Thank you very much.
Hydrogen and Fuel Cells Canada is the national industry association representing companies and institutions operating in this sector. We have 75 members across Canada, and that's up from 65 members at the start of this year. This is made-in-Canada technology that is primarily driven by clean air, economic development in innovation jobs, greenhouse gas reduction, and energy reliability and security.
The state of the industry. Currently, our companies are investing over $200 million a year in Canada in R and D; $290 million in 2004. The entire energy sector is spending about $650 million. This small group of companies is investing one-third of Canada's entire energy R and D. It's pretty significant and it's also a statement of what's happening in R and D expenditures in this sector in Canada.
It started out with Ballard Power Systems in the early eighties--everybody's heard of them--but not really much has been heard since. Since then, we have created over 2,000 jobs in the sector; R and D expenditure is about $100,000 per employee; 90% of the product sales of over $200 million are outside of Canada, and we have commercial products now. I think that's something people don't know. They're still expecting the cars, which are a few years down the road, but you can buy fuel cell forklifts right now, you can buy back-up power for data centres, which is critical. There are currently 100 fuel cell buses operating outside of Canada, and 60% of those have Canadian technology in them. So that's the state of the nation.
The investment by the private sector is about $1 billion over the last five years. We have received, in terms of partnership support from the government, about $100 million. That's a 1:10 ratio, and that's only in the last five years. Over the last 15, it's about 3¢ of public support for every dollar the private sector invests. That's great. We're happy with that, but it's not going to get us to where we need to go. In the biotech sector, for every dollar of investment, there's $1.20 to $1.30 of public sector investment to support it, and it's a big success across Canada.
What's happening overseas? We're not alone anymore. We started, and we are the leaders, but we're not alone. The U.S. is investing heavily in the sector, and Japan, China and Korea. That's good. It validates the sector. It also creates markets for us, because we export, but it also creates competitors and we are in danger of losing our lead.
In a nutshell, what we need to do is deepen the partnership. I already showed you how the private sector has been leading this. It isn't the government. I often have meetings in Ottawa and I've been told, “Oh boy, we spend so much money on this sector and what have we got to show for it?” Well, it's the private sector that's leading this, with $1 billion of R and D investment over the last five years and about $100 million in public support. Clearly, the private sector.... We've got the jobs, over 2,000, but what we need now is to continue, over the next five years, support in terms of research and development for the technical challenges we need to solve for the bigger-volume commercial or consumer products. We need to continue doing demonstration projects. We run the Hydrogen Village in Toronto and the Hydrogen Highway in B.C., but we need to continue demonstrating this technology.
We need to stimulate demand, and that can happen through government procurement. If the government buys Toyota Priuses, there's no reason why it can't buy a hydrogen forklift from Canadian technology.
And we need access to capital. In terms of access to capital, we're talking about scientific research and experimental development, or SR and ED, credits. Currently, if you go public, you basically lose all your SR and ED credits, and that's a critical way to raise capital. So the definition of a Canadian-controlled private corporation needs to be revised and the limit needs to be raised from $2 million, which is not sufficient to fund the capital that innovation-based companies need in Canada.
We are also supporting the implementation of flow-through shares for the hydrogen fuel cell sector. We have a proposal forward to Finance Canada, and it's being considered.
Those two things will maintain Canada's lead.
The Minister of Energy in P.E.I. met with them last week and was very proud of the fact that they had recently sent their first cheque for $10 million to Denmark as a downpayment for a wind turbine. Wind is very good; it's mature, it's clean technology. But you're sending that $10 million to Denmark. Let's do what Denmark did--foster the growth of this sector so we can maintain our leadership. We'll recoup our costs through exports and through the jobs we create here in Canada.
Thank you.