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Industry Report on the Western Canada Environmental Technology Sector - January 2005

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Table of Contents


Executive Summary
Introduction
Background
Implementing the Recommendations

Other Recommendations
Conclusion
Appendix I – The Validation Process
Appendix II – Perceptions of the Western Canadian Environment Industry

Executive Summary

At the December 2003 Environmental Technologies Forum in Vancouver, Prime Minister-designate Paul Martin acknowledged the importance of environmental technology and spoke of its enormous potential to help avert global ecological problems as the developing world industrializes.

He challenged participants to bring him a few concrete proposals to realize this potential, and linked environmental technology to other priorities planned for his government relating to cities, infrastructure renewal, healthcare, energy, and First Nations.

At the Forum and on other occasions, the Prime Minister articulated his desire to re-align governmental policies and incentives in order to advance Canada to a position of leadership in the fields of renewable energy, resource efficiency and conservation. He put forward a vision of Canada as a world leader in developing and applying leading-edge environmental technologies and expressed a willingness to do whatever was necessary to make the environmental sector a major force in the Canadian economy.

His challenge generated an extended process of dialogue and consultation with industry groups and other stakeholders across Western Canada. Using the Forum's conclusions as a basis for discussion, roundtables and surveys were used to gauge the needs and desires of the sector, and to distil these into actionable recommendations. This Report is the culmination of that process.

In summary, the environmental technology sector identified three key recommendations as first priorities to enable Western Canada to make a meaningful contribution to Mr Martin's vision of a more 'Sustainable Canada'.

  • Provide support for demonstration projects;

  • Adopt regulatory regimes that encourage the development and deployment of innovative environmental technologies; and

  • Implement fiscal incentives to promote the early adoption of new environmental technologies.

Significant endorsement was also expressed by the industry for the adoption of green procurement policies for government.

While there was a great deal of support expressed for the Prime Minister's vision of a sustainable Canada, many of the industry leaders consulted were concerned about the state of their sector (see Appendix II).

Most regarded their own company's fortunes favourably, but in general terms industry respondents had lukewarm views about the state of the environmental technology sector, ranking current prospects only as "fair".

These results are not surprising. Other studies of the Canadian environmental business sector have reached similar conclusions. Firms in this sector tend to be small to medium sized enterprises providing specialized expertise, technologies and services to clients in business and government. They are fully occupied servicing domestic market demands despite the vast potential of the international market for environmental goods and services.

Though companies in the sector are anxious to expand, they lack the financial resources or managerial capacity to engage in extensive technology development or market expansion activities. While many are noted for the high quality of their technologies and expertise, few actually produce environmental goods or products for the export market.

The December 2003 Environmental Technologies Forum and the consultative process that followed provided an excellent opportunity to develop clear and precise recommendations on how the federal government can work with the industry to overcome these constraining factors.

The recommendations put forward herein are intended to guide the government in its efforts to create a more sustainable Canada and to help the western Canadian environmental sector to better coordinate its contributions to that process. Their focus is simple and straight forward: demonstration, regulation, and innovation!

In order of priority, the western Canadian environmental technologies industry recommends the following:

First Priority: Demonstration Projects

  1. In partnership with industry, the federal government should support a series of demonstration projects that showcase environmental technologies and expertise available in Western Canada and to promote their early adoption - both at home and abroad.

Comments : Industry stakeholders believe demonstration projects are an effective way to showcase Canadian excellence in all environment related sectors and to build new markets. Western Canada has much to offer the world in terms of innovative technologies and sustainability solutions related to energy, forestry, agriculture, water/wastewater, contaminated site remediation, sustainable cities, and in climate change-related areas. Stakeholders identified the 2006 World Urban Forum in Vancouver and the 2010 Olympic Games in Vancouver and Whistler as just two events where western Canadian demonstration projects could be highlighted.

By working together within the context of a long-term and transparent Technology Demonstration Project program, industry, the research community, and key government agencies can develop and showcase real world solutions to pressing environmental problems.

Second Priority: Smart Regulation

  1. The federal government should develop regulatory regimes that promote the development and early adoption of environmental technologies and sustainability solutions across Western Canada.

Comments: It is recognized that the environmental technology sector in large part is shaped by regulatory regimes at the local, provincial and national levels. Industry stakeholders believe that regulation is a shared responsibility in which governments, citizens and industry all have active roles to play. Smart regulatory systems can generate social and environmental benefits, and help create a competitive and innovative economy that is attractive to investors and skilled workers.

By making regulation as effective as possible and allowing more flexibility in terms of how results are achieved, these regimes can provide an enormous incentive to the development and early adoption of innovative western Canadian technologies and solutions .

Smart regulation could include revising and updating federal government regulations to remove barriers and impediments to innovation, and increasing incentives for the application of new environmental technologies and encouraging similar changes in provincial and municipal government regulatory regimes.

Third Priority: Fiscal Incentives

  1. Working closely with the business community, the federal government should introduce fiscal and other funding measures to promote capital investment in innovative environmental and clean technologies similar in scope to the Innovation and Productivity Tax Credit program this is being recommended by the National Research Council and that has proven successful in British Columbia in providing early stage funding.

Comments: While the recommendation is clear, its implementation will require considerable effort and time to implement. Fiscal incentives such as provincial R&D tax credits, renewable energy incentives etc., and other measures must be examined to determine their overall economic impact and technology development potential.

In addition to these three priorities, industry stakeholders also believe the federal government's purchasing power can be an effective tool to stimulate the early adoption of environmentally sound and energy efficient products, services and technologies. To this end the federal government is encouraged to move quickly to implement the stated commitment to make green procurement a reality for the purchase of goods and services by federal departments and agencies. This commitment would also include Leadership in Energy and Environmental Design (LEED) standards (or equivalents as relevant) for all new construction where federal funding is involved.

In the broader context, there was considerable support within the industry for the Prime Minister's vision to develop and apply advances in environmental technology to create a more sustainable Canada, to build globally competitive firms, and to attract capital and entrepreneurs from around the world. Achieving this vision will involve pursuit of the thirteen initiatives outlined by the Minister of the Environment in his response to the Speech from the Throne (See Box below).

Stakeholders in all western provinces were clear in their willingness to work with the federal government to achieve this vision and to pursue the 13 initiatives as outlined by the Minister of the Environment.

The consultative process leading to the above recommendations involved industry roundtables and on-line surveys managed by Western Economic Diversification Canada. This approach was used to broaden the basis of industry viewpoints in formulating recommendations for the Prime Minister.

It is believed that similar industry-led consultative mechanisms will be required to facilitate government-industry partnerships to implement the chosen recommendations and to pursue the 13 initiatives outlined below.

Finally it is worth noting that this Report draws heavily upon studies undertaken preparatory to the Environmental Technologies Forum; working papers prepared in the course of post-Forum stakeholder consultations across the West, and the findings of a pan-western on-line survey conducted by the Ipsos-Reid Corporation (see Appendix I). This Report was prepared the GLOBE Foundation of Canada, which has been an active participant in all phases of this endeavour.

However, it is crucial to note this document is not a GLOBE Foundation or an Ipsos-Reid Report. Rather it is an expression of concerns, ideas and recommendations of hundreds of concerned Canadians across the West who wish to make the western Canadian environmental technology sector a strong and vibrant contributor to a Sustainable Canada and to sustainability in the global context.

Thirteen initiatives to make Canada's environment healthier and economy stronger

  1. The Government will work with its partners to build sustainable development systematically into decision making.

  2. The Government will work with the private sector to improve the commercialization of the best new environmental technologies. Major investments funded out of the proceeds of the sale of the Government's Petro-Canada shares will support the development and deployment of these technologies.

  3. The Government will consolidate federal environmental assessments and will work with the provinces and territories toward a unified and more effective assessment process for Canada.

  4. By 2006, the Government will implement a new Green Procurement Policy to govern its purchases.

  5. The Government will introduce legislation that will strengthen the focus on the ecological integrity of Canada's national parks.

  6. The Government will place increased focus on energy.

  7. The government will support wind-power production, stimulated by a quadrupling of the Wind Power Production Incentive.

  8. The Government will refine and implement a national plan for climate change, in partnership with provincial and territorial governments and other stakeholders.

  9. The Government will work with the United States and agencies like the International Joint Commission on issues such as air, water and invasive species.

  10. The Government will bring forward the next generation of its Great Lakes and Saint-Lawrence programs.

  11. The government will move forward on its Oceans Action Plan.

  12. Through the New Deal for Canada's Cities and Communities, the Government will enable municipalities to make long-term financial commitments needed to help contain urban sprawl and to invest in new sustainable infrastructure projects.

  13. The Government will develop a comprehensive strategy for the North that will protect the northern environment.

Extracted from Speaking Notes for The Honourable Stéphane Dion, P.C., M.P. Minister of the Environment, Response to the Speech from the Throne, House of Commons Ottawa, October 19, 2004

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