2017 Ontario Budget
Billed "A Stronger Healthier Ontario", Ontario Finance Minister Charles Sousa introduced Ontario's budget, which focused on health care, education, and Ontario's housing market. Economy-wide highlights included meeting the government's commitment to a balanced budget - the first since the global financial crisis in 2008 - and $130 billion in planned infrastructure investments.
Regarding clean technology, Ontario Budget 2017 included programmatic policies intended to send market signals. Like the federal government, the Ontario provincial budget stopped short of policies to unleash the potential of private sector capital markets through sovereign guarantees such as those now in place for mortgages in the housing sector.
The budget was silent on how innovative clean technology can improve the lives of Ontarians by delivering better transportation, energy, and water infrastructure more cost effectively to lower the GHG intensity and increase the productivity of the Ontario economy. The budget was also silent on the opportunity for innovative green chemistry to reduce our exposure to harmful chemicals.
Finally, the budget was silent on how innovative firms could be engaged in Ontario's carbon market as a way to send market signals to capital markets about how innovation is contributing to reducing emissions.
As it introduced the proposed measures for Ontario's clean technology industry, the budget highlighted some of the province's cleantech leaders: Ecobee, Electrovaya, Trojan Technologies and Temporal Power were among the firms mentioned in the budget.
Business Growth Initiative (BGI), Ontario's Cleantech Sector
Proposed in 2016, the BGI provides program support for Ontario's transition to a low carbon economy by increasing invention, accelerating small business scale-up into medium and large enterprises, and reducing regulatory burden on businesses. The BGI program is expected to expand to over $650 million over five years. Several key commitments relevant to the clean tech sector have been implemented to deliver in the BGI, including:
- Cleantech Equity Fund - A new $55-million fund to make equity investments in cleantech firms. In January 2017, an Expression of Interest was issued for a fund manager.
- Scale-Up Voucher Program - Investing $32.4 million over four years to provide high-impact firms in Ontario with vouchers to access business development tools and services. To be launched in spring 2017, this would cover services to protect intellectual property.
- Small Business Innovation Challenge - A $28.8 million pilot to help Ontario SMEs demonstrate innovative technological solutions to problems identified by the government. Launched in March 2017.
- ScaleUP Ventures Fund - Allocating $25 million to a new venture capital fund as an initial investment in a fund targeted to be over $75 million. To date, the fund has invested in seven companies.
Other innovative sectors receiving programmatic support for R&D in Ontario Budget 2017 include a veritable Quirks and Quarks parade of 21st century invention:
- 5G technology to reboot the provinces telecoms sector
- Quantum technology to leverage previous investments in theoretical physics
- Advanced computing
- Autonomous vehicles
- Cyber tech
Many of these technology verticals are relevant to the low carbon economy and clean technology, including the potential for financial technologies to provide proof of GHG reductions to markets.
There is no time for silos in the sustainable economy and we hope that these plans ensure that investments in invention result in patented disruptive innovation within firms that scale-up.
On January 27, 2017, Ontario launched its third Canadian-dollar Green Bond of $800 million. To date, total Green Bond financing amounts to $2.05 billion, with up to $1.77 billion allocated to Metrolinx for clean transportation projects. Ontario expects to continue to access the Green Bond market on an annual basis.
Source: Analytica Advisors