Canada’s clean-tech sec­tor strug­gling: re­port

Times Colonist - - Business - MIA RABSON

OT­TAWA — Canada’s clean tech­nol­ogy in­dus­try is piquing in­ter­est among in­vestors and work­ers in Sil­i­con Val­ley, En­vi­ron­ment Min­is­ter Cather­ine McKenna said Thurs­day dur­ing a trade mis­sion to Cal­i­for­nia.

McKenna’s com­ments came the same day as a new re­port say­ing Canada’s once-promis­ing clean tech sec­tor is bleed­ing money, lag­ging in­ter­na­tional com­peti­tors and likely to land well short of the $50 bil­lion in rev­enues once pro­jected by 2022.

The re­port, from An­a­lyt­ica Ad­vi­sors, wants emis­sions to be­come part of risk as­sess­ments for pri­vate lenders to help make clean tech more at­trac­tive. It also wants fos­sil-fuel sub­si­dies phased out im­me­di­ately and fed­eral in­vest­ments fast-tracked.

Clean tech­nol­ogy in­cludes any­thing from bio­fu­els and clean power gen­er­a­tion such as so­lar or wind pro­duc­tion, to com­pa­nies which work on en­ergy ef­fi­ciency build­ings, smart power grids, waste­water pu­rifi­ca­tion sys­tems or agri­cul­tural pro­cess­ing.

McKenna — in Cal­i­for­nia for a cli­mate change con­fer­ence and meet­ings with in­dus­try and gov­ern­ment of­fi­cials, in­clud­ing Cal­i­for­nia Gov. Jerry Brown — said there was a lot of pos­i­tive talk about Canada’s in­dus­try.

“This is a re­ally great op­por­tu­nity for Canada,” she said. “Com­pa­nies and ven­ture cap­i­tal firms are very in­ter­ested in what we’re do­ing.”

There is also a lot of in­ter­est on the hu­man side, in an in­dus­try where for­eign-born tal­ent is wor­ried about new tighter im­mi­gra­tion and visa poli­cies un­der U.S. Pres­i­dent Don­ald Trump.

“One of the big­gest things I heard in Cal­i­for­nia is the fact we have a fast­track pol­icy when it comes to im­mi­gra­tion,” she said. “There is a lot of in­ter­est to come to Canada.”

In Canada, how­ever, the in­dus­try is strug­gling. In 2011, An­a­lyt­ica pres­i­dent Ce­line Bak pegged the fast-grow­ing sec­tor to hit $50 bil­lion in rev­enues by 2022. That goal is now “out of reach,” said Bak, un­less a sig­nif­i­cant change is made to how fi­nan­cial mar­kets make cap­i­tal in­vest­ments.

“When I made that call sev­eral years ago, there was an as­sump­tion at that time that fi­nan­cial mar­kets would move more quickly than they have,” Bak said.

Now an­tic­i­pated rev­enues by 2022 are ex­pected to be closer to $18 bil­lion.

Al­though it is still grow­ing — rev­enues were up eight per cent in 2015 to $13.27 bil­lion — re­tained earn­ings de­clined each year be­tween 2011 and 2015. The only sec­tor within the in­dus­try to see pos­i­tive re­turns on sales is green power gen­er­a­tion, such as so­lar and wind power com­pa­nies.

“It means we have an in­dus­try where com­pa­nies are not yet at a scale where they can be prof­itable,” said Bak. “They need cap­i­tal in or­der to get to that scale. Pri­vate-sec­tor fi­nan­cial mar­kets, by virtue of the reg­u­la­tion that they must abide by, do not yet have the flex­i­bil­ity to lend to com­pa­nies that are not prof­itable.”

McKenna said that is one of the rea­sons she was on the trade mis­sion this week. “It’s a huge op­por­tu­nity for us and of course we need to be do­ing to do bet­ter,” she said. “We un­der­stand this is the way the world is go­ing, and we have re­ally smart peo­ple.”

McKenna bragged about the gov­ern­ment’s re­cent bud­get in­vest­ments in clean tech — about $1.8 bil­lion — but most of that money doesn’t start to flow in a ma­jor way for at least two years. Canada’s share of the in­ter­na­tional clean-tech mar­ket is ranked 16th among the top 25 ex­porters.


En­vi­ron­ment Min­is­ter Cather­ine McKenna: “Need to be do­ing bet­ter.

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