StatsCan data show cleantech contributing to GDP

Environment and cleantech products make up 3% of GDP and drive demand for jobs

Environmental and clean technologies are contributing to the Canadian economy, accounting for 3% of the gross domestic product and employing more than a quarter of a million, according to the first ever set of data released by Statistics Canada last month.  The contribution of environmental and clean technologies to the Canadian economy has been fairly stable at 3% over the 10-year period, increasing by only 0.1 percentage point to 3.1% in 2016 from 3% in 2007.

The environmental and clean technology data cover 10 years – from 2007 to 2016. Aside from measuring products and related services produced by environmental and clean technology, the data also include products on clean energy and waste management to make up the environmental and clean technology economic accounts (ECTPEA) or the environmental and cleantech GDP.

Canada is the first country to release data on the impact of environmental and clean technology products on the economy with the hope that such data could help in policy and decision making, particularly with innovation investments around cleantech.

"We're transforming data into insight to help us understand the environmental and social impacts of clean technologies on the Canadian economy — an important part of our vision for a clean, innovative economy that balances economic growth and environmental protection,” said Jim Carr, minister of Natural Resources Canada, in a statement.

Clean electricity produced from clean sources make up 43% of the ECTPEA while waste management makes up 12%. Excluding these two components, environmental and cleantech products make up only 1.4% of the GDP. The share of GDP for the sector from services, such as R&D, peaked at 51% in 2012.

In real terms, GDP of the environmental and cleantech sector grew 5.2% in 2016 compared to 2007. During the same period, the Canadian economy period grew 14.4%.

Environmental and clean technologies are also helping the economy through employment, according to the Statistics Canada data. In 2016, the two sectors employed more than 274,000 with average compensation of $92,000 compared to the economy-wide average of $59,900. Employment rose 4.5% compared to 2007 (see Environmental and Clean Technology Products Economic Account, Annual Employment below).

Sarah Petrevan, senior policy advisor at think tank Clean Energy Canada, says the release of data is welcome news to policy researchers and industry players as they provide a statistical baseline upon which informed decisions can be made. For industry players, it also helps them take advantage of opportunities available in the global market, particularly for low-carbon goods, for which the global market is estimated to be $5.8 trillion and projected to grow 3% annually.

Petrevan says data such as these help inform evidence-based decision making. “It means that the government can spend its money where it has the greatest impact,” she notes, adding that these data also show that government’s investments in cleantech are paying off.

“(For) the level of investments that the government makes in cleantech, proportionate to other industries, such as fossil fuel subsidies, the government of Canada gets a big bang for its bucks,” Petrevan tells RE$EARCH MONEY.

Canada is also seen as one of the champions for cleantech innovation. In a recent global index of innovation in cleantech, Canada improved its ranking to jump to 4^th place right after three Nordic countries – Denmark, Finland and Sweden, respectively. Canada was tops among the G20 countries with the US trailing right behind at rank five. Canada was ranked number one for funding availability and second for early entrepreneurship, according to the Cleantech Group 2017 Global Cleantech Innovation Index (GCII).

The federal government committed to invest up to $2.2 billion in the cleantech sector in Budget 2017. Another $14.5 million has also been invested to establish the Pan-Canadian Clean Technology Data Strategy as part of the Pan-Canadian Framework on Clean Growth and Climate Change.

Statistics Canada data also show that the export volume of environment and cleantech products increased almost 34% from 2007 to 2016, accounting for almost 2% of Canada’s total exports. Petrevan says this growth signals an opportunity for industry players to tap into the global market.

From a policy perspective, these data suggest that there is also opportunity for government to craft policies to encourage local demand. Petrevan points to a 2017 OECD report on Canada’s progress in environmental policy objectives where it was noted that Canada can help increase domestic demand for cleantech to boost innovation. According to the report, among the interventions that the government could enact are carbon pricing, green procurement and greening government operations.

The optimistic tone is consistent with a report on opportunities in climate-friendly technologies released by The Conference Board of Canada in July 2017. That report noted that Canada has export strengths in 17 climate-friendly technologies in renewable energy, energy efficiency and waste management. Canada is also leading in carbon capture and storage technologies, which represent another important market opportunity for Canadian businesses, the report added.

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