Maybe I'll start with the codes and standards issue. It sounds like a pretty technical and not so sexy topic, but it's mighty important. We've seen and heard countless stories about some of our competitors—who will remain nameless—who very deliberately made sure that their heat pump standards were mimicking the global standards. This makes it rather difficult for our local manufacturers to penetrate those markets.
Again, it's a global game. Those partners are very deliberate, and we have to make sure that we are equally forceful, not just looking at our own codes and standards in Canada, but also playing a more active role in the global arena to make sure that we help define those global codes so that, at the very least, our firms can sell their gear and are not excluded right off the bat before they can even get to the marketplace.
It really calls for us to work between our manufacturers and our codes and standards colleagues to make sure that we are there to defend more actively, in various global forums.... Some of those discussions are very technical, and you have to dispatch engineers to go through these, but unless you're willing to invest that time and effort, you're going to be shut out from those markets.
Once the codes and standards are established, it's pretty hard to change them. They're typically there for years, if not decades, and then the market is just taken away from those firms. So being attentive to this, I think certainly deserves clearer attention.
On your question regarding the valley of death and what to do on that, the two things I can probably focus most attention on are around demonstration projects. We heard from our consultation in the pan-Canadian framework that this is a clear area where there is a lack of funds. Those things cost a pretty penny.
You mentioned your involvement in the oil and gas sector, Mr. Chair. Having a demonstration project in that space typically costs $20 million, $50 million, $75 million, or $100 million a pop. There are many technologies there that need to be demonstrated, so it is a significant commitment on the part of the firms sponsoring this and the potential adopters. Often they're reluctant to jump in unless governments are willing to shoulder the cost, especially for the first of a kind, because the technology risks are significant and delays are often occurring, so nobody wants to be first and everybody is waiting for one another. At the end of the day, our industry is not well served. That's certainly a priority area.
The other one I would flag is around risk capital for that kind of pre-commercial stage, where, again, financial institutions don't want to go there because there is still some hesitation about a new product or a new service. This is where they are looking for government assistance, and we do have some funding programs in this regard from SDTC, which has had a record of support in this area. It helps fill that void before a venture capitalist picks it up.
We don't have very deep capital markets for venture capital in Canada. It's just a fact. Our firms end up relying on other sources of funding, or they have to go to the U.S. to seek that capital. I was in San Francisco for a clean-tech event with Julie, and we saw a lot of our Canadian companies knocking on the doors of U.S. institutions and banks to fund them. It's the same in New York or Boston. Some might argue that it's not necessarily a bad thing, but it would be nice if the financial sector in Canada was able to stretch its funding envelope to help some of our firms here.