“Everybody wants to do it. They just don’t know how to dance together.”
That’s how Bryan Watson assesses the state of Canada’s cleantech sector — particularly the way that innovators and adopters are circling each other, looking for a way to engage and unlock the economic potential of Canada’s clean economy, and the decarbonization benefits that go along with it.
The build-up to this particular dance has been going on for years in Canada, according to Watson. But it’s only recently that the courtship between innovators and adopters has gotten truly serious.
Watson has viewed (and participated in) the evolution of the cleantech sector from a number of angles. He’s been the Managing Director of CleanTech North since 2012. Since its founding in 2008, CleanTech North has helped facilitate company-investor interactions, advised government on cleantech policy, and has provided mentorship to companies across Canada.
“In 2008, it was definitely unpopular to be in cleantech, and it has been an underfunded sector for a long time. Not just in Canada, but everywhere,” said Watson. “There weren’t enough forest fires and polar vortexes to bring it into the forefront of people’s minds that this is really happening.”
That’s now changed. Extreme weather events are increasing around the world, and across Canada. From the Globe and Mail:
Newly released data from the Insurance Bureau of Canada showed $3.1 billion in insurable losses resulting from the impacts of extreme weather in 2022. This ranks as the third-worst year for catastrophic losses in Canadian history, following 2016 ($6 billion) when wildfire ravaged Fort McMurray and 2013 ($3.9 billion), when Calgary and Toronto suffered flooding.
The costly weather events of 2022 were not restricted to one area of Canada – they hit the Maritimes with Hurricane Fiona ($800 million in insured losses), a summer derecho (massive windstorm) caused devastation in Ontario and Quebec ($1 billion) and a series of storms battered Western Canada ($300 million). Geographically dispersed storms are what climate change models predict, and that is what Canada is getting.
Capital is finally flowing to Canadian cleantech companies
Weather events are not the only shift that may help accelerate the growth of the Canadian cleantech sector. For the first time, cleantech companies are finding there’s abundant capital available for their businesses.
“Even when equity has gotten exceptionally tight and the credit system with the Silicon Valley Bank issues has created chaos, I’m still seeing cleantech deals getting done. To me, that’s telling,” said Watson.
While the sector has continued to mature on its own over the last decade, the 2022 Inflation Reduction Act (IRA) in the United States set out a bold vision and almost $370 billion (USD) for clean energy, clean tech, and decarbonization. Countries around the world are being forced to move quickly to implement similar incentives to ensure the growth of their sectors, and to stay competitive for future capital investment.
Canada’s 2023 federal budget was a direct response to the IRA. It allotted $60 billion (CAD) in clean energy tax credits and $20 billion (CAD) in sustainable infrastructure investments, amongst other financial commitments to the ‘clean economy.’ The budget focused its incentives on targeted areas where Canada has competitive advantages or opportunities, including critical minerals, hydrogen, nuclear, and electric vehicles.
So, to torture our initial metaphor a bit further, the cleantech gym is decorated, the music is on, and we now need to get people partnered up.
Added Watson: “I think the big role that the innovation sector needs to play is to meet with the adoption sector; all those building owners, all those trucking companies, all those mining companies. It’s not just the innovation, it’s the adoption – and bridging the gap between those two sides.”
Watson is trying to do his part to bridge those sides.
Introducing the world’s cleanest, greenest zoo: courtesy of cleantech
As part of his role with CleanTech North, Watson partnered with the Toronto Zoo in 2020 to raise the profile of clean technologies and simultaneously reduce the zoo’s carbon footprint.
As Watson noted in the official press release for the initiative: “In no other facility does such an expansive physical plant exist to serve and preserve such a myriad of highly unique, demanding, and disparate climates and facilities.”
“The challenge was how do we implement and create the greenest, cleanest zoo in the world?” said Watson. “The Toronto Zoo has microbiomes of every sort of climate in the world. This is the perfect testbed for clean technologies. If you think about it, they have every weather pattern that they have to manufacture. And they’re all micro grid. So, it’s about bringing innovators and adopters together to illustrate the art of the possible.”
The importance of mentorship for both innovators and adopters
On top of his role at CleanTech North, Watson is also Senior Vice President of Business Development at Venbridge. Venbridge provides growth financing to Canadian tech companies and works directly with founders to help them grow their businesses.
He sees the innovator/adopter dynamic from that angle as well.
“Every innovation company can always use more mentorship, and help raising money and things like that, but where I really think there’s a gap is helping them learn to sell to larger firms,” says Watson. “How do you sell into a large property management firm? How do you sell into CN railway? How do you navigate that process? And we need mentorship with both sides. For the adopter, it’s ‘how do I scan the market to see what I can actually do to green my industry?’ For the innovator, there also needs to be training and mentorship focused on ‘how do I dance with Goliath?’”
And this mentorship is going to be key to the country hitting its targets.“Ultimately there are still big barriers to closing the innovator and adopter gap. 2030 is seven years away and we have a lot of climate goals. We need all hands on deck. We’re not going to meet our goals unless we accelerate this process a lot.”
