Accelerating Clean Innovation Conference (Session 1): The Canadian Context

“We are moving towards a global economy that increasingly will reward companies that are low-polluting, energy-efficient, eco-innovative and use natural capital more productively.” With this remark Stewart Elgie opened the conference, explaining that in order to compete internationally, Canadian companies will have to be better than their competitors at lowering their environmental footprint. And to do that requires accelerating the pace at which we develop and adopt clean innovations.

Before we get into how best to accelerate clean innovation, it’s important to first understand what the term means. For Sustainable Prosperity and our partners in this work, clean innovation is understood to include the implementation of new and improved technologies, processes and practices that will help solve environmental problems and resource efficiency challenges.

In order to start talking about the best way we can accelerate clean innovation, we first need to take a step back to understand the current Canadian context. Session 1 did just that; panellists Peter Nicholson Council of Canadian Academies Inaugural President), Velma McColl (Earnscliffe Strategy Group)), Peter Beaudoin (Canada’s Oil Sands Innovation Alliance, COSIA) and Isabel Galiana (McGill University) discussed the challenges and opportunities surrounding clean innovation in Canada.

Peter Nicholson launched the session by explaining the reasons behind what he refers to as Canada’s “low innovation equilibrium.” Relative to advanced OECD countries, Canada has maintained a low R&D and patenting intensity; competitiveness surveys give it a middling ranking in terms of innovation; and Canadian productivity growth has been anaemic over the past 30 years. How has Canada still managed to prosper – at least until now – given this low-innovation equilibrium? The answer lies, according to Nicholson, in the country’ s unique relationship with the United States where Canada has played a subsidiary role, as part of North America’s value chain, while the United States does most of the innovating.

This is, however, just “the big picture” and as Nicholson puts it; “we are comparing ourselves to the tough league! (OECD countries)” While on an aggregate scale, Canada may not be as innovative as we would like, there are lots of specific examples of Canadian innovation – including clean innovation. Velma McColl described Canada’s clean innovation sector, noting that there are over 700 Canadian clean tech companies, which together represent an $11 billion industry employing 40,000 people.

Although these Canadian clean tech companies are already globally competitive, there is ample room for expansion. McColl explained that the global clean tech industry is expected to grow to a $2.5 trillion market — “if Canada had the ambition to have 1% of this market” she added “we would have an (clean tech) industry the size of aerospace in Canada.” The question thus becomes: How can we break from our current low-innovation equilibrium in order to untap this potential?

According to Nicholson there are great disruptors — including the current global sustainability challenge — that seem to dictate a new innovation imperative for Canada, but he’s uncertain about these being sufficient to change entrenched behaviour. Small catastrophes —he adds — might be what’s needed.

A great example of how a small catastrophe can accelerate clean innovation was presented by the third panellist, Peter Beaudoin. He explained that until 2011, Canada’s environmental issues were not on the global environmental agenda, but this all changed after waterfowl landing on oil sands’ tailing ponds. This incident generated negative international attention and made oil sands firms recognize this not only as a threat, but also as an opportunity to collaborate on environmental issues. COSIA was thus created on the belief that “regarding the environment, they (oil sands companies) don’t compete” —Beaudoin stated — “Anything that benefits one organization, essentially benefits them all.”

COSIA’s unique collaborative model demonstrates that clean innovation can happen across all industry sectors and that it can be much more than just the development of clean technologies. In this case, the legal and organizational structure, which allows sharing of environmental technologies among oil sands firms, is an innovation in itself.

Just as the private sector is showing innovation in processes and practices, there’s a need to innovate in public policy. All four panellists agreed that in order for Canada to untap its clean innovation potential, there is a need for a comprehensive set of policy tools and mechanisms to accelerate this transition.

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