A surge of new climate policies is driving growth for clean technologies, but addressing early-stage funding gaps is critical to the success of the Canadian cleantech sector, according to Export Development Canada’s (EDC) latest annual cleantech report.
As outlined in Canadian cleantech: Powering progress, 2022 saw record investment in Canada’s cleantech sector at $1.2 billion—the highest recorded since 2018. Certain segments experienced higher investment volumes compared to 2021, notably energy and power—including nuclear fusion technologies and hydrogen—which experienced a 33% increase in investments.
“Cleantech investment has nearly quadrupled since 2018 and our analysis of a range of data has revealed that public policy is the driving force behind the momentum—and a key ingredient to the sector’s growth in Canada,” says Stuart Bergman, EDC’s chief economist and vice-president.
Challenges and opportunities
Even with a robust startup and accelerator ecosystem, the report points out that the sector faces challenges. Primarily, inadequate levels of private sector research and development (R&D) spending, with Canada trailing its peers in total R&D investment per capita. Addressing these early-stage funding gaps is critical to the future success of the Canadian cleantech sector. Left unaddressed, this represents a missed opportunity for Canadian cleantech companies.
Additionally, Canada has experienced consistent trade deficits since 2012 in the environment and clean technologies (ECT) sector driven by its reliance on cleantech goods imports.
“To build back more of our share of exports and maintain competitiveness in the cleantech space, private sector investment and support is imperative,” says Bergman.
On the positive front, the Canadian cleantech sector boasts a high number of small- and medium-sized companies that, with the right support, could attract the funding needed to scale and grow their operations.
“Boosting Canadian competitiveness, and the success of Canada’s cleantech ecosystem, means addressing the ‘startup to scaleup support gap’, and investments are needed across value chains to support nascent technologies,” says Guillermo Freire, senior vice-president, Mid-Market Group, and responsible for EDC’s cleantech practice.
“Working together in an ecosystem approach is critical to ensuring that support is being delivered across the cleantech lifecycle, from startup to commercialization to global growth and exporting,” Freire says.
Support for cleantech has been a strategic priority for EDC for more than a decade and has led the organization to become one of the leading financiers of Canada’s cleantech industry. Since 2012, EDC has facilitated nearly $29 billion in cleantech exports and, in 2022, provided a record $8.8 billion in business support for the sector.
From Oct. 30 to Nov. 6, EDC will host the 2023 Cleantech Export Week (CEW) themed Powering collaboration and accelerating progress. Now in its seventh year, the events will be hosted in-person in Ottawa (it will also be livestreamed), with in-person events in Toronto, Montreal and Vancouver.
For more information about EDC’s cleantech sector findings, please download the full report.
Click here to register for CEW and learn more.
*Note: The cleantech report is an annual review of the global and Canadian cleantech industry produced by EDC’s Economics team. The report analyzes data from leading organizations, providing expert commentary on the current status of and future potential for the Canadian cleantech sector.
