Unlocking Canada’s Clean Technology Leadership

By: 71 members of the Canadian clean and environment tech producer, venture capital, investment, R&D, LDC and energy efficiency communities and two industry associations

Submission to the Government of Canada – Budget 2025 Shape

Introduction 

Canada today is at a crossroads. We face two massive risks to our sovereignty and our security: climate change, and U.S. industrial policies. Arguably, these risks are greater than even those posed by World War II – a moment when Canada rallied a whole-of-nation effort to meet and overcome unprecedented threats. This moment demands no less. 

True nation-building requires a whole-of-government response that delivers both near-term security and long-term opportunity: Securing careers that will be sustainable for the next 30 years and building the industries of the coming century – rather than losing them to jurisdictions, including the United States, whose policies are more aggressively aligned to attract them. 

The clean technology sector already contributes more than $80 billion to our economy and supports tens of thousands of high-value careers. Yet Canadian companies are increasingly pulled abroad by faster, more generous foreign incentives. Without immediate and impactful action, Canada risks losing innovators, intellectual property, and manufacturing to other countries who treat this emerging market as central to their economic and national security strategy. 

We must view all investments in critical infrastructure through a dual lens: meeting today’s needs while advancing the industries of tomorrow, improving both economic resilience and environmental outcomes. Spending on affordable housing, defence, northern and remote infrastructure, and water security – especially for First Nations – also creates opportunities to leverage Canadian clean and environmental technologies uniquely designed for harsh, cold-climate environments which would serve to maximize the impacts of the spending by furthering Canadian industry and extracting maximum value from solutions best suited to our environment.   

Purpose 

The clean-tech and environment-tech industry world wide is at a tipping point.  Without immediate action, Canada risks losing its innovators, intellectual property, and manufacturing base to competitors who treat clean technology as a core element of their economic and national security strategy. Conversely, with immediate action, Canada can create a global presence and long-term stable careers that also contribute to slowing climate change and our defence commitments.   

This submission sets out a practical roadmap for Budget 2025 to: 

  • Close the competitiveness gap with the United States and other trading partners, 
  • Unlock billions in private and institutional capital to scale Canadian firms, 
  • Secure supply chains and protect Canada from Foreign Entities of Concern (FEOC), and 
  • Embed clean technology into every major federal investment-from housing and infrastructure to defence. 

These recommendations are not aspirational. They are the minimum actions required to ensure Canadian leadership in the rapidly growing global clean economy. 

Why Now 

The numbers speak for themselves: 

  • The global clean technology market is worth USD $916 billion now (2024) and will triple to over $2 trillion by 2035. 
  • Global clean energy investment will hit USD $2.2 trillion in 2025, more than double fossil fuel investment. 
  • Canada’s clean economy already generates CAD $80 billion annually (3–3.5% of GDP) and USD $21.3 billion in cleantech revenues (2024), projected to double to $45 billion by 2030. 
  • But Canada controls only 2.3% of the global market, and companies are shifting operations abroad to pursue market opportunities elsewhere to access faster and more generous U.S. programs. 

The choice is stark: Act now to lead, or continue to cede talent, investment, and IP to other countries.  Decisions for many Canadian companies on “where to grow” are imminent.  

Our Asks – Budget 2025 Priorities 

We call on the Government of Canada to: 

1) Strengthen Investment Tax Credits (ITCs) 

  • Legislate all pending ITCs immediately-biomass, electrification, EV supply chains, CCUS manufacturing, and all nuclear generation. 
  • Match the U.S. with “adders”: +10–20% for Canadian-made content, low-income areas, and transitioning communities. 
  • Enable transferability so credits can be sold, unlocking new private investment. 
  • Adopt the 80/20 reuse / repowering rule so projects with recycled or second-life components qualify. 
  • Extend the definition of “clean tech” to include all innovative technology that has climate / environmental impacts (e.g. prop-tech, ag-tech, blue (water) tech, nature-tech) 
  • Extend the eligibility for Accelerated investment incentives for CCA 43.1 and 43.2 beyond 2028 and allow for 75-90% year one write-offs of Made-in-Canada clean tech 
  • Make ITCs refundable for non-profits so communities and co-ops can lead projects. 
  • Do not penalize Canadian innovation/procurement programs: carve out federal pilots and similar supports from “government assistance” that would otherwise reduce ITCs. 
  • Clarify second-life EV battery repurposing eligibility (e.g. cells / modules / packs into stationary storage) and ensure battery manufacturing, battery recycling and CCUS manufacturing equipment qualify. 
  • Remove restrictive interpretations that block waste-heat recovery (including wastewater). 
  • Direct CRA to use risk-based reviews, not blanket 100% audits, to provide certainty at investment pace. 
  • Reform carbon intensity (CI) methodologies for CH-ITC calculation to ensure provincial equity 
  • Adopt technology-neutral, emissions-based eligibility of the CH-ITC and expand it to include all clean fuel production equipment 

2) Modernize SR&ED 

  • Expand the definition of “clean tech” to include all “tech” that has a substantial positive environmental / climate impact (e.g. ag-tech, prop-tech, blue (water) tech, nature-tech) including related digital efficiency technologies 
  • Raise the limit to $6 million and reinstate capital expense eligibility. 
  • Clarify definitions e.g. “predominantly” means 50–60%, not 95%. 
  • Allow proportional claims for workers and work that is >50% / substantially R&D 
  • Train CRA auditors and end blanket 100% audits of every claim 
  • Guarantee speed: process 95% of claims within one month. 
  • Delivery enhancements: prioritize claims tied to pilots, demonstrations, and first-of-kind deployments to bridge the scale-up “valley of death,” and standardize and reduce documentation templates for SMEs. 

3) Use Federal Procurement as Industrial Policy 

  • Buy Canadian tech first in housing, defence, and infrastructure. 
  • Reduce requirements (e.g. company size, longevity etc.) for Canadian corporations 
  • Encourage Municipalities and others using federal funds to do the same 
  • Tie procurement to domestic manufacturing and supply chains. 
  • Replace foreign AI / software in government with Canadian climate-tech solutions. 
  • Reform procurement approach to consider “TCO” (total cost of ownership) in all procurement decisions, including energy use, transportation, maintenance, repair, and disposal costs, post-use circular economy options – not just the initial purchase price 
  • Deploy procurement tools that unlock scale: 
  • Apply Fully Burdened Cost of Fuel (FBCF) in defence to price logistics risk and energy resilience-favouring Canadian cold-climate power, storage, and controls. 
  • Use long-term offtake, framework agreements, and performance-based contracts to crowd in private capital for lines and tooling. 
  • Create repeatable pilot → pre-commercial → scaled procurement pathways so proven Canadian solutions graduate quickly into standard buys. 
  • These actions also help Canadian companies demonstrate their capabilities to world markets – competitive markets that do prioritize domestic suppliers, and thus assume Canadian companies without their own government as customers are less than reliable suppliers.  

4) Fund Manufacturing Competitively 

  • Open the Strategic Innovation Fund to mid-scale projects ($5–20 million). 
  • Match U.S. cost-shares (up to 100% where strategic). 
  • Include capex across programs. 
  • Add domestic-content bonuses to keep manufacturing in Canada. 
  • Program delivery: set a ≤ six-month decision target for scale-up manufacturing files; align NRCan, IRAP, and NGen so mid-scale projects can combine tech validation and capex without gaps or duplicate reviews. 
  • Support domestic production of efficiency technologies, including high-performance windows, insulation, smart building controls, and cold-climate heat pumps, ensuring Canadian supply for Canadian projects. 

5) Leverage Existing Investment Vehicles to Catalyze Private Capital 

  • Canada has already established a suite of public investment vehicles, such as VCCI, the Canada Growth Fund, BDC, EDC, FCC, that can and should be more strategically aligned to catalyze the growth of Canadian clean technology firms. 
  • Budget 2025 should dedicate a significant share of these commitments specifically to Canadian climate technology venture and growth funds, including emerging managers who are often the sector specialists closest to early-stage innovators, ensuring that public dollars anchor domestic companies, unlock private capital at scale, and prevent the loss of high-potential firms to foreign markets. 

6) Provide export incentives without domestic revenue requirements 

  • Remove revenue-based thresholds that prevent early-stage firms from accessing trade financing, market development funds, or support for foreign pilots, especially for first-of-kind and dual-use technologies. 
  • Shift Eligibility to R&D and Partnerships: Base program eligibility on domestic R&D activity and credible export partnerships, rather than revenue floors, to ensure access to trade financing, market development funds, and foreign pilot support. 

7)  Prioritize Energy Efficiency as a Catalyst of Canada’s Clean Economy Strategy 

Energy efficiency is Canada’s first and most powerful clean technology. It is the fastest, lowest-cost way to cut emissions, lower energy bills, and reduce strain on our electricity system. Every dollar invested in efficiency returns multiple dollars in economic benefits—through household savings, business competitiveness, avoided infrastructure costs, and thousands of good local jobs. 

Budget 2025 should recognize energy efficiency as a catalyst of Canada’s clean economy strategy by: 

  • Making efficiency the first investment lens across housing, infrastructure, and defence projects, ensuring that every federal dollar delivers maximum long-term value through lower operating costs and emissions. 
  • Expanding investment tax credits to cover deep building retrofits, industrial efficiency upgrades, and smart energy management systems. 
  • Leveraging procurement to retrofit federal buildings, defence bases, and community facilities with Canadian-made cold-climate efficiency solutions—from advanced insulation to high-performance heat pumps. 
  • Scaling workforce development for skilled trades in retrofits and energy management, creating sustainable careers across all regions of the country. 
  • Integrating digital efficiency technologies such as demand-side management, building analytics, and AI-driven grid optimization into SR&ED eligibility to strengthen innovation in this critical field. 

Energy efficiency multiplies the impact of every clean technology infrastructure investment. By reducing demand, it makes renewable power and clean manufacturing go further, while improving energy security in northern, remote, and Indigenous communities. Treating efficiency as infrastructure ensures that Canada not only builds the industries of tomorrow, but also locks in permanent savings and resilience for decades to come. 

8) Streamline Permitting & Land Rights 

  • Create single-window authorities at federal / provincial levels. 
  • Standardize land-rights frameworks across federal, provincial, and First Nations jurisdictions. 
  • Offer risk-sharing mechanisms (e.g., guarantees/insurance) to lower financing costs. 
  • Predictable, bankable pathways: publish service-level standards for key permits/consultations with transparent tracking; co-develop model land-access and benefit-sharing templates to reduce time-to-FID (Final-Investment-Decision) while respecting rights. 

9) Embed Cleantech in Every Budget Line 

  • Housing: prioritize clean technology solutions and full cost accounting in buildings (e.g. mandate net-zero cement, mass timber, and advanced systems etc.). Mandate energy efficiency first in all federal housing investments, through deep retrofits of existing buildings and net-zero standards for new construction, ensuring long-term affordability and emissions reductions. 
  • Defence: prioritize clean technologies and dual use solutions such as clean water and energy solutions, e.g. Canadian cold-weather batteries, critical-minerals-safe supply, and sovereign controls/automation and others. Deploy advanced energy efficiency solutions in bases and operations, from high-performance building systems to efficient logistics and cold-climate heating, reducing resupply risks and strengthening energy security. 
  • Trade & infrastructure: require climate-smart procurement across all projects with full cost accounting and life cycle assessments. . 
  • Sovereignty & dual-use: prioritize FEOC-safe batteries, controls, and communications; elevate Canadian cold-climate solutions for Arctic/remote deployments to create exportable, dual-use platforms. 

10) Treat Energy and Manufacturing as National Security 

  • Anchor policy in FEOC-safe supply chains. 
  • Deploy Canadian-made cold-climate solutions in the Arctic, Indigenous communities, NORAD stations, and ports. 
  • Position Canada as a reliable exporter to allies. 
  • Priority designation: treat critical cleantech manufacturing (cells, packs, power electronics, thermal management, grid controls) as priority national-security industrial capacity for expedited, cross-departmental support.  
  • Reduce demand through energy efficiency to strengthen energy sovereignty, lowering dependence on imported fuels and easing pressure on grid capacity in Arctic, remote, and Indigenous communities 

11.  Create a funding mechanism for First of a Kind (FOAK) demonstration: 

  • The NRC IRAP Cleantech Program (NICP) has huge gaps relative to legacy programing 
  • Ensure funding is available through NICP or an alternative vehicle for FOAK capital assets- cleantech is hard tech, not just soft costs 
  • Ensure funding beyond a $2 million or even $10 million cap is available through NICP or an alternative vehicle for demonstration of capital intensive cleantech solutions 
  • Ensure consortiums for FOAK demonstrations are formed through NICP or an alternative vehicle to leverage private funding and ensure aligned commercial pull for new technologies 
  • If NICP is not able to fit such programming, set up an alternative vehicle possibly through the proposed Canada Innovation Corporation blueprint that was published in 2023 or even a new entity with rigorous governance but with greater agility than might be the case if housed in a government department.    

Conclusion 

Canada’s cleantech sector already generates $80B in GDP and $21B in annual revenues, and aa great deal more when other environmental focused technologies are include, but we are underperforming. With Budget 2025, Canada can look to: 

  • Triple its global market share, 
  • Lock in resilient supply chains, 
  • Create tens of thousands of high-value jobs, and 
  • Establish itself as an environment-technology superpower. 

Global capital is moving fast. If Canada does not act now, we will lose our innovators and our place in the clean economy. The time for decisive action is today. 

On this, August 28th, 2025, we, the following 71 members of the Canadian clean and environment tech producer, venture capital, investment, R&D, LDC and energy efficiency communities and two industry associations stand ready to work with you to build the clean economy of the future: 

The Ontario Clean Tech Industry Association (OCTIA)  

EcoTech Quebec (Quebec clean tech industry association)  

                                          – and – 

Jeff Addison : President, Trimble Park Capital 
Mo Algermozi : CEO, GIT Coatings 
Maike Althaus : Vice-President, Canadian Hydrogen Association 
Mike Andrade : CEO, Morgan Solar 
Behdad Bahrami : CEO, Edgecom Energy 
Celine Bak : President, Analytica Advisors Inc. 
Dr. Kody Baker : Director, Stealth Clean Tech Start Up 
James Brady : VP of Finance, Moment Energy 
Dr. Martin Bureau : Principal Consultant, Martin Bureau Innovations 
Christopher Burtch : CEO, Crosswinds Hydrogen Inc. 
Grace Cannon : President & CEO, Hydrogen In Motion Inc. (H2M) 
Ranah Chavoshi : CEO, PhyCo Technologies Inc. 
Edward Chiang : CEO, Moment Energy 
Shivani Chotalia : Founding Partner, CleanAI Initiative 
Dr. Mita Dasog : Clean Tech R&D, Dalhousie University 
Dr. Phil De Luna : CCUS veteran & Carbon X Prize award winner, Stealth Clean Tech Start Up 
James Dean : CEO, Oxygen8 
Dr. Ron Dembo : CEO, riskthinking.ai 
Audrey Dépault : Director, Energy & Transportation, Sussex Strategy Group 
Ron Dizy : CEO, Rethink Climate 
Mohammad Doostmohammadi : CEO, pH7 Technologies 
Simon Doray : President, INNOLTEK 
Guy Drouin : CEO, Biothermica Technologies Inc 
Isabelle Dube-Cote : President and CEO, Ecotech Quebec 
Judy Fairburn : Co-Founder, General Partner, The51 
Aaron Freeman : Managing Partner, Pivot Strategic 
Sebastien Gendron : CEO, TransPod 
Danial Hadizdeh : CEO, Mitrex 
Matt Harper : President, Invinity Energy Systems 
Dr. Alex Ip : CEO, CERT Systems 
Maciej Jastrzebski : President, Principal Consultant, MetPro Consult 
Darren Jones : CEO, MyHEAT Inc. 
Joanna Klimczak : Co-Founder, Women in Climate Finance 
Jessica Krushkowski : Managing Director,  
Martin Larocque : CEO, Electro Carbon 
James Larsen : CEO, e-Zinc 
Jean Luc Lavergne : CEO, Lavergne Groupe 
Marianne Lépinoit : CPA, N/A 
Stephen MacDonald : President and CEO, EfficiencyOne / Halifax Climate Investment, Innovation and Impact (HCi3) Fund 
Audrey Mascarenhas : President and CEO, Questor Technology Inc 
Peter McArthur : Chair, Ontario Clean Technology Industry Association (OCTIA) 
Trish Nixon : Venture Partner, Amplify Capital 
Liz O’Connell : CEO, Arolytics Incorporated 
Nicholas Parker : Founder, CleanAI Inc. 
Brent Perry : CEO, Net Zero Renewable Solutions 
Gavin Pitchford : Executive Director, Canada’s Clean50 Awards 
Rashmi Prakash : CEO, Aruna Revolution Health Inc 
Patrick Racine : CEO, ChillSkyn 
Tom Rand : Founding Partner, ArcTern Ventures 
Dr. Ramtin Rasoulinezhad : CTO, MBT 
Jason Robinson : CEO, Evoco ltd 
Susan Rohac : Managing Partner, Climate Tech Fund, BDC (retired) 
Sean Rudd : Founder & CEO, Korotu Technology Inc. 
Sabina Russell : VP, HTEC 
Anthea Sargeaunt : CEO, 2S Water Inc. 
Dr. Natalie Schmitt : Founder/CEO, WildTechDNA 
Karen Schuett : CEO, Livestock Water Recycling 
Dan Seto : CEO, CircuitMeter Inc. 
Sheida Shahi : CEO, Adaptis 
Dr. Vicky Sharpe : President, Sharpe Enterprises 
Grant Smith : CEO, Pond Technologies Inc. 
Greg Stewart : Chairperson, GreenSky Ventures 
Jason Switzer : Independent Director, various 
Dr. Peter Tsantrizos : CTO, Terragon Environmental Technologies Inc. 
Dr. Wal van Lierop : Founding Partner, Chrysalix Venture Capital 
Els Vanbeckevoort : CEO, SanEcoTec Ltd. 
Peter Vinall : CEO, SUSTANE Technologies Inc. 
Christopher Wai : CEO, Sixone Labs Ltd 
Bryan Watson : Managing Director, CleanTech North 
Geri Yin : VP, GRE&T Centre, Alectra Utilities 
Laura Zizzo : Founder and CSO, Manifest Climate Inc. 

August 28th, 2025 

Emails / contact information for all of the above signatories upon request