• Advantage Canada -- Only at the Olympics?
  • March 19, 2010 | Author: Randy Williamson
  • Law Firm: Aird & Berlis LLP - Toronto Office
  • Now that the Olympics are over, I've starting reading the newspaper again. I was particularly drawn to The Globe and Mail's cover story this morning. The Harper government's Throne Speech and budget this week are expected to refer to the Tories' 2006 Advantage Canada economic policy blueprint -- with a focus on efficiency and productivity strategies. (Interesting that immediately after Canada leaves it "Own the Podium" strategy behind, we hear about Advantage Canada and a 2008 economic report called "Compete to Win")

    These strategies interest me particularly as they relate to technology investing in general, and investments in clean technology and renewable energy companies in particular -- an area that I focus on at A&B. And, a couple of events I was involved in last month have me wondering how the Advantage Canada strategy may relate to this sector.

    Early last month I moderated a conference put together by the Toronto Atmospheric Fund (full disclosure -- I am a director of TAF) to help Toronto's high-rise building owners, managers and developers share knowledge on renewable energy and energy efficiency. I was amazed at the breadth of techniques and technologies that are being contemplated or employed by some of these owners to make their buildings more energy efficient. Later in the month I co-hosted with Peter Matutat, National Emerging Company Practice Leader for PricewaterhouseCoopers LLP, the latest in our series of roundtable discussions for executives of clean technology companies, "Funding Cleantech Companies for Growth." The TSX has been our gracious host for these lively discussions among some of the leading developers of the most productive and efficient clean technologies that Canada has to offer.

    While both of these events reminded me how innovative technology companies and technology users are in Canada, some statistics discussed at the cleantech executive roundtable also worried me. The day before the roundtable, the Canadian Venture Capital & Private Equity Association released its annual statistics on venture capital investing in Canada -- a clear indicator of how focused private and public (government) investors are on productivity. Unfortunately, unlike at the Olympics, Canada doesn't seem to be improving its position. 2009 represented the lowest level of venture capital investing in 13 years, with only $1 billion invested. Similarly, only about $1 billion in new venture capital funds was raised, the lowest level in over a decade. In the realm of clean technology investing, a sector that is expected to have literally trillions invested in it around the world over the next two decades, things sounded equally bleak. In 2009, only about $100 million was invested in the sector, in a grand total of 21 companies. Hardly a recipe for innovation and productivity! In fact, according to this morning's The Globe and Mail article, the Conference Board recently ranked Canada 14th among 17 peer countries in its innovation report card.

    While governments can't (and shouldn't) make decisions for investors to back the technologies of these great developing Canadian companies, they can directly and indirectly help increase the size of the investing pie. And where federal and provincial governments have created several new investing funds over the years, government policy and administration influences how difficult it will be for companies with promising technologies to access these funds. Raising capital for new technologies shouldn't be easy, and entrepreneurs with great ideas will always find a way to raise just enough capital to survive (as have a few of my clients in the last couple of months) until investors and customers interests can catch up with the value of their products and services. But how hard should it be?

    We heard the refrain of athletes for decades about how a little investment in them would pay substantial rewards in their performance on the world's sporting stages. We have seen over the last couple of weeks how right they are. Here's hoping that this week's Throne Speech and budget include similar "Own the Podium" initiatives for Canada's developers of innovating and productive technologies.