Clean tech sector employment continues to rise as revenues fall for first time: report

Mark Henderson
May 4, 2016

Canada needs to put a "substantial and rising" price on carbon, and rethink its innovation, regulation and green infrastructure policies, says a new annual report on Canada's clean tech industry. The 2016 Clean Technology Industry Report found that industry revenues declined for the first time in 2014, down 3% from the previous year to $11.63 billion, while employment increased 11% to 55,600 and R&D rose slightly to $1.2 billion.

That leaves Canada well behind the pack of global leaders at #11 in terms of overall trade and #19 when gauged by exports. The slowdown in growth places Canada's "fair share" portion of $50 billion in revenue by 2022 in jeopardy with a current "slow-growth" trajectory of just $18 billion.

"To reverse this trajectory and get back to the spectacular growth of previous years will require a price on carbon as well as a rethink of innovation, regulation and green infrastructure policies," states the report from Ottawa-based Analytica Advisors Inc.

The report — written subsequent to the COP21 Paris climate conference agreement and the Vancouver Declaration on Clean Growth and Climate Change — elicited a response from the federal ministers of innovation, environment and natural resources.

"The Government of Canada is already addressing many of the report's recommendations (and) will continue to support a clean growth economy that will help Canada take advantage of new global opportunities," stated the release, adding that the recent Budget supported commitments made at COP21 and Mission Innovation.

The report reiterates last year's concern that the majority of Canadian clean tech firms are at an initial scale-up stage but cannot find sufficient debt and project finance (R$, June 24/15).

"If anything the situation is even worse with regard to debt financing," it states. "There is increasing evidence that international institutions and venture debt providers are moving into this space to fill the gap."

Another ongoing concern is Canada's ability to benefit from the high levels of R&D spending incurred by domestic firms.

By investing in R&D rather than fixed assets that underpin their ability to deliver fully financed turnkey solutions, many comapnies are setting themselves up as "the classic takeover target for foreign-owned companies who can then profit from Canadian investments in innovation".

"The burning question is whether Canada can turn it around, grow market share and once again attain its fair share of global trade in clean technology?," states the report.

R$

Clean Tech Report 2016 Recommendations

Stimulate deployment of commercialized clean technology innovation with combined policy tools:

  1. Implementing a substantial and rising price on carbon;
  2. Implement regulation in selective industries based on performance standards and the concept of best available technology;
  3. Implement policy to enable greater access by innovators to public procurement as pathways to their participation in high visibility projects, including green infrastructure;
  4. Level the playing field with fiscal policy taking full account of treaty and G20 commitments.

Finance the deployment of clean technology innovation based on the following:

  1. Coordinate the formation of capital markets with the formation of markets;
  2. Stimulate consumer savings by enabling Canadians to buy government sponsored green bonds via the Low Carbon Trust Fund (LCTF);
  3. Deploy public capital to back-stop risk for buyers and sellers of clean innovation;

    • Back-stop risk born by buyers: Enable cities and provinces to share risk;
    • Back-stop risk born by sellers: Enable firms to share risk associated with selling projects through scaled up performance bonding and debt guarantees;
    • Financial innovation for climate finance: Deploy climate finance and overseas development assistance as a backstop to private capital.

Invest in the next generation of innovation by doubling current investments, doing so with the following two policy tests:

  1. What is the Canadian commercial capacity for new innovation investments?
  2. What are the global commercialization partnership opportunities?
Source: 2016 Canadian Clean Technology Industry Report, Analytica Advisors



Other News






Events For Leaders in
Science, Tech, Innovation, and Policy


Discuss and learn from those in the know at our virtual and in-person events.



See Upcoming Events










You have 0 free articles remaining.
Don't miss out - start your free trial today.

Start your FREE trial    Already a member? Log in






Top

By using this website, you agree to our use of cookies. We use cookies to provide you with a great experience and to help our website run effectively in accordance with our Privacy Policy and Terms of Service.