Stewart Elgie is professor of law and economics at the University of Ottawa, and co-chair of the Smart Prosperity Leaders’ Initiative


By now every sector of the economy knows it has something to gain from clean innovation. They see the $2.5 trillion projection for the global clean technology market. They see the $3.6 trillion in business opportunities related to resource innovation and efficiency. They see their Chinese, US, and European competitors gaining a low-carbon edge. They also see a growing number of homegrown successes, from the first all-electric mine in North America, to trailblazing expertise in carbon-capture-and-storage, to exciting ventures in bio-chemicals, wastewater treatment and energy storage.

The burning question facing our business sectors is: how do we make sure we keep up? Our global competitors are passing us by. In the cleantech sector alone, Canada’s global market share has dropped by 12 percent since 2008.

The challenge is, while we rank highly at generating ideas and developing them into new technologies, we are falling behind other countries in getting those innovations to market – where jobs and wealth are created. So how do we get clean innovation right, from start to finish? Because Canada’s future economic success could depend on it.

The primary engines for driving clean innovation across the Canadian economy are private entrepreneurs and investors. And they have been heeding the call.

Consider Halifax-based Carbon Cure, which captures carbon emissions and then injects them into concrete. Fewer emissions, more durable product. That clean innovation has now been picked up by almost 100 concrete producers across North America.

Consider also Montreal-based Enerkem, which partnered with the City of Edmonton to divert 30 percent of household waste and turn it instead into a valuable biofuel – a clean innovation that just earned Enerkem a $125-million deal with China.

But to accelerate clean innovation at the pace we need, government too has a role to play – by providing incentives and removing barriers to unleash private initiative and investment. In fact, almost every major commercial innovation of the last century – from the smart phone to the internet and from the oil sands to canola oil – has needed major government support. This is particularly important for clean innovation, which faces unique market barriers – in particular, that market prices do not reflect the costs of pollution.

Governments can help to overcome these barriers in many ways: grants to support early research and development; loans and financing to help technologies scale up; and, importantly, pollution pricing, environmental standards and procurement policies that stimulate the market demand for cleaner solutions.

So how can we help Canada’s clean innovators get to the finish line faster?

Last week I joined 27 CEOs and Canadian leaders in recommending bold and urgent action to accelerate clean innovation in Canada. At the core of these recommendations was a simple formula. On one hand, Canada needs to push ahead with strong environmental rules. Policies like pollution pricing and low-carbon fuel standards, when designed well, stimulate action from innovators. At the same time, government needs to match those environmental standards with incentives to keep businesses competitive as they make the transition. That means reducing regulatory barriers and providing tax incentives, such as accelerated capital cost allowance, to support clean technology investment.


You can read all the recommendations, as well as the research report behind them, at smartprosperity.ca.

We must act now to secure our place among the emerging leaders in this new wave of clean innovation. The world will build a low-pollution economy with or without us. Let’s make sure that Canada opts in.