Social Policy in Ontario

A good idea, badly executed, can do enormous damage.

Dalton McGuinty’s green energy strategy, unfortunately, falls into that class. The vision made sense. The rollout was costly and ill-conceived. It drove up electricity prices, undermined public support for wind and solar power, riled rural Ontarians and left a trail of aggrieved investors and producers.

No one watched the debacle with more dismay than Céline Bak, one of the pioneers of Canada’s rapidly growing clean technology sector. She almost single-handedly put the $11.3-billion industry on the map; convinced Statistics Canada to pay attention; raised millions of dollars for start-ups; and helped innovative Canadian firms crack international markets.

The clean tech sector — which includes much more than renewable energy — was side-swiped by MGuinty’s bungled project and its legacy of ill will.

The backlash hit just as Canadians were beginning to realize thousands of small and medium-sized firms were springing up, manufacturing everything from high efficiency heat pumps to recyclable bio-plastics. At the very moment the sector was trying to introduce itself as “Canada’s first new industry in the 21st century,” its story was eclipsed by Ontario’s green energy imbroglio.

But it’s a story worth telling.

• The clean technology industry now employs more Canadians than the aerospace industry, the pharmaceutical industry or the forestry industry. Last year it created 2,300 new jobs, bringing the total to 41,000.

• It is a young industry. Only a few clean tech companies existed before the year 2000.

• Ontario is its heartland. Thirty-five per cent of the country’s clean tech firms are here.

• It is an outward-looking industry, generating approximately $5.8 billion inexport revenues.

• Its employees are well-paid, allowing them to support their healthy communities and strengthen the nation’s economic fabric.

• It invests more in research and development than any other industrial sector.

• It is a resilient industry. It kept growing through the 2008-2009 recession and the fitful recovery that followed.

• It does not compete with other sectors; it complements them. It builds solutions to the challenges they face as climate change forces them to extract, manufacture and transport their products more sustainably.

• And it is not dependent on government handouts. Domestic clean tech firms watched with disbelief as McGuinty struck a $7-billion deal with South Korean giant Samsung to build wind turbines and solar equipment to produce heavily subsidized electricity in Ontario. They could have done the job at lower cost, keeping the profits at home.

For a province whose smokestack industries are shrinking or closing and auto assembly plants are under increasing pressure from low-wage countries, clean technology has the potential to revitalize manufacturing. It has all the characteristics that policy-makers say they want. It is innovative, highly productive, creates good jobs and punches above its weight internationally.

Three impediments are holding it back.

It has a very low public profile. Most Canadians have no idea a new industry, fuelled by brainpower, has taken root in their midst.

It is struggling to get out of the shadow of Ontario’s bungled green energy experiment.

Its lack of visibility and easily identifiable products like airplanes or drugs or smartphones makes it difficult for clean technology companies to obtain venture capital, limiting their growth.

But the landscape is changing. Last week’s announcement by Cisco Systems, naming Toronto as one of four global innovation hubs (the only one in North America), could be the break the industry needs. “It is a very exciting development,” Bak said. “It will create a rich ecosystem for these companies to operate in. It will provide opportunities for collaboration on transportation, energy and water.”

Some fledgling companies will be acquired by the Silicon Valley giant, she acknowledged, but those with deep roots and revenues of more than $100 million a year are likely to form partnerships with Cisco, becoming part of a network of urban innovators transforming the way cities work and people live.

Ontario’s green energy misadventure won’t be soon forgotten; certainly not while electricity rates in the province remain higher than those in any neighbouring jurisdiction. But it will fade. And people’s focus will widen beyond wind turbines and solar panels.

What they’ll find is that the rebirth of manufacturing — without the smokestacks, the big subsidies or the oversized carbon footprint — has already begun.

< http://www.thestar.com/opinion/commentary/2014/03/10/manufacturing_rises_from_the_ashes_goar.html >