship that exists between Amazon and the Government of Canada,” Champagne wrote, suggesting Amazon has benefited significantly from its Canadian operations.
Information for this story was found via the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
