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Nuclear fusion startup General Fusion of Vancouver exemplifies B.C.'s culture of cleantech innovation.

Across Canada, roughly 700 companies make up the $9-billion cleantech sector. Most are in British Columbia, Ontario and Quebec, which also fetch a lion’s share of venture capital. The number of companies and venture investment per capita in each province is one way to measure each jurisdiction’s support for green innovation.

B.C. is home to 160 cleantech companies, representing 23 per cent of Canada’s total, according to Ottawa’s Analytica Advisors. The province’s green innovation strengths lie in transportation, renewable energy, fuel cells and smart grid technologies, reflecting the influence of utility B.C. Hydro and fuel-cell pioneer Ballard Power.

“B.C. companies have a long history in power management, including power conditioning and battery storage, while the province’s diverse geography and historic forestry industry support a range of alternative generation technologies such as wind, solar, biomass and tidal energy,” according to consultancy KPMG.

Celine Bak, a partner with Analytica, said long-term public investment in green innovations developed and spun out of B.C. universities has also played a major role. Another boost has come from the B.C. government’s Innovative Clean Energy (ICE) Fund, which since 2008 has contributed more than $72 million to 56 clean energy projects. In addition, the introduction of a provincial carbon tax in 2008 created opportunities for firms such as Nexterra, which helps industries reduce their carbon footprint by generating electricity from biomass.

Ontario, with 221 companies (31 per cent of the total), may lead the country in absolute numbers but still lags B.C. when measured per capita. Even so, it has been most successful at attracting venture capital for its green-themed startups.

Instead of a carbon tax, Ontario’s landmark Green Energy Act and feed-in-tariff program – and its ambitious commitment to phase out coal-fired generation by 2014 – have established the province as one of the best places on the continent to develop renewable energy and smart grid innovations focused on energy management, storage and efficiency. A relatively new Water Opportunities Act aims to make Ontario a leader in water conservation and treatment technologies.

Government funds aimed at green innovation development and smart grid technologies, as well as support for community power, have added to the province’s allure. The MaRS Discovery District in Toronto has become one of the nation’s leading incubators for clean technology innovation, while several universities in southern Ontario – including University of Waterloo, University of Ontario Institute of Technology and Queen’s University – are generating both green innovations and entrepreneurs with the right business skills to take clean technologies to market.

“You can’t take a great technology developer and expect them to be a wonderful business developer,” said Vicky Sharpe, chief executive of Sustainable Development Technology Canada, the federal agency that gives grants to cleantech demonstration projects. You need both, she said.

Quebec, with 152 companies (21 per cent), has traditionally been strong in industrial manufacturing, water and waste management technologies. Bak attributes this strength to its having “a regulatory framework that is very smart and very proactive in terms of recycling.” Rather than setting up a dedicated government fund to support development and commercialization, Quebec recently decided to invest in the sector through venture capital firm Cycle Capital Management.

Nova Scotia, with 50 companies, stands out on the East Coast for its strength around green chemistry, biofuels and renewable energy, such as wind and tidal power. In the prairies, Alberta’s 88 companies, operating in a province known for its oil sands resources, are largely focused on soil, water and emissions remediation technologies, such as carbon capture and sequestration.

Said Bak: “Each province or region is taking a slightly different approach.”

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