With the announcement of Ontario`s Cleantech Strategy (the “Cleantech Strategy”) in February, Ontario`s Ministry of Research Innovation and Science demonstrated a desire to position the province`s growing cleantech sector to capture global opportunities. This provincial initiative in Ontario has now been complemented by a larger federal initiative called the Low Carbon Economy Challenge.

Ontario`s Program

At the provincial level, the Ontario Cleantech Strategy aims to promote a ‘business-friendly environment’ for economic growth in the sector by seeking to attract global talent, modernizing regulations and increasing funding across the following four sub-sectors: 1. Energy Generation and Storage; 2. Energy Infrastructure; 3. Bio-products and Bio-chemicals; and 4. Water and Wastewater. These four sub-sectors are where Ministry staff see the potential for Ontario to thrive globally and your authors would agree.

In the energy generation and storage field, Ontario has procured over 50MW of energy storage, including batteries, hydrogen storage, flywheels and compressed air and, over the past ten years, procured and built more than 26,000 renewable energy generating stations. Across the province, by our count, ten separate university research institutes are focused on renewable generation, energy storage and solving the challenges of climate change. Currently, 42% of Ontario’s installed capacity is renewable and, of course, in 2014 the province became one of the first jurisdictions on earth to fully shutter all existing coal-generating facilities. Despite having a relatively meagre population of 13.6 million, Ontario’s installed solar generating capacity places it among the top 20 countries worldwide.

Ontario is also a leading proponent of the use of bio-products and bio-chemicals. Ontario has more biomass per capita than any other country. Ontario also has 495MW of biofuel or biomass generation capacity, and is a national leader in bio-product companies, revenues and R&D expenditures.

In Water and Wastewater, it is worth noting that Ontario has 102 water-related research institutes and 42 water-related NSERC Canada Research Chairs. Ontario is home to the first venture capital firm in the world dedicated to water. Homegrown global players have advanced R&D capabilities, and over 900 companies in the industry are based in Ontario.

Ontario’s Cleantech Strategy aims to catalyze growth in these sub-sectors by infusing capital, streamlining the regulatory environment, and welcoming innovation through a “Four Pillars”, approach: 1. Venture and Scale Readiness; 2. Access to Capital; 3. Regulatory Modernization; and 4. Adoption and Procurement.

Through Venture and Scale Readiness, the province will build on existing supports and better equip cleantech start-ups with the capabilities to help overcome risks and structural barriers in the scaling-up process. For example, Ontario will improve access to global market intelligence and will enhance its export services and programming. To bring products to market more efficiently, the Cleantech Strategy will also provide companies with better information about the regulatory environment.

As part of its Access to Capital initiative, Ontario has made a commitment of $55 million to develop new approaches to making equity investments in cleantech firms. The province’s Cleantech Equity Fund Initiative will focus on providing venture capital to high potential, innovative, Ontario-based cleantech businesses. The province’s Global Market Acceleration Fund will help Ontario-based cleantech companies mitigate risks of expansion.  Finally, Ontario is working to provide provincial and federal support through the Business Development Bank of Canada, Export Development Canada, and Sustainable Development Technology Canada.

Ontario is also modernizing its regulatory environment to facilitate faster and broader adoption of new technologies. Through the 2017 Long-Term Energy Plan, Ontario is committed to addressing regulatory barriers that inhibit innovation in the electricity distribution sector. The province is engaging with the solar and broader renewables sector to review and amend regulations, codes and rules that create barriers for energy storage technologies. If done right, these initiatives should enable the province to create the environment for utilities to invest in cleantech that improves efficiency, lowers costs and provides more choice to customers.

The Adoption and Procurement pillar aims to improve partnerships and boost the uptake of new technologies. The Low Carbon Innovation Fund is intended to help researchers, entrepreneurs, and companies create and commercialize new, globally competitive, clean technologies that will help Ontario meet its greenhouse gas emissions reduction targets and drive economic growth. Ontario has provided $74 million from the Ontario Green Investment Fund toward TargetGHG, a program offered through the Ontario Centers of Excellence, to seed the development of novel clean technologies. Ontario also invested $25 million from the Ontario Green Investment Fund in the SMART Green program that is designed to assist businesses with investing in equipment and process upgrades, including high-efficiency ovens, dryers, kilns and furnaces.  Additional Green Ontario Investment Fund resources targeted at distributed solar and energy storage technologies are expected to be announced imminently.

Support at the Federal Level

Ontario’s Cleantech Strategy fits well into larger federal initiatives to invest in the energy sector which were announced on March 14, 2018. At the federal level, Canada’s Ministry of Environment and Climate Change (the “MOECC”) has announced a $500 million Low Carbon Economy Challenge (the “Challenge”). The Challenge is the second part of the broader Low Carbon Economy Fund (the “Fund”) announced earlier, aimed at supporting projects that will reduce greenhouse gases.

The “Challenge” program is divided into two streams: the “Champions stream” and the “Partnerships stream”.

The Champions stream offers over $450 million in funding and is open to applicants of any size. Eligible applicants include all provinces and territories, municipalities, Indigenous communities and organizations, businesses, and not-for-profit organizations. The deadline for applications is May 14, 2018.

The Partnerships stream, valued at $50 million, is limited to Indigenous communities and organizations, small and medium-sized businesses, not-for-profit organizations, and small municipalities. It will begin operating later in 2018.  

The selection process for applicants to both streams will focus on the project’s ability to reduce emissions in a cost-effective manner and will also factor in potential for energy savings and job creation. The minimum contribution to any project through the Challenge is $1 million. The maximum individual contribution from the Champions stream is $50 million. The maximum contribution from the Partnerships stream is $10 million. Final decisions on funding proposals will be made in late 2018/early 2019, and spending must be complete by March 21, 2022.

Ontario is already a national leader in Canada’s cleantech energy sector. The Cleantech Strategy announces Ontario’s ambitions to become an industry leader on the global stage. Building on its current strengths, the Cleantech Strategy positions Ontario to take advantage of global industry trends and lead the sector for years to come.  The alignment of policy at the federal level should only strengthen opportunities for growth within the province and make it even more attractive as a destination for investment in innovation industries.