Cleantech sector has too much advice, not enough action

The Net-Zero Advisory Body is the latest to put forth ideas as Canada needs to learn to compete in net-zero economy

Ottawa’s Net-Zero Advisory Body came out last week with 25 recommendations for resetting the national economy for a low-carbon future. They aren’t flippant suggestions. The group offers thoughtful proposals for the government, such as setting net-zero competitiveness goals, sharpening public investment funds to align with low-carbon industrial policies, and launching a power-grid council to co-ordinate the transformation to clean electricity across the country. Some of the advice is new, and some has been given in other forms by other panels for other initiatives.

As Canada tries to retool its economy to meet climate targets getting ever nearer, it will have to compete for the hundreds of billions of dollars needed for clean technology, renewable energy, carbon capture, you name it. Prime Minister Justin Trudeau’s government has convened numerous panels of industry experts to help chart the course. So many recommendations.

The problem seems to be putting them into action in time to live up to climate commitments. Difficulties in moving to the execution stage certainly plague Ottawa’s attempts to turn Canada into an innovation hub for the tech sector. A recent series of stories by The Globe and Mail showed there is little to show for years of studies and funding for tech superclusters and strategies for areas such as artificial intelligence, all under the name of innovation.

Alongside such ambition is the need to cultivate industries and projects necessary to help the country hit its net-zero targets, while flourishing in the export markets – topics on which the Net-Zero Advisory Body, or NZAB, concentrates. A frequent trouble spot is Canadian tech and cleantech stalling out at the commercialization stage, where it either gets bought by foreigners or withers on the vine. Now, a cornucopia of green incentives provided in the U.S. Inflation Reduction Act has alarmed Canadian executives trying to compete for capital and seeing it directed to the United States.

Karen Hamberg, a leading light in Canada’s cleantech sector and veteran of federal industrial policy panels, worries about what she calls “recommendation fatigue.”

That’s when, faced with a growing pile of advice from across the sectors in different formats, Canadians start to believe it’s all talk, and that the big ideas aren’t put into action. Now the focus must shift to implementation.

There is progress, she said, though it’s been quiet. “There are things that happen behind the scenes that make some incremental progress, but I guess celebrating base hits is not as fun as celebrating those grand-slam home runs,” said Ms. Hamberg, who is partner, financial advisory, at Deloitte. She was a clean-technology sector member of Ottawa’s Industry Strategy Council, formed to assess the scope and depth of the pandemic’s impact on industries and look to the future, and chair of the Clean Technology Economic Strategy Table.

Certainly, interprovincial trade barriers and lengthy and complicated regulatory processes for major infrastructure projects are age-old sticking points that still hinder progress, as does federal-provincial friction on areas such as resource development and emission-reduction targets.

But some ideas that have emerged from expert panels are being put in place, including a data strategy for the cleantech sector to guide investment and target-setting. Ms. Hamberg is also optimistic about new regional energy and resource tables, from which the feds seek to develop strategies for existing and new energy sources, along with provincial, territorial and Indigenous leaders.

“There’s going to be, ‘Here’s the analysis to date on electricity in B.C. or critical minerals in Ontario.’ All that information is going to inform the process rather than doing another set of consultations that looks like it starts from a clean sheet of paper. It certainly doesn’t, but I can see how sometimes that perception happens,” she said.

Perhaps it’s because there is a pile of panel reports, starting with the Advisory Council on Economic Growth, chaired by Dominic Barton, in 2016. The government set up economic strategy tables, which held meetings between dozens of chief executives and bureaucrats in 2017 and 2018. The talks focused on a number of key sectors, including cleantech and “resources of the future.” That was followed by the Industry Strategy Council in 2020, which sought to draw up a multisectoral roadmap for post-COVID Canada, and now NZAB.

Ottawa should comb through those volumes to come up with a strategy to deal with the competitive threat of the US$369-billion in cleantech and green-energy incentives now being offered in the United States. The key, Ms. Hamberg said, is to determine Canada’s industrial strategy for getting to net zero, rather than trying to match subsidies with the world’s biggest economy.

“Canada needs a strong competitive cleantech sector to compete in a net-zero economy, and so I hope that there is a pathway to ensure that those companies are able to continue to be headquartered and operated and generate value for Canada.”

Some ideas that have emerged from expert panels are being put in place, including a data strategy for the cleantech sector to guide investment and target-setting.