Canada needs policy fix for green growth, studies

Governments must set stable policy and incentives, invest in research and remove trade barriers to make Canada an attractive play to develop, sell and adopt green technology, the Conference Board of Canada said.

It noted that the Climate Change Business Journal estimates the sector's size at over US$600 billion in 2008, and said some observers forecast it will become the world's third-largest in a decade.

Canada ranked fourteenth among countries exporting green technology in 2008, with exports valued at about C$4 billion, the Conference Board said.

That 2 percent market share trailed Italy, France, Britain, Mexico, Belgium and Denmark. Germany was the top exporter, followed by China, the United States and Japan.

The value of Canadian green exports declined by 2 percent annually, on average, between 2002 and 2008, after adjusting for inflation, the report said.

Another study of 160 companies by a government agency that backs clean technology said the picture at home was more promising. The sector grew at an annual rate of 47 percent during the recession of 2008-09.

It is set to grow 117 percent between 2010 and 2012, said Sustainable Development Technology Canada.

SDTC operates two funds worth a combined C$1.5 billion ($1.47 billion) to support projects addressing climate change and demonstration-scale renewable fuel facilities.

Its report sets out a game plan for Canada to establish 20 C$100 million cleantech companies by 2020.

Canadian companies urgently need better access to capital, improved policy and more effective management of individual companies, it recommends.

"The Canadian cleantech industry has plenty of potential to build globally-competitive companies," said Celine Back, partner at advisory firm Russell Mitchell Group, which co-authored the SDTC report.

"Yet, a thriving Canadian cleantech industry will depend on more than just technological innovation; we will need to become world-class marketers and business managers too."

The study found that 86 percent of Canadian clean technology companies have revenue below C$5 million.

($1=$1.02 Canadian)

(Reporting by Susan Taylor)