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Ottawa to enhance opportunities for clean-tech firms in procurement strategy

The federal government is determined to incorporate clean-tech technologies in its overall procurement strategy, promising to award extra points for bidders who include such innovation in their proposals. (Canadian Solar Inc.)

Ottawa spends $23-billion annually on procurement and is working on a series of measures to enhance participation of the clean-tech sector, including a set-aside for small- and medium-size businesses and bonus points for using innovative technologies, Arianne Reza, assistant deputy minister for public services and procurement Canada, said on Wednesday.

Ms. Reza was one of several officials from departments and Crown corporations who provided details to an industry gathering on how the government is moving to increase financing for companies that expand their environmental-technology businesses, and to help provide access to markets at home and abroad.

The Liberals allocated about $1.8-billion in the March budget to assist commercialization and market penetration for companies in the clean-tech sector, a broad category that includes companies involved in renewable-energy systems, energy-efficiency technologies and waste-treatment facilities.

A recent report from Analytica Advisors concluded that, on average, companies in the sector are not profitable, with the exception of those that generate clean power, and that many could not obtain financing – notably from private-debt markets – to meet the demand for their products.

Government support has tended to focus on early-stage research and development, leaving a major gap as companies move from the startup phase to commercial scale-up.

“To date, Canada has been focused on invention rather than innovation,” said Leah Lawrence, president of Sustainable Development Technology Canada, which was hosting the conference. “If it doesn’t scale up, it doesn’t matter – it’s just a hobby.”

Federal procurement is a key means by which maturing technology companies can build sales and scale up their efforts, said Frank Des Rosiers, assistant deputy minister at Natural Resources Canada. Over all, government procurement in Canada is worth about $148-billion, and many provinces and municipalities are also key customers for the clean-tech sector as they look to reduce greenhouse-gas emissions from their own operations, Ms. Reza said.

But access to capital remains a challenge for companies that often have high upfront capital requirements and little commercial track record. Export Development Canada (EDC) and Business Development Canada (BDC) have mandates to provide commercial-stage financing for clean-technology companies and officials said they are prepared to look beyond traditional banking metrics in assessing the creditworthiness of customers in the sector.

“We do and we will have a larger appetite for risk,” said Susan Rohac, vice-president at the BDC. Companies must still demonstrate commercial viability “but we are prepared to stretch,” she said.