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.
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 in a conference call. "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 fast-track 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. Bak said there are companies that have completed their research and obtained patents, but lack the capital they need to actually produce their products.
Canada's share of the international clean tech market fell 12 per cent in 2015. It remains ranked 16th among the top 25 exporters, with 1.43 per cent of the market. China, with more than 21 per cent, Germany with almost 11 per cent and the United States, with almost 10 per cent, are the top three exporters in the industry.
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.