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.

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