Ontario provides incentives for Ciena and Avaya to expand Ottawa operations

The Ontario government is providing $30 million through its Open Ontario strategy to two US-based firms to expand R&D operations in Canada and build on assets secured through through the dissolution of Nortel Networks Corp. The largest amount ($25 million) is being provided as a grant to Ciena Canada Inc, which has pledged to dramatically increase R&D operations in Ottawa. Avaya Canada Corp received $5 million last December to support expansion of its Ottawa and Belleville ON operations.

Ciena's US parent — Linthicum MD-based Ciena Corp — has pledged to spend $900 million in R&D over five years at its Ottawa-based facilities and add more than 350 new employees to its workforce of nearly 1,000, including 125 university graduates. In March/10, the firm finalized its acquisition of Nortel's Metro Ethernet Networks division for $772 million. Ottawa is the main location for Ciena's R&D activities, accounting for half of its global R&D staff and more than half of its R&D budget, which totaled $328 million in 2010.

Ciena has committed to remain in Ottawa despite plans to vacate the massive Nortel campus in 2015. The firm recently cut a $33.5-million deal with the campus's new owners — the Department of National Defence — to reduce its current lease from 10 years to five. Ciena has indicated it may consolidate its Nortel operations with a smaller lab it operates in suburban Ottawa.

Basking Ridge NJ-based Avaya Inc purchased Nortel's enterprise solutions division in late 2009 for $900 million and retained approximately 6,000 former Nortel employees. The Ontario government's $5-million grant is being leveraged with a $165 million commitment to expand its Canadian R&D capabilities. The work is aimed at technology that integrates voice, text and video communication. Avaya currently has about 21,000 employees (down from 34,000 when it spun off from Lucent Technologies in 2000).

Ontario's information and communications technology (ICT) sector employed approximately 284,000 people in 2008 with revenues of $28.4 billion. When the ICT supply chain is included, the number of firms grows to 16,000 with revenues of more than $75 billion. Ottawa has the province's highest concentration of telecom-related ICT and the government says it is committed to maintaining employment levels in the wake of the Nortel collapse and economic downturn.

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