OTTAWA DABBLES IN VENTURE CAPITALISM.
Dollars and share purchases promised
CALGARY • The government of Canada will play the role of venture capitalist and booster to clean technology companies with billions of dollars in funding and outright share purchases budgeted over the next several years.
Finance Minister Bill Morneau tabled the Liberal government’s budget Wednesday and l isted “clean technology” and “clean resources” as two of six “economic sectors where Canada will lead the way,” aided by money from Ottawa.
“By investing in clean technology and responsible resource development, we will preserve our environment f or f uture generations, create great jobs and re- stake our claim as a leading supplier of energy to the world for the next 150 years,” Morneau said.
For example, Ottawa will channel $1.4 billion through the Business Development Bank of Canada and Export Development Canada to make $380 million in equity investments in clean tech companies, boost the sector by making $ 570 million in working capital available and fund $ 450 million in new projects.
The government has also allocated $ 5 billion from its still- under- development Canada Infrastructure Bank for green energy infrastructure projects but did not specify what would qualify.
Canadian Electricity Association president and CEO Sergio Marchi said in a release that his group is looking for more details on how the bank “will help our members” deliver reliable energy.
Edmonton- based electricity economist David Gray, of Gray’s Energy Economics, said the best way to use that infrastructure money to boost renewable power generation in Canada is to build interconnections between provinces with hydro- electric dams, like B.C., Quebec and Newfoundland and labrador, and provinces with windmills like Alberta, Ontario and Nova Scotia.
He said hydro and wind energy are complementary sources of renewable energy and those electricity sources in different provinces could be paired together.
“To my mind, that’s probably the biggest nationbuilding exercise that they could go to and the one that would have the most longterm benefit,” Gray said. “I look to the government to undertake those projects that are either too uncertain or too long- term for the private market.”
He said it’s unclear at this point whether Ottawa’s other clean technology funding would have a real impact on green energy generation or if it would be “just window dressing.”
Executives at various clean- tech and electricity industry groups expressed their support for the funding announced in the budget and suggested it would have a real impact in developing a clean tech industry.
Canadian Solar Industries Association president and CEO John Gorman said in a release Thursday that the budget “is another early milestone in Canada’s transition to our cleaner energy future.”
He said the government’s decision to allocate $ 100 million to develop projects like energy storage, hightech “smart” grids for electricity and clean electricity demonstration projects “will support the transition to a cleaner, smarter” electricity network in Canada.
Ottawa has earmarked $ 14.5 million for a “clean tech data strategy,” which would measure the growth of the still- undefined clean tech sector in Canada and the effectiveness of funding the sector.
Marchi also said he was encouraged by the government’s funding for electric vehicle charging stations across the country, for supports for more renewable energy and for the government’s plan for $ 1 billion in an innovation and skills plan.
Morneau said the money allocated in his budget would have an effect. “It means that jobs installing solar cells, manufacturing electric cars, or developing cleaner fuels will be in high demand,” he said.