Canada’s green tech is falling behind, report says

Ottawasun.com
April 19, 2016
By Megan Gillis

Just as Prime Minister Justin Trudeau gets ready to head to New York to sign the Paris Agreement, a new report shows that Canada’s green tech industry is falling behind when it should be ramping up to meet tough new climate targets and replace lost resource sector jobs.

Just as Prime Minister Justin Trudeau gets ready to head to New York to sign the Paris Agreement, a new report shows that Canada’s green tech industry is falling behind when it should be ramping up to meet tough new climate targets and replace lost resource sector jobs.

The fifth annual Canadian Clean Technology Industry Report pegs revenue of Canada’s “first new industry of the 21st Century” at $11.63 billion in 2014, with nearly 800 firms and 55,600 workers. Jobs were up 11 per cent from 2013.

But after growing at four times the rate of the economy overall in previous years, the industry hit its first slowdown since Ottawa-based Analytica Advisors started publishing reports based on confidential financial data and planning shared by public and private firms.

Revenues fell three per cent on a compound annual growth rate, and while the global trade in clean technology exports doubled to more than $1 trillion, Canada was the biggest loser of market share among top exporters with a loss of about 40 per cent between 2005 to 2014.

“Canada is falling behind because we haven’t up until now realized what we have in terms of an opportunity,” said Analytica Advisors president Celine Bak, who was to appear speak at a press conference Tuesday morning with Minister for Environment and Climate Change Catherine McKenna.

“We have an opportunity to have a triple bottom line with the combination of a significant and growing number of jobs, which enable young people to put their talents to work, a solution to climate change and the environment and an opportunity for investors, like our pension funds, to invest our savings in high-growth areas for the future.”

She cites examples of Canadian companies that make truck engines that run on compressed natural gas, build electric-car charging stations and turn garbage into biofuel.

A major problem is that while Canada has been investing in the slow and costly development of clean technology for 15 years, many of the companies bringing it to market don’t yet have balance sheets that convince banks to give them loans like they offer big resource companies, Bak said. They struggle to raise capital while an international commitment to end fossil fuel subsidies hasn’t materialized, which raises ire in the green technology industry.

“We’re at the point where we need to be reaping the benefits,” Bak said. “If we don’t put our mind to this now, we will not have the opportunity to benefit from these new innovations, precisely at the time when we would need them most.”

The report makes a string of recommendations, including a “substantial and rising price on carbon,” regulating industry toward using the best available green technology and more access to public procuring and infrastructure projects.

It calls for a levelled playing field with fossil fuels, “green bonds” for Canadians and efforts to “backstop risk” for green technology firms and cities and provinces who buy their products.

Canada is one of more than 130 countries expected to sign the Paris Agreement, the first legally-binding climate plan which takes effect in 2020 with the goal of keeping global warming to less than 2C and working toward 1.5C over pre-industrial times.

Yet according to projections by the International Finance Corp., Canada won’t meet its commitment to a 30- per-cent reduction from 2005 levels by 2030 unless it makes big changes.

Oil and gas sector exports are worth $140 billion a year.

“Canada as a society needs to feel that there are alternatives that can grow into replacing the part of the economy that is represented by hydrocarbons,” Bak said. “Including these solutions in the way we look at our approach to Paris will enable us to do that. There’s a combined opportunity, the technical lever to reduce emissions but also an emerging sector that will provide for the jobs and exports we’ll need very soon.”

Ellen McGregor’s award-winning family business in Mississauga, Ont., Fielding Chemical Technologies, offers recycling services such as taking waste solvents from customers including Fortune 500 companies, returning them clean for reuse, or turning them into new products, such as a thinner used to clean machinery that’s sold in 15 countries. The chemicals - which are made from oil in the first place - can be used again and again instead of incinerated, injected into deep wells or blended into fuel.

The problem is that the “disruptive” business takes research and innovation, unlike processes that use established technologies, so the company has been “a voice with laryngitis” trying to get the attention of industrial regulators. Without incentives for companies to recycle, it’s hard to be competitive, McGregor said.

“If we’re going to get serious about resource recovery and protecting this planet, we’ve got to regulate for the three Rs,” she said.