Cleantech Startups 101 – MP Jonathan Wilkinson
As part of our ongoing “Cleantech Startups 101” blog series, this week we sat down with Jonathan Wilkinson, North Vancouver MP and Parliamentary Secretary to Catherine McKenna, Canada’s Minister for Environment and Climate Change.
Jonathan is also a successful cleantech executive – having served as CEO of QuestAir Technologies and BioteQ Environmental Technologies and as Senior Vice President of Business Development with Nexterra. He is also a former Foresight Executive in Residence (EIR).
The federal government has earmarked $300m for cleantech, can you tell us how and when these funds will be disbursed?
JW: You will likely see some of that money reflected in the federal budget in late February or early March. In our campaign platform we committed $100m to go towards developing clean technologies, potentially through vehicles like Sustainable Development Technology Canada (SDTC) and $200m to be used to support the adoption of cleantech in the resource sectors. However, our support for the cleantech sector likely won’t be limited to $300m. You’ll also see things that are related to cleantech getting some attention, such as investments in basic science as well as export development. A good example is the recently-announced CanExport program, which has been set up to provide support to small and medium-sized enterprises (SMEs) and help them understand how to reach new markets.
Why is cleantech a priority of the federal government?
JW: We see cleantech as being significantly impactful in two ways. First, it will help us achieve our greenhouse gas (GHG) reduction targets in the short and long term. Second, it can be a very significant source of economic growth and job creation as we and the rest of the world start to transition towards a future lower carbon economy.
How will you ensure that the federal mandate is carried out at the provincial and territorial levels?
JW: Different provinces have taken different approaches to developing the cleantech industry and, more broadly, to developing carbon pricing. Part of our role is to ensure that we don’t replicate the great work that has already been done, and to make sure that the provinces are talking to – and have the opportunity to learn best practices from – each other. For example, BC offers a tax credit to angel investors that has been quite effective. There is no point in replicating this work at the federal level, but it may be a useful policy for the federal government, other provinces and the territories to consider. Ultimately we want to engage in robust conversations with the provinces and territories that lead to the best possible public policy.
We also need to develop an integrated end to end strategy – one that clarifies the role that each federal government department is going to play in supporting the development of the cleantech industry. We also need to be clear about what tools we’re going to use – whether that means SDTC and possibly new mechanisms – and how we’re going to use them. Certainly one of the gaps for cleantech entrepreneurs has been the ability to secure relevant financing for the first few commercial applications. Typically, they can’t access bank debt because they don’t have multiple products in the field for an extended period of time. We need to develop a strategy to address this issue and then work with the provinces to coordinate and support what they’re doing.
What is the federal government’s vision for the cleantech sector in Canada – do we want to continue to build companies until they’re big enough to be acquired, or do we want to build a $100million, or even a $1billion, company?
JW: We definitely want to build an environment in which cleantech companies can grow and prosper right here in Canada. The development of a number of large anchor companies is critical to ensuring that we have a sustainable cleantech ecosystem.
Our economy – and the world economy – is on the brink of starting to transition towards lower carbon energy sources. The cleantech sector represents one of the ways in which Canada can capitalize on the global shift towards a lower carbon economy, start to diversify and capitalize on some of Canada’s strengths.
There are a number of things that need to happen to make this a reality. We need an integrated approach for supporting cleantech companies throughout the development cycle, from early stage to later stage. We need to ensure we have access to talent by working with universities so that they can be active participants. We need to ensure that our immigration system enables companies to access specialist talent and to bring the best and brightest to Canada. We need to have a consistent framework and expectations around commercializing cleantech ventures – taking into account funding options, tax credits, accelerator networks, and so on – so that we create more certainty for our investment community. We also need to ensure our cleantech entrepreneurs have access to capital and that we provide access to new markets through trade arrangements – so that our small and medium size entrepreneurial businesses have the support they need to navigate these markets.
Finally, we need to create an environment where people can commercialize their products at home, here in Canada. Traditionally we have been quite conservative when it comes to cleantech innovation. Our governments and companies have not jumped to be the first adopters. I’d encourage Canadian companies to be more entrepreneurial and be a “first buyer”. I’d encourage governments to determine how they can use their procurement power to assist.
We know that there is huge upside to supporting the cleantech sector with respect to economic growth, jobs, etc. How will Canadian firms capture a share of the global cleantech market?
JW: The Canadian government has started to use our trade commissioners in a more effective way. We’re making sure they’re up to speed on our cleantech industry and in a position to look for opportunities in other jurisdictions. Through mechanisms such as the trade commissioners we can help Canadian cleantech entrepreneurs navigate markets like China and India, where it can be a little mystifying for a start-up with little international experience.
In addition to market intelligence, many Canadian companies have concerns about intellectual property (IP) in these markets. The Canadian government can potentially assist by taking a leadership role in working to establish a government-to-government framework that would reassure tech companies that their IP will be respected.
Based on your experience in the sector and as a former Foresight EIR, if you were to give one piece of advice to cleantech entrepreneurs in Canada, what would it be?
JW: Canadian entrepreneurs need to be willing to take risks – measured and thoughtful risks. Be open, and make use of tools and resources like Foresight, which is an organization of people who have been to the “valley of death” and back. Most entrepreneurs run into very similar pitfalls, so being able to tap into experienced executives at Foresight or through the use of advisory boards can help you navigate them – or even better, avoid them altogether. You might have the best idea, but unless you reach out to folks who have learned the lessons and have insights to share on how to navigate some of the common challenges, you may not be able to grow your business to its full potential.
Jonathan will be the opening speaker at a special Foresight event at the GLOBE 2016 Conference and Innovation Expo in Vancouver, B.C., on March 2nd at 12:30 pm. For more information on the “Foresight-ARCTIC showcase: Fast tracking cleantech innovation in the resource sector” click here.