Clean Technology and Innovation Beneficiaries of 2013 Budget



GLOBE-Net, March 25, 2013 –  The federal government decided to wait another year before setting the course for an integrated approach for Canadian clean technology, thus further delaying the potential for Canada to move from 1 percent of a $1 trillion global markets to 2 percent of a $3 trillion market and a $60 billion innovation-based export-focused industry in 10 years time [i].

The government did, however, place markers that suggest its openness to continuing development on policies and programs for the sector. Most significantly, it committed $13 million to SDTC over the next two years as part of a larger envelope of $325 million over 8 years. In keeping with its message of fiscal prudence, the government delayed major refunding of SDTC to after the planned return to fiscal balance in 2015.

Secondly, the recommendation made by the Canadian Clean Technology Coalition during the consultations for the Jenkins Report in 2011 were supported through funding of $20 million over two years to the Canada Revenue Agency to improve the predictability and enhance enforcement of the Scientific Research and Experimental Development tax incentive program, and $5 million to improve service to first time SR&ED claimants. In addition the clean technology industry will benefit from accelerated capital cost reductions for clean energy generation equipment and other equipment for waste conversion to energy.

More generally, there were a number of initiatives budgeted to support the incubation of innovation-based companies. These included $20 million over three years to help small and medium-sized enterprises access research and business development services at universities, colleges and other non-profit research institutions of their choice, and $60 million over five years to help outstanding and high-potential incubator and accelerator organizations expand their services to entrepreneurs.

At the strategic level, the 2013 Budget leaves no doubt about the government’s commitment to support Canadians inventing new technologies and incubating new companies to commercialize them. This is demonstrated through the programs above and through the significant investments for renewing venture capital in Canada.

From these investments we conclude that the government believes in and supports Canada’s ability to innovate and commercialize technology. The problem in our humble opinion lies elsewhere.

Simply put, Canada’s ability to innovate, incubate companies and commercialize technology outstrips our ability to integrate these companies and technologies into our economy, and particularly into our established sectors which for good reasons are risk averse and bound by tiered supply structures. Canada is not alone in this regard. The US and other advanced economies face the same challenge.

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