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Canadian Cleantech is Growing

November 9, 2023


In October 2023, Export Development Canada (EDC) published its annual report on Canadian clean technology (“cleantech”). The report highlights two major industry trends: (1) a dramatic increase in investment activity; and (2) a disconnect in conversion from startups to scaleups.

The global market for cleantech is expected to hit US$26 trillion within the next ten years, signalling an increase in opportunities for Canadian companies to enter the space. In 2022, venture capital investment in Canada reached C$1.2 billion across 46 deals, marking a 63 percent increase from 2021. The investment activity was broken down into $40 million in seed investment, $452 million in Series A and B investment, and $621 million in late-stage investment. The first quarter of 2023 saw C$174 million in investments across 21 deals. This signals growth in the number of annual deals, but a decline in the average deal value.

However, as a result of the more robust incentive programs in the U.S., many Canadian cleantech companies migrated south. The EDC report noted a lack of local investors, reporting that a significant amount of cleantech investment comes from Canadian government funding, international investors, or pension funds.

In response to these trends, the Government of Canada’s 2023 budget (“Budget 2023”) proposed new cleantech and green economy tax measures to further incentivize Canadian companies to plant their roots in home soil. For example, a proposed 15% tax credit for investments into clean electricity would be available as of the day of the Government of Canada’s 2024 budget. For more information on changes to Canadian cleantech investment, see: Budget 2023.

Author: Noa Rapaport, 2023/2024 Articling Student-at-Law


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