The impacts of climate change have never been more apparent, with increasing events of extreme heat waves, droughts, intense storms, flooding, and rising sea levels. In the latest climate change report from IPCC, the link between human activities and climate change was clearly established in which the IPCC found that over 90% of the average warming (1.1 deg C) over pre-industrial levels was caused by human-caused emissions such as fossil fuel burnings and deforestation.
In the 2015 Paris Agreement for combatting climate change, Canada has committed to a 30% reduction in greenhouse gas (GHG) emissions from all sources from 2005 levels by the year 2030. In the most recent federal elections, climate change was at the forefront with the elected Liberal Party pledging to further raise the target emission reductions to 40-45%. As part of achieving this goal, the development of innovative technologies directed towards net-zero energy transition, plastic waste elimination, and low-carbon solutions is critical.
1: Clean Tech in Canada by the Years
2008-2010: Companies in the Clean Tech sector invested almost $2 billion in research and development efforts. Around this time, an 11% employment growth was noted.
2012: Based on the report from the Canadian Energy Centre,major operators in the oil sands industry increased their annual investment on research and development by ~150%, collectively spending more than $1 billion in R&D projects which was reflected in the environmental, social, and governance performance of the industry.
2014: Clean Tech was considered as one of the fastest-growing industries in Canada, consisting of approximately 700 companies, 41,000 jobs, and $1.13 billion in annual revenues. In this year, Canada was ranked 7th in the Global Clean Tech Innovation Index.
2015-2017: Clean Tech continued to grow as demonstrated by the increase in Clean Tech developers and producers to 850 in 2015. However, the sector did not see accelerated adoption across a wide range of industries. It has been reported that between 2015-2017, on average, only 1 in 10 enterprises used Clean Tech services and goods, although Pipeline transportation and Utilities industries reported higher usage rates as compared to other industries.
2020: COVID-19 negatively impacted the acceleration of the Clean Tech industry, where the effects were especially noted in the oil and gas sector. To help the sector rebound, the Government of Canada announced a $100 million investment to facilitate development of technologies to reduce the environmental impacts of the oil and gas industry.
2021: Canada jumped to 2nd in the Global Cleantech Innovation Index, with 11% of the total companies that were recognized to provide significant impact on the Clean Tech industry over the next 5-10 years. Further demonstrating the rising trend in Clean Tech adoption is the 335% increase in equity financings in Clean Tech and renewable energy companies for the first half of 2021. In the second half of 2021, talks of development of at least two new massive carbon capture projects in Canada by 2030 as part of the carbon capture, utilization and storage (CCUS) strategy were reported.
2: Clean Tech in Canada by the Numbers
Technology Type Distribution
In the Policy Brief regarding investment in Clean Energy technology prepared by Ivey Business School, they identified eight different types of technology that the participating Clean Tech firms were active in.
As seen in the chart above, renewable power generation technology (39%) leads the other technology types. The firms active in this technology type are mostly operated in the Ontario province. The renewable power generation is followed by the Hydrogen fuel cell technology (12%), where majority of the businesses operate in British Columbia. Energy storage technology comes close after Hydrogen fuel cells (11%), where the active firms in this technology space are also in based in Ontario.
Based on the Statistics Canada report on the impacts of environmental and clean technology products on the 2019 economy, 3.0% of Canadian GDP was attributed to the environmental and clean technology products sector. 53.7% of the national GDP from environmental and clean technology products came from the value of environmental goods and services, whereas the remaining 46.3% came from the production of clean technology goods and services. Ontario led the share of the contributors to the sector, making up 36.1% of the total value of the products, followed by Quebec (28.6%) and British Columbia (14.4%).
In terms of exports, the value of environmental and clean technology product exports totaled 2.0% of the total Canadian exports, with 78.8% coming from clean technology products (mostly manufactured goods) and 15.1% attributed to clean electricity exports.
From the same Statistics Canada report, the following are the distribution of jobs in different environmental and clean technology sub-sectors.
The utilities sub-sector accounted for the largest job distribution (22%), where the jobs were primarily in electric power generation, transmission and distribution. Following this sub-sector was the engineering construction sub-sector which made up 18.9% of the jobs, with 60% of jobs in this sub-sector related to electric power engineering.
In May 2021, the federal government announced investments of $44.3 million in 11 Clean Tech companies across Canada as part of its ongoing efforts to strengthen Canada’s commitment to a clean growth future.
Ontario-based company, Molded Precision Components, was awarded the highest funding ($9.3 million) for its Pellet-to-Pallet Green Advanced Manufacturing of Plastics initiative. Terramera, a Vancouver-based sustainable agriculture company, will receive $7.9 million to facilitate development of a soil carbon validation tool. Another Vancouver-based company, Axine Water Technologies Inc., was awarded funding ($6.2 million) for a second generation, digitized wastewater treatment system.
3: Clean Tech Funding for Canadian companies
The government is bolstering its commitment to support companies involved in the Clean Tech space through funding initiatives that tackle the challenges of reducing GHG emissions and the impacts of energy sourcing as well as implementing sustainability practices. The Clean Growth Hub is a free service provided by the Government of Canada to connect Clean Tech companies with federal programs and services related to Clean Tech development. There is a wide range of funding opportunities for various needs of a Clean Tech company: research & development, overall growth, technology export, adoption of market-ready products, wage subsidies, and general innovation measures.
With the recent developments showing increased government support and financing opportunities as well as the growing number of companies in the Clean Tech space, it is clear that Canada is on track to become a global Clean Tech leader. Canadian companies can offset the costs of innovating through various non-dilutive funding programs aimed at strengthening the Clean Tech sector:
- Scientific Research and Experimental Development (SR&ED) tax credits
- Energy Innovation Program (EIP)
- Agricultural Clean Technology Program
- Indigenous Forestry Initiative
- Clean Fuels Fund: Building New Domestic Production Capacity
- Canadian Technology Accelerator
For more information on funding programs to accelerate your company’s innovation and growth efforts, contact us to speak with one of our funding advisors.