Government Operations Committee on Nov. 27th, 2018

[Jean-François Béland, Administrator and Vice-President, Corporate Affairs and Strategy, General Fusion, CanadaCleantech Alliance]

My name is Jean-François Béland, and I am a member of the board of directors of the CanadaCleantech Alliance. I am also vice-president of General Fusion, in Burnaby.

[Denis Leclerc]

The expertise of Canadian clean technology firms is very broad. It includes water treatment and management, waste management and reclamation and, as Ms. Petrevan just mentioned, air treatment. So there is a wide range of expertise here, in Canada. Our context is also conducive to the development of those innovations thanks to the availability of numerous natural resources, strong leadership in the fight against climate change, as well as the research and development environment, which is very dynamic.

That fertile ground is an asset, but we could do better. Canada could be a world leader in clean technology. Despite all the assets I just listed, businesses must show the “techno-economic” benefits stemming from their innovations. So they are often searching for testing grounds or demonstration projects, also called storefronts. We are not talking about storefronts in a shopping centre; those are real demonstration projects in concrete operating conditions. Such projects are necessary to help businesses improve their marketing capacity. The government and Crown corporations—we think it is very important to also associate those corporations—have a purchasing power of several billion dollars a year. That is a tremendous tool to develop not only a healthier environment, but also an innovative sector like clean technology.

At CanadaCleantech, we prioritize six initiatives on the use of public markets that aim to stimulate the clean technology sector. Those six priorities are divided into two families.

The first aims to remedy the shortage of testing grounds or demonstration projects to test the benefits of Canadian clean technologies and demonstrate them. The objective is to help businesses market their clean technologies. The first measure is the creation of testing grounds or technological storefronts in departments and Crown corporations. We could talk about that further. The second initiative is about applying the quotas reserved for clean technologies to new public organization investments. The third initiative is the creation of spaces for exchange, referred to as marketplaces, between potential users of those technologies and Canadian innovators. Very often, people are unaware of what they don't know. It is very difficult to request technologies you don't know about. Those are the three priorities of our first family.

The second family, which consists of three initiatives, mainly focuses on the integration of best performance criteria in public tenders, so as to promote local technologies and achieve Canada's economic and environmental objectives. The first initiative is about taking into account the total cost of ownership in the calculation of costs related to the awarding of a government contract. We are talking about the total cost of ownership here, and not the cost of acquisition. The second initiative is the introduction of a premium related to exceeding minimum environmental standards in the scoring of tenders. Finally, the third initiative is about broader use of performance contracts. It's a matter of specifying what needs to be achieved and not how it needs to be achieved.

The application of our recommendations would accelerate the shift to a green economy and lead to much cleaner growth. It would directly benefit many innovative Canadian businesses, stimulate a very promising sector and create high quality jobs. It would also support the government in the achievement of its economic and environmental objectives and, most importantly, its greenhouse gas emission reduction objectives.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

We'll now go into our round of questioning, starting with seven minutes.

Madam Ratansi, you're up.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Thank you very much.

Thank you for being here. I am so glad we see a national voice for clean-tech sectors.

You were talking about innovation and how you could have a place to showcase some of that innovation. Can you give me an update on what's happening? You have MaRS Cleantech there, so you can have an incubator that will do it. That is question number one.

You also talked about investment in innovation. I'm wondering whether you are familiar with the five clusters that the minister for economic development has. How does it intersect with what you're trying to do?

Madam Petrevan, I was very impressed with what you were saying, but I also want to know how, in your opinion, the greening technology intersects with the work you're doing.

Mr. Leclerc.

[Denis Leclerc]

In terms of procurement, it's MaRS or other organizations across Canada. If you talk to entrepreneurs, they will tell you that they are always looking for a place to demonstrate their technology. Now, when they knock on the door of a private company, what is the answer? The answer is, “Good luck, but we have other priorities. We have production priorities. We are not a laboratory.” This is what they're hearing. The question is how to cope with this.

We're not the only country like this. I am a member of International Cleantech Network, which is a network of clean clusters from 14 countries. They have the same problem. What other countries are doing is that they are using their own government to showcase the technology. Sarah talked about Finland. Finland has a very aggressive policy in terms of clean technology. For example, they want to use 1% of their total annual expenses to procure Finnish clean technology.

This is an example of how a government can accelerate the pace not only of development of technology but also adoption, because with this fabulous showcase, then the entrepreneur can bring other customers around the globe to—

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Before Mr. Béland answers, there are places like IRAP. If IRAP can help in the development of the prototype, then perhaps that can facilitate the marketing of that product. I actually have six clean-tech companies in my riding that are export-ready and that have exported to different parts of the world. I am trying to connect the dots: Where is the disconnect?

Monsieur Béland.

[Jean-François Béland]

I would say that with the actual policies in place, IRAP, SDTC, SIF at ISED, and others, a lot of that is being done, with 10% to 15% to finish to go to the end of the road. Essentially, it could be the procurement system of Canada, where the federal government and other public administrations in the country could use this test bed. It is very difficult right now for small start-ups or SMEs all around the country that want to try to sell. It's tough in general to try to sell to the federal government, but it's much tougher when you are a clean-tech company. You need, for example, a level of capital and a first reference, but you don't have the reference. You started the start-up in a corner of your backyard.

That's where the Government of Canada could be used. It's not a very difficult, expensive tool. Really, it's giving a chance to the small, local SME to move forward and give them the first right to bid. One of the assumptions in the market, unfortunately, is that people always think that clean tech is more expensive. It is sometimes true, but it is not always true. That's fundamental.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

I have another question.

Has CTN been dismantled? There was a Canadian technology network which was allowing companies to access...probably angel financing, or to be given an incubator.

Are you familiar with that?

[Denis Leclerc]

No, I'm not.

However, there's a difference between development and innovation, like with IRAP, being in an incubator like maybe CTN, and commercializing your innovation.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Oh, yes, there is a difference.

[Denis Leclerc]

There is a big difference. That's why we need to focus on where to showcase, not how to develop. When it's developed, it's how to showcase your technology in order first to demonstrate the benefit, second to attract other customers, of course, and then you can export your technology.

It's good to help export technology to other countries, but I think our environmental performance in Canada is not that great. Can we use our made in Canada technology to improve our environment?

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Ms. Petrevan, do you have an answer to how we can intersect the policies of the government so that greening government intersects with what you're doing?

[Sarah Petrevan]

If I understand your question correctly, you want to know about the work that I'm doing at Clean Energy Canada specifically.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Yes.

[Sarah Petrevan]

Our mission and mandate as an organization is that we're a policy think tank. We work on climate and energy policy. Our overall mission is to support or encourage Canada's transition towards a low-carbon economy.

We see some of the work that is happening through the greening government strategy, particularly the tools around clean technology adoption/procurement, as essential to what Canada says needs to happen, which is clean growth.

I think a lot of the mistakes that folks make when they're looking at environment policy is that if we reduce emissions, clean growth is going to happen automatically. However, there are targeted initiatives and actions that government needs to take, which we encourage, that will result in clean growth. Some of those are being realized through the greening government strategy.

[The Chair, Conservative, Tom Lukiwski]

Thank you.

[Sarah Petrevan]

If I could just add—

[The Chair, Conservative, Tom Lukiwski]

Very quickly, please, Madam.

[Sarah Petrevan]

—very quickly to what my co-panellists were saying, while financial support is great for clean technology adoption, probably the first thing that somebody says when you're trying to sell technologies to another country is, “Where is it being used in your country?” It's important to actually have that commercialized example within Canada for exports abroad.

[The Chair, Conservative, Tom Lukiwski]

Thank you very much.

Monsieur Deltell, for seven minutes, please.

[Gérard Deltell]

Thank you, Mr. Chair.

Ladies and gentlemen, I appreciate the opportunity to speak to you. Welcome to your House of Commons.

I was paying careful attention to your comments that were meant to highlight high technologies, which are business opportunities, as we have always recognized. That is why our government implemented, a few years ago, the Canada ecotrust for clean air and climate change program, which has been pretty successful: $1.5 billion in contributions enabling businesses to reduce their environmental disconnect or bill—we can say both. That was our approach. We were helping businesses be more effective and energy efficient.

I would first like to turn to Mr. Béland and Mr. Leclerc.

What do you think gives entrepreneurs more incentive? Is it punishment because they produce greenhouse gas emissions or, on the contrary, helping them produce better to reduce those emissions? Is punishment the best method or, on the contrary, is it the encouragement to produce better?

[Denis Leclerc]

I don't know anyone who likes punishment, but one strategy always involves the carrot and the stick. That is why we must be pretty realistic. Some entrepreneurs and businesses will not make moves until they are forced to. That is a human thing. Those who have children know it. One strategy involves the carrot and the stick.

We must proceed fairly. We must measure the impact we will have not only on the business as such, but on its direct environment in its community and on the country.

As a country, what can Canada get from having products that are in higher demand abroad, mainly because of their low carbon footprint? Let's take the example of a business that wants to produce a pencil abroad. Large chains will ask it how much it is selling the pencil for, how many it can produce and what the carbon footprint of its product is. A reduced environmental footprint of our products becomes a way to sell them better.

[Gérard Deltell]

That's why our government created an ecotrust. Under our government, greenhouse gas emissions decreased by 2.2%. Our government also helped research and development companies. I know what I'm talking about. My constituency is home to CO₂ Solutions, a company based in the Lebourgneuf sector that recently obtained another government contract. The Honourable Jean-Yves Duclos went to see people from the company, and I'm very happy about that.

For the record, I went to see them 12 years ago, when they received a visit from the Honourable Stéphane Dion, the former Minister of the Environment. When I was a journalist, I reported on them and said that the company was a model and an example to follow.

[Denis Leclerc]

That's true.

[Gérard Deltell]

Our government continued to support the company, which has helped reduce greenhouse gas emissions in Canada's oil sands region. As we know, this area of the world has the highest environmental standards. We can be proud of the Canadian oil produced in our country, by people from our country. The environmental footprint of the oil is being reduced by workers across Canada, including people in my constituency.

Mr. Leclerc and Mr. Béland, I would like to delve deeper into the issue of companies.

In your opinion, how can a company succeed when it's trying to reduce its environmental footprint while competing with a company based in Asia, for example, which is at the other end of the world and which has environmental obligations that are completely different from the obligations that Canadian entrepreneurs are asked to meet in order to have a good ecological footprint? I used the word “asked” here rather than “required,” since it's not a stick.