Message from the Minister

Ontario has a tremendous economic opportunity to grow its clean technology sector, with the global shift to combat and adapt to climate change. There are opportunities for our businesses, innovators and researchers to develop novel clean technology solutions that will ensure our global competitiveness, protect our natural resources and reduce our carbon footprint. The growth of Ontario’s clean technology sector is key to the province’s transition to a thriving, low-carbon economy.

This opportunity is aligned with our government’s Climate Change Action Plan (CCAP) and Business Growth Initiative (BGI). The Climate Change Action Plan is Ontario’s five-year plan to fight climate change, reduce greenhouse gas (GHG) pollution and transition to a low-carbon economy. Key to that transition is spurring clean technology innovation and rewarding efficiency. This is in line with the Business Growth Initiative (BGI), which is catalyzing the innovation economy by:

  1. driving innovation through research, development and adoption of technologies;
  2. scaling-up innovative companies, and;
  3. reducing the cost of doing business in Ontario through modernizing the regulatory environment.

Our Cleantech Strategy has four pillars to help cleantech companies to scale up and meet global demand through:

  1. venture and scale readiness;
  2. access to capital;
  3. regulatory modernization, and;
  4. adoption and procurement.

It builds on Ontario’s existing investments and initiatives to support innovation, commercialization and the scale-up of companies. Together these four pillars can give Ontario clean technology companies a strong competitive edge globally, improving productivity and building long-term growth.

The growth of the cleantech sector will enable Ontario businesses and households to adopt cleantech solutions in their companies, vehicles and homes - reducing both costs and environmental impact. This will allow Ontario to lead North America in innovative energy technologies, bio-products and bio-chemicals, and water technologies.

In the future, we can expect to see more scaled-up Ontario cleantech companies exporting to global markets, more top talent – especially business management talent – and more adoption of Ontario clean technologies, both globally and here at home.

By helping our cleantech companies get ready to scale – and helping them to connect to early customers here in Ontario – Ontario is supporting innovation and reducing emissions and environmental impact across industries. Over the longer term, we expect to see more scaled-up Ontario cleantech companies recognized as North American leaders.

Please take the opportunity to read the strategy and see how our government’s vision can support your business to scale-up and reach the global market.

Reza Moridi

Ontario Minister of Research, Innovation and Science


Global commitments to fight climate change and transition to a low-carbon economy are primary drivers of the growing market for clean technologies. Global population increases and urbanization pressures on scarce shared resources are also driving the need for solutions that can efficiently and effectively improve sustainability of our energy, clean water, transportation, and infrastructure. To meet these needs, world leaders are accelerating the growth of their clean technology sectors.

At the national and sub-national levels, climate change commitments are also driving the growing need for clean technology solutions. In Ontario, the province’s five-year Climate Change Action Plan (CCAP) aims to fight climate change, reduce greenhouse gas pollution, and support the transition to a low-carbon economy. To date, Ontario has taken a leadership role through policies and programs that have expanded renewable energy generation, modernized regulatory frameworks, implemented energy conservation and promoted clean technology innovation.

Ontario’s Cleantech Strategy builds on these strengths and past actions. A strong clean technology sector will require a mix of strategic policies, innovative technology and access to capital. To fight climate change, protect our shared resources, and maintain our high quality of life, Ontario is focused on providing cleantech companies with the tools to innovate, commercialize and scale-up their technologies and businesses.

Understanding cleantech

Clean technology is any process, product, or service that reduces environmental impacts through:

  1. environmental protection activities that prevent, reduce, or eliminate pollution or any other degradation of the environment;
  2. resource management activities that result in a more efficient use of natural resources; or
  3. the use of goods that have been modified or adapted to be significantly less energy or resource intensive than the industry standard.

A company that invents, builds, assembles or services a technology – be it hardware/equipment, software/IT or a consulting service – that protects the environment, efficiently uses natural resources, or saves energy or natural resources is considered part of the clean technology sector.

Based on an analysis of global demand and alignment with Ontario’s cleantech strengths, the strategy prioritizes the following sub-sectors:

  • Energy Generation and Storage
  • Energy Infrastructure
  • Bio-products and Bio-chemicals
  • Water and Wastewater

Global commitments

Global and national commitments to reduce greenhouse gas emissions (GHGs) are driving growth within the clean technology sector at an unprecedented rate. In 2014, the European Council Summit set out 2030 goals for the European Union to reduce GHG emissions by 40 per cent compared to 1990 levels. In December 2015, at the Paris climate conference, 195 countries, including Canada, adopted the first-ever universal, legally binding global climate deal. This requires countries to take measurable steps to limit global temperature increases to 2 degrees Celsius.

To meet these commitments, the global market for clean technology is expected to grow to a size of $2.5 trillion by 2022.

In 2017, the International Energy Agency (IEA) estimated a need for $10.5 trillion in global incremental investment in low-carbon energy technologies by 2030 just to meet global commitments related to the energy sector alone. Since low-carbon energy technologies are only part of the broader clean technology sector, the required global investment in clean technology over the coming years – to serve the growing market - is significantly higher. Global leaders around the world have been accelerating the growth of their cleantech sectors and identifying niche technology strengths to meet this demand:

  • Norway has the highest GDP/capita public expenditure on cleantech-related R&D.
  • Finland’s national strategic cleantech programme is working to expand cleantech revenues and to increase their number of cleantech companies by 33 per cent by 2020.
  • Germany is a world leader in cleantech finance with the German Development Bank making significant investments into cleantech.
  • United States is the world’s top biofuel producer.
  • United Kingdom has the world’s fastest growing bio-methane market.
  • China is planning to double its wind energy and triple its solar capacity over the next five years.

As one of Canada’s economic engines, Ontario’s ability to facilitate the growth of the clean technology sector will be critical not only to Canada’s commitment to fulfill our climate change commitments but also to the future economy of our country.

National and Ontario commitments

Canada’s cleantech sector has been growing over the last five years, and the landscape across the country is shifting. There are now more direct clean energy jobs than direct jobs on the oil sands, and employment across the full cleantech sector is even higher – and increasing.

Beyond global commitments, national and provincial climate change commitments are also driving the growing need for clean technology solutions. In 2016, the federal government developed the Pan-Canadian Framework on Clean Growth and Climate Change. This framework has four main pillars: (1) pricing carbon pollution; (2) non-pricing measures to reduce emissions across the economy; (3) measures to adapt to the impacts of climate change and build resilience (such as in infrastructure solutions); and (4) actions to accelerate innovation, support clean technology, and create jobs.

This framework also recognizes the diversity of provincial and territorial economies and the need for fair and flexible approaches to ensure international competitiveness and a business environment that enables firms to capitalize on opportunities.

Ontario also recognizes the need to grow the cleantech sector while reducing the province’s carbon footprint. The province’s Climate Change Action Plan is a five-year plan to fight climate change, reduce greenhouse gas pollution, and transition to a low-carbon economy. It outlines the path to meeting Ontario’s own aggressive targets for GHG emissions to be at 80 per cent below 1990 levels by 2050, with a midpoint target of achieving 37 per cent emissions reductions by 2030. Meeting these targets is within reach - as long as our cleantech sector grows, scales-up, and thrives.

Ontario context

For Ontario to be competitive with global cleantech leaders and to meet provincial, national, and global climate change targets, we must continue to grow our cleantech companies by accelerating innovation, increasing revenues and exports, and promoting global trade partnerships. Ontario has taken a leadership position to reduce its GHG emissions through programs and policies that support clean technology solutions. For example, our government has expanded renewable energy generation, implemented energy conservation policies and promoted the creation of clean energy jobs.

From a regulatory standpoint, Ontario has been modernizing regulatory frameworks to better support businesses and individuals. Our government most recently amended the Net Metering Regulation (O. Reg. 541/05), to enable consumers who generate renewable energy for their own consumption to pair renewable energy generation systems with energy storage technologies and to receive credit for excess energy sent back to the grid.

In 2010, Ontario launched the Water Technology Acceleration Project (WaterTAP) to help grow globally competitive companies and create high-value jobs in the water and wastewater sub-sector, and in 2013, released a Water Sector Strategy to drive innovation, expand exports, and create a competitive Ontario advantage in clean water technology.

The Climate Change Mitigation and Low Carbon Economy Act, 2016 has provided the foundation and governing structure for Ontario’s Cap and Trade program. This program was launched in January 2017, under the Climate Change Action Plan, and has generated auction proceeds that are being invested into programs to help businesses and homeowners improve energy-efficiency and reduce their greenhouse gas emissions. In early 2018, Ontario joined Quebec and California in the largest carbon market in North America.

Ontario’s strengths

Ontario has a lot of strengths to build on, with the largest share of cleantech companies in all of Canada. Ontario’s cleantech sector consists of over 5,000 companies, employs approximately 130,000 individuals, and generates about $19.8 billion in annual revenues. While these numbers include all those involved in manufacturing, installing, assembling, and otherwise facilitating cleantech, almost a fifth of those companies are innovative cleantech companies directly developing new intellectual property – helping to drive economic activity and success across the broader sector.

Across cleantech sub-sectors, there are four initial focus areas where Ontario is demonstrating significant strengths, is growing quickly, and has the potential to thrive globally. These are Energy Generation and Storage, Energy Infrastructure, Bio-products and Bio-chemicals and Water and Wastewater.

Initial Focus Areas

Ontario has clean technology strengths across these sub-sectors, and the global opportunities in these areas are also growing.

Energy Generation and Storage

Wind, solar, renewable fuels, nuclear, storage, and other forms of clean energy

  • Ontario has procured over 50MW of energy storage, including batteries, hydrogen storage, flywheels, and compressed air
  • Over 10 university research institutes focused on renewable generation and energy storage
  • 42 per cent of Ontario’s installed capacity is renewable
  • Ontario’s installed solar capacity is large enough to be among the top 20 countries worldwide

Energy Infrastructure

Intelligent power management, conservation, smart meters

  • If smart grid investments continue through to 2035, they have the potential to deliver a net benefit of $6.3B to Ontario
  • Over 4.8M smart meters installed
  • 1st jurisdiction in the world to implement mandatory time of use pricing

Bio-products and Bio-chemicals

Biomaterials, chemicals, bio-degradables, nano-coatings and other bio-products

  • More biomass per capita than any other country
  • 495MW biofuel or biomass generation capacity - 1 per cent of total
  • National leader in bio-product companies, revenues, and R&D expenditures

Water and Wastewater

Water conservation, purification, efficiency, treatment and other water technologies

  • 102 water-related research institutes and 42 water-related NSERC Canada Research Chairs
  • First venture capital firm in the world dedicated to water
  • Homegrown global players with advanced R&D capabilities, and over 900 companies

Our government has built a substantial network of innovation support programs, such as those through MaRS and the Ontario Centres of Excellence, and there are further opportunities to grow these sub-sector strengths. This strategy will support venture and scale readiness and facilitate access to capital at critical stages of business development. Furthermore, developing adoption and procurement initiatives will simplify processes and reduce barriers to entry to the market.

Ontario’s cleantech strengths and areas of opportunity show that we can facilitate sector growth by promoting a strategy that supports four pillars of opportunity. These pillars are interrelated and allow companies to take advantage of multiple tools such as market intelligence, capital, and a streamlined regulatory environment. Leveraged together, these pillars will help establish Ontario as a recognized North American cleantech hub by scaling up Ontario companies to meet growing national and international market demand for new technologies.

The strategy

Ontario’s Cleantech Strategy aims to catalyze the growth of the clean technology market while supporting the Business Growth Initiative, the Climate Change Action Plan and climate change goals. The pillars in the strategy are interrelated – working together, their effect is greater than on their own.

For a cleantech company to grow, it will need to be competitive with its non-cleantech equivalent throughout its supply chain. Since both environmental and economic drivers are creating market demand for clean technology, now is a critical time for Ontario cleantech firms to have all the tools they need to scale. Venture and scale readiness (1) is the first pillar of Ontario’s strategy, and it includes goals such as facilitating in-house R&D, building management talent, expanding entrepreneur knowledge of key global markets as well as of the regulatory environment at home and in markets further afield. Once a firm has these assets in place, it is ready to grow – and is better positioned to gain access to capital (2).

Ontario also understands that cleantech companies facing regulatory barriers can be delayed or prevented from innovating, fully developing, and demonstrating their technologies. Their customers - companies seeking to adopt and procure technologies that reduce their environmental impact - are also unlikely to move forward with implementing these new technologies if there is regulatory uncertainty. As a result, the third pillar of Ontario’s Cleantech Strategy is modernizing regulatory frameworks (3) to make it easier for cleantech companies in key sub-sectors to innovate, commercialize and scale up their technologies and businesses. A company with greater knowledge of and certainty about the regulatory environment for its technologies is also more likely to be able to access the capital it needs to grow (2). Once a company has gained access to capital, it is better able to bring its technologies to the market. Providing opportunities for the early adoption and procurement of technologies can help cleantech companies to scale-up (4).

This diagram demonstrates how the four pillars of the cleantech strategy interact to establish Ontario as a North American cleantech hub and meet Ontario’s climate change commitments. The pillars, Venture and Scale Readiness and Regulatory Modernization interact to support firms to improve Access to Capital, which is pillar 2. Once a company has gained access to capital, Adoption and Procurement, which is pillar 4, ensures the early adoption and procurement of these technologies.

Goals of Ontario’s Cleantech Strategy:

Establish Ontario as a recognized North American cleantech hub by leveraging provincial areas of competitive strength to meet growing national and international market demand for new technologies, while supporting climate change commitments and goals.

1. Venture and scale readiness

  • Strengthen opportunities for in-house R&D
  • Strengthen entrepreneur knowledge of key global markets - to align market needs, research priorities, and product development
  • Reduce regulatory uncertainty to facilitate access to capital
  • Attract and develop a strong pool of sales, marketing, and management talent

2. Access to capital

  • Increase access to scaling capital, including both grants and risk capital
  • Leverage federal efforts and investments in cleantech

3. Regulatory modernization

  • Streamline the regulatory environment where possible
  • Support performance-based standards and approvals processes
  • Support the development of harmonized industry standards

4. Adoption and procurement

  • Increase demonstration and pilot opportunities
  • Address prescriptive, risk-averse procurement practices
  • Facilitate adoption of technologies

Venture and scale readiness

While Ontario’s cleantech sector consists of over 5,000 firms, 55 per cent of these firms have less than 10 employees. There is significant opportunity in growing these small firms. However, for these firms to be able to scale-up, they need to overcome a number of risks, including those related to knowledge of target markets, product/technology development, financing, and team and execution capabilities.

Ontario has a broad network of cleantech accelerators that provide innovation and commercialization services to cleantech firms across the province. Ontario supports many of these cleantech accelerators, including the Centre for Research and Innovation in the Bioeconomy (CRIBE), Bioindustrial Innovation Canada (BIC), GreenCentre Canada (GCC), the Bloom Centre for Sustainability (BLOOM), Southern Ontario Water Consortium (SOWC), and the Water Technology Acceleration Project (WaterTAP).

Ontario is exploring opportunities to build on existing supports and better equip cleantech start-ups and scale-ups with the capabilities to overcome risks in the scaling up process. For example, Ontario will be leveraging its Global Trade Strategy, in collaboration with partners, to enhance export services and programming for cleantech companies. Ontario will also be working to improve access to global market intelligence, which can better inform research and development from the early stages of technology and product conception, as well as at later stages of technology development, innovation, and scaling up. Market intelligence can give entrepreneurs an edge over other competitors, by providing them with knowledge of niche global market opportunities for specific technology solutions.

With opportunities in those destination markets in mind, Ontario is also looking to strengthen the ability of cleantech companies to conduct research and development in-house or with expert service providers. With greater capacity to invent and innovate, companies can more nimbly respond to the needs of domestic and global markets.

At the same time, cleantech companies can get their products and services to market more quickly and easily if they understand the regulatory environment they will face. To decrease uncertainty – which can make it difficult to attract financing – and to help companies quickly find early reference customers here in Ontario, the province will be taking steps to provide companies with better information about the regulatory environment.

Cleantech companies also need the right talent to find the right market opportunities for their products and services. Ontario is exploring opportunities to support cleantech workforce development here at home – and through the federal Global Skills Strategy, companies can access talent from further afield as well. By promoting access to talent in sales, marketing, business development and scaling, Ontario believes companies can be better positioned for growth.

Access to capital

The cleantech sector is diverse - composed of a large number of different sub-sectors and technologies. Some technologies take significant time to come to market, may involve large capital costs, and/or may be quite risky as a result of their innovative approaches. Access to capital initiatives must take into account that technologies differ in their implementation costs, capital intensities and risk profiles. Accessing capital in a timely manner is also important for firms trying to scale up.

To improve access to capital for cleantech firms, Ontario made an anchor commitment of $55 million to develop new approaches to making equity investments in cleantech firms. In January 2017, the province established the Cleantech Equity Fund initiative, which will focus on providing venture capital to high potential, innovative Ontario-based cleantech businesses. The province has also established the Global Market Acceleration Fund (GMAF) to help Ontario-based cleantech companies mitigate risks of expansion by assisting with the costs associated with scaling-up production, inventory, distribution, and sales to support growing domestic and global demand.

Ontario is working to increase awareness of and access to federal funding opportunities available through partners such as Business Development Bank of Canada (BDC), Export Development Canada (EDC), Sustainable Development Technology Canada (SDTC), and others. Ontario will be exploring opportunities for partnerships where it makes sense to reduce any duplication.

Ontario is taking action to ensure that companies can easily access provincial and federal support at critical stages of business development, including scaling up. The province will be later reviewing the performance of new programming to assess gaps across the stages of business development. The focus will be on helping cleantech companies obtain the resources they need to develop their technologies and services to meet both domestic and global demand.

Regulatory modernization

While new venture and scale readiness supports will focus on improving cleantech companies’ knowledge and navigation of regulations, Ontario is also modernizing the regulatory environment itself to facilitate faster and broader adoption of new technologies. The province is committed to identifying regulatory issues that may be hindering the development and deployment of key technologies and then taking action to streamline the regulatory environment where possible.

In the past, Ontario has taken significant action to support cleantech firms by streamlining environmental approvals. In 2009, the province passed the Regulatory Energy Approvals (REA) regulation under the Environmental Protection Act to provide renewable energy projects with a single streamlined approval process. In addition, businesses and projects with less complex operations (e.g. small ground-mounted solar projects) may register themselves online on the Environmental Activity and Sector Registry (EASR) rather than having to apply for an Environmental Compliance Approval (ECA).

Furthermore, through the 2017 Long-Term Energy Plan (LTEP), the province has committed to addressing regulatory barriers that inhibit innovation in the electricity distribution sector. For example, the province has been engaging with its agencies and the energy storage industry to review and amend the regulations, codes, and rules that create barriers for energy storage technologies. By addressing these barriers, Ontario is creating the environment for utilities to invest in technologies that improve efficiency, lower costs, and provide more choice to customers.

Ontario will also be working with industry to identify top clean technologies that are encountering regulatory barriers to development and/or deployment – particularly those needed by large industries to reduce their greenhouse gas emissions. The province will then move forward with further streamlining environmental approvals for identified technologies, where appropriate. Ontario will also seek opportunities to develop performance-based standards, where possible, to encourage cleantech innovation. Working with partners, Ontario will also focus on harmonization with global standards and best practices.

Adoption and procurement

Ontario has strong research capabilities in the early stages of cleantech innovation, and this strategy places a renewed focus on continuing Ontario’s strong performance as these innovations move towards commercialization and market deployment. Ontario will be increasing opportunities for cleantech firms to pilot and demonstrate their technologies at scale as well as to support industry in adopting clean technologies.

To improve partnerships and increase the uptake of new technologies, Ontario will facilitate the demonstration of innovative cleantech solutions to de-risk and validate these technologies. For example, the recently announced Low Carbon Innovation Fund will help researchers, entrepreneurs, and companies create and commercialize new, globally competitive, clean technologies that will help Ontario meet its greenhouse gas emissions reduction targets. This fund will provide support for proof-of-concept and prototyping projects as well as for pre-commercial demonstration projects. Projects such as these will help cleantech entrepreneurs by creating reference customers, attracting follow-on investment, and accelerating time to market.

In the 2017 LTEP, Ontario signaled its intention to fund international demonstration projects to help Ontario’s innovative energy companies diversify to foreign markets. The province also committed to renew and enhance the Smart Grid Fund, which was originally launched in 2011. The renewed Smart Grid Fund will continue to encourage jobs and growth by investing in projects that demonstrate the value of cutting-edge technologies on our electricity grids. In addition, the program will also focus on building a culture of innovation within the electricity utility sector and explore ways to help the business sector grow and mature so it can succeed both domestically and abroad. Combined with Ontario’s efforts to reduce regulatory barriers to grid modernization, the Smart Grid Fund will explore and advance the technologies that will make our systems run more efficiently at a lower cost, giving customers more choice while also setting Ontario as an international smart grid leader.

Ontario has also made significant investments to help businesses adopt the clean technologies they need to reduce greenhouse gas emissions. The province provided $74 million from the Ontario Green Investment Fund toward TargetGHG, a program offered through the Ontario Centres of Excellence to seed the development of novel clean technologies, while stimulating the adoption and uptake of these technologies within key industrial sites. Ontario also invested $25 million from the Ontario Green Investment Fund in the SMART Green program. This program is designed to assist businesses to invest in equipment and process upgrades including high-efficiency ovens, dryers, kilns and furnaces. These upgrades will improve the competitiveness of Ontario’s small- and medium-sized manufacturers and help to reduce their energy consumption. Through the Green Ontario Fund, the province will also provide programs and rebates to help reduce energy costs in homes and businesses, including through the adoption of clean technology.

Procurement in Ontario can provide cleantech companies with early reference customers, securing a launch pad for broader adoption and global growth. Through the Green Focus on Innovation and Technology program (GreenFIT), Ontario will seek to leverage government buying power to demonstrate the performance of clean technologies by piloting projects at provincial facilities. Ontario will also focus on working with other levels of government and the broader public sector, where possible, to broaden procurement efforts and ensure that Ontario companies have access to opportunities for first customers close to home. Feedback from these early customers can help drive further innovation, business development, and investment – making sure that Ontario cleantech companies and their technologies are well-positioned to succeed in global markets.

Future of cleantech in Ontario

Ontario is committed to positioning our cleantech sector to capture the global opportunities that are currently within reach – and those that lie ahead. The growth of the clean technology sector can be facilitated by private and public sector focus on the four pillars. As we move forward with implementing Ontario’s Cleantech Strategy, we will focus on how these four pillars work in tandem to best facilitate sector growth.

The decision to accelerate the growth of our clean technology sector today and over the next few years will determine our ability to transition to a low carbon economy, as well as the future course of economic growth in Ontario, not only in the cleantech sector but also across our economy.