By Saeed Zeinali, Founder & CEO, NextStars
Canada has quietly emerged as a global powerhouse in energy technology innovation, ranking second worldwide on the Global Cleantech Innovation Index in 2024. With over $160 billion in federal support through 2035, a robust ecosystem spanning 20+ research universities, 45+ major energy technology companies, and 55+ emerging startups, Canada is positioning itself as an essential partner for the global energy transition. But beneath the impressive statistics lies a more nuanced story of genuine leadership in specific domains, strategic investments creating real commercial outcomes, and persistent challenges that reveal both opportunities and vulnerabilities in Canada’s quest for energy technology dominance.
The academic engine: Universities driving commercialization at scale
Canada’s university research ecosystem represents the foundational layer of its energy technology advantage, with over $600 million in recent Canada First Research Excellence Fund (CFREF) awards specifically targeting energy innovation. The University of Alberta’s Future Energy Systems initiative received $75 million in CFREF funding and has become a nexus for practical energy research spanning hydrogen production, battery storage, and oil sands water treatment. Dr. Shiva Mohajernia’s work on green hydrogen production through photocatalysis exemplifies the translational focus—moving directly from laboratory discovery to commercial application pathways.
The University of British Columbia stands out for aggressive commercialization, launching 15 new spin-offs in the 2024-2025 fiscal year alone, bringing its total to 275 companies. Among these, VulcanX Energy is developing methane pyrolysis technology for low-emission hydrogen with funding from FortisBC announced in 2024, while Arca secured over $1 million in carbon removal credits and won a $1 million XPRIZE Award for carbon mineralization technologies. UBC’s Clean Energy Research Centre combines this entrepreneurial culture with $4 million in annual Wall Legacy Awards funding, creating a sustainable pipeline from research to market.
Dalhousie University has leveraged its world-renowned battery expertise into tangible infrastructure. The $20 million Canadian Battery Innovation Centre, opening Fall 2025, builds on Dr. Jeff Dahn’s legendary Tesla partnership—a collaboration that has produced breakthrough lithium-ion battery technologies now powering millions of vehicles globally. The university’s $34.4 million federal investment announced in March 2024 signals continued government confidence in battery research as a strategic priority, with Dr. Chongyin Yang’s work on sustainable electrode materials without transition metals addressing critical supply chain vulnerabilities.
Ontario Tech University’s designation as Canada’s Research University of the Year in 2024 reflects its specialization in nuclear energy, particularly small modular reactors and “nano reactors” for cleaner, less expensive energy. The university’s Clean Energy Research Laboratory demonstrated the world’s first lab-scale copper-chlorine cycle for nuclear hydrogen production—a technology that could enable zero-emission hydrogen at industrial scale. With SMR research grants awarded in May 2024, Ontario Tech exemplifies how specialized institutional focus can create outsized impact in emerging technology domains.
The University of Waterloo’s $1.3 million in NSERC grants for SMR research across four projects demonstrates the breadth of Canada’s nuclear innovation pipeline. The Waterloo Institute for Sustainable Energy (WISE) and its Energy Research Centre, built for $11.4 million in 2010, continue to produce industry-ready talent and technologies. Executive Director Dr. Claudio Cañizares holds the Hydro One Chair in Power Engineering, symbolizing the deep industry-academia integration that characterizes successful Canadian energy innovation.
Concordia University’s $123 million CFREF investment in its Volt-Age initiative represents the largest recent university energy commitment, focusing on energy transition with a new thematic campus in Shawinigan, Quebec dedicated entirely to clean energy research. This geographic clustering strategy—concentrating resources in purpose-built facilities—mirrors successful innovation hubs globally and suggests Canada is learning from international best practices.
Across these institutions, common patterns emerge: substantial multi-year federal funding creating stability, strong industry partnerships providing market validation, aggressive spin-off creation demonstrating commercial viability, and geographic clustering enabling ecosystem effects. The $600+ million in CFREF energy-related funding since 2016 has catalyzed an estimated 30+ energy technology spin-offs that have collectively raised over $150 million in private capital between 2023-2025.
Major players: Established companies defining global markets
Canada’s major energy technology companies span the full spectrum from traditional energy to cutting-edge clean technology, collectively generating over $10 billion in annual revenue and employing 50,000+ people. These are not merely aspirational ventures—they are established market leaders shaping global industries.
Ballard Power Systems, founded in 1979 in Burnaby, British Columbia, has achieved what most fuel cell companies only aspire to: commercial scale deployment. With $69.7 million USD in revenue for 2024 and a record year-ending order backlog of $173.5 million (up 41% from Q3), Ballard’s proton exchange membrane fuel cells power over half of the world’s deployed fuel cell buses. The company’s October 2025 leadership transition with new CEO Marty Neese signals continued evolution, while the launch of the FCmove®-SC fuel cell at Busworld 2025 and 51% revenue growth in the bus vertical demonstrate sustained commercial momentum. Ballard exemplifies patient capital and persistent innovation creating genuine market leadership over decades.
In nuclear technology, Canadian innovation extends far beyond CANDU reactors. USNC-Power is developing Canada’s first small modular reactor at Chalk River Laboratories, with expected commercialization by 2026—positioning Canada to become the first G7 nation with a commercial grid-scale SMR. GE Vernova Hitachi Nuclear Energy’s BWRX-300 reactor design can be constructed in 24-36 months using 50% less concrete than conventional reactors, addressing the primary economic barriers that have stalled nuclear development globally. Canadian Nuclear Laboratories operates with an annual budget of approximately $1.2 billion and has launched groundbreaking initiatives including the world’s first micro-modular reactor and a $20 million investment in General Fusion for magnetized target fusion in August 2024. The expansion of CNL’s Clean Energy Siting Program in February 2025 to include fusion, hydrogen, and battery storage beyond just nuclear demonstrates Canada’s integrated approach to energy innovation.
Canadian Solar represents Canada’s manufacturing prowess at global scale. Founded in 2001 by Dr. Shawn Qu in Kitchener-Guelph, Ontario, the company now employs 17,000-22,000 people globally and generates $5.99-7.6 billion USD in revenue (2024). Having delivered 150 GW of solar modules globally by 2024 and developed 11.5 GWp of solar projects plus 4.5 GWh of storage, Canadian Solar ranks among the world’s largest solar manufacturers. Dr. Qu’s recognition as a TIME100 Climate 2024 Innovator and the company’s first U.S. manufacturing plant in Texas with 5 GW capacity employing 1,500 people demonstrate how Canadian-founded companies can achieve global industrial scale.
Svante Technologies in Burnaby has emerged as the global leader in carbon capture filter technology, raising $512 million+ including a $318 million Series E in 2022 led by Chevron. The company’s May 2025 opening of the world’s first carbon capture gigafactory—a 141,000 square foot facility capable of producing filters to capture 10 million tonnes of CO2 annually (equivalent to removing 2 million+ cars from roads)—represents genuine industrial-scale carbon capture arriving ahead of most projections. With the Canada Growth Fund investing up to $100 million in August 2024, the Government of Canada providing $25 million through the Strategic Innovation Fund, and the U.S. Department of Energy committing up to $95 million for a 2025 pilot project at Delek’s Texas refinery, Svante has achieved the trifecta: technological validation, commercial partnerships (Samsung E&A, BASF, Chevron, United Airlines Ventures), and multi-jurisdictional government support. The 200+ jobs at the new facility and 300-350 employees company-wide demonstrate carbon capture transitioning from research curiosity to industrial reality.
In traditional energy technology, Precision Drilling Corp demonstrates that Canadian innovation extends to conventional sectors. With revenue of approximately $1.9 billion USD in 2024 and a fleet of 200+ drilling rigs operating across Canada, the U.S., and internationally, Precision has pioneered automation technology including ALPHA™ automation and ALPHA ARMS robotics (Automated Robotic Modular System). The company’s EverGreen™ environmental solutions incorporating hydrogen injection systems show traditional energy companies adapting to decarbonization imperatives. With 81 rigs operating in January 2025 (near full utilization of its Canadian fleet) and reactivation of idle rigs to meet demand from Trans Mountain pipeline expansion, Precision illustrates how technology can revitalize mature industries. The well servicing business achieved 50% EBITDA increase in 2024, demonstrating robust economics alongside technological advancement.
NRStor’s Oneida Energy Storage project—250 MW/1,000 MWh operational in 2025—is Canada’s largest battery storage facility and was developed as a 50:50 joint venture with Indigenous partners, exemplifying the integration of reconciliation with infrastructure development. CEO Annette Verschuren’s leadership earned the project a 2025 Energy Storage Milestone Award. Hydrostor’s $2.3 billion in raised capital for Advanced Compressed Air Energy Storage (A-CAES) and its 500 MW Quinte CAES project in Ontario demonstrate Canadian innovation in long-duration storage—the critical missing piece for renewable energy systems.
Enerkem’s commercial-scale facility in Edmonton producing 36 million liters of bioethanol annually from municipal garbage demonstrates waste-to-energy technology at industrial scale, with $871.5 million raised funding aggressive global expansion. This is not pilot-scale experimentation—it is operational infrastructure processing actual municipal waste streams into transportation fuel today.
The startup surge: 55+ emerging innovators reshaping energy markets
Canada’s energy technology startup ecosystem founded since 2015 reveals where the next wave of innovation is emerging. With 55+ notable startups identified across carbon capture, hydrogen, battery storage, nuclear, grid technology, biofuels, and energy management, Canadian entrepreneurs are attacking every dimension of the energy transition.
Deep Sky, founded in 2022 by Hopper co-founder Fred Lalonde and Joost Ouwerkerk, represents the new generation of climate entrepreneurs. The company’s $40 million grant from Breakthrough Energy Catalyst in 2024 (with $55 million total raised) funds Deep Sky Labs in Innisfail, Alberta—a first-of-its-kind direct air capture testing hub partnering with 12+ technology providers to validate DAC technologies under harsh Canadian climate conditions. With carbon removal credit sales to RBC and Microsoft (10,000 tonnes committed), Deep Sky is demonstrating market demand for permanent carbon removal while de-risking multiple technology pathways simultaneously. This diversified validation approach could accelerate the entire DAC industry by years.
TerraFixing’s $1.6 million seed round in 2024 funds the only direct air capture technology designed specifically for cold climate operation using zeolite mineral filters that function in sub-zero temperatures. The company’s 20-foot prototype captures 1,000 tonnes of CO2 annually, with a $10 million pilot project with Tugliq Énergie in northern Quebec addressing the critical question of whether DAC can work in the very climates that need it most—cold northern regions with abundant renewable energy and limited population density for point-source capture.
Carbonova’s $6 million oversubscribed equity round in 2024 led by Korea’s Kolon Industries, following a $2 million SDTC grant in 2023, demonstrates international recognition of Canadian carbon innovation. The company’s technology converts greenhouse gas emissions into carbon nanofibers for consumer products—moving beyond simple sequestration to value creation. The first commercial demonstration unit in northeast Calgary operational in 2024 provides real-world validation, while the Kolon Industries lead investor suggests Asian manufacturing integration pathways.
In hydrogen, Aurora Hydrogen’s microwave-driven methane pyrolysis technology represents revolutionary process innovation. Unlike conventional steam methane reforming that generates CO2, or electrolysis requiring massive renewable electricity, Aurora’s microwave technology produces zero-emission hydrogen from natural gas while capturing solid carbon as a valuable byproduct. Multiple grants from NGIF Accelerator have supported development of technology that could bridge the “blue hydrogen” versus “green hydrogen” debate by offering a third pathway.
Ekona Power’s xCaliber Reactor similarly uses methane pyrolysis, but with a different technical approach, demonstrating the diversity of innovation pathways being explored. VulcanX Energy’s UBC spin-off leveraging Dr. Walter Merida’s research has secured FortisBC funding for a 1 tonne/day hydrogen facility announced in 2024, plus $75,000 from the BC Centre for Innovation and Clean Energy. These multiple parallel approaches to clean hydrogen from natural gas could prove critical, as Canada possesses vast natural gas resources that pyrolysis technologies could convert to hydrogen without CO2 emissions.
e-Zinc’s $73.2 million raised for zinc-based long-duration energy storage founded by Dr. Gregory X. Zhang with investments from Toyota Ventures and BDC demonstrates Canadian innovation in alternatives to lithium-ion batteries. Using abundant, recyclable zinc metal as the storage medium addresses supply chain vulnerabilities and sustainability concerns with lithium and cobalt. Moment Energy’s repurposing of retired EV batteries into Flora battery systems working with Mercedes and Nissan, with five projects in BC, Alberta, and Manitoba, tackles the looming challenge of millions of end-of-life EV batteries that retain 70-80% capacity but cannot safely remain in vehicles.
Atlas Power Technologies raised $6.5 million from Emissions Reduction Alberta and $750,000 from the BC Centre for Innovation and Clean Energy in 2024 for grid-scale supercapacitor energy storage systems. The company’s hybrid hydroelectric project with TransAlta in Alberta demonstrates how supercapacitors’ rapid high-power response capabilities can stabilize grids with increasing renewable penetration—a different value proposition than lithium-ion’s energy storage focus.
ARC Clean Energy Canada’s $30 million CAD Series A in 2024 from private investors and the Province of New Brunswick funds the ARC-100 sodium-cooled fast reactor with a remarkable 20-year refueling cycle. The company is in Phase 2 of the Canadian Nuclear Safety Commission vendor design review with planned deployment at the Point Lepreau site. If successful, Canada would commercialize an advanced reactor design with dramatically reduced operational complexity compared to conventional reactors.
Ontario Power Generation’s Darlington SMR project—approved for construction in May 2025 with a $20.9 billion budget for four BWRX-300 units ($6.1 billion for the first unit)—represents the single largest clean energy infrastructure commitment in Canadian history. With OPG leading the project alongside GE Hitachi, SNC-Lavalin, and Aecon, and the first unit targeted for late 2028, Canada is positioned to become the first G7 country with a commercial grid-scale SMR. This first-mover advantage could establish Canadian standards, supply chains, and expertise that position the country as the global SMR hub.
BluWave-ai’s AI-powered grid energy optimization platform executed Canada’s first AI-driven multi-EV OEM demand response events with Hydro Ottawa in 2024, with $1.9 million+ from SDTC supporting the EV Everywhere product for fleet integration. As millions of EVs arrive on grids designed for one-way power flow, BluWave-ai’s machine learning for grid optimization, renewable integration, and demand response could prove essential infrastructure.
Woodland Biofuels announced a $1.35 billion investment at the Port of South Louisiana in September 2024 for what would be the world’s largest carbon-negative renewable natural gas plant, converting waste biomass into RNG and ultra-green hydrogen. A July 2025 MoU with Qarlbo Biodiversity for 500,000 tons of sustainable forest biomass annually ensures feedstock supply. This scale of investment in biofuels—from a Canadian company, in the U.S., with sustainable feedstock commitments—demonstrates both the commercial viability of advanced biofuels and the challenge of capital finding its highest return (in this case, in the U.S. market).
The startup ecosystem’s geographic concentration reveals strategic clustering: Vancouver and Burnaby dominate hydrogen and carbon capture (Svante, Deep Sky, Ekona, Aurora, Ionomr); Calgary leads carbon utilization (Carbonova, CarboMat, CleanO2); Toronto and Ontario focus on energy storage, grid tech, and building management (e-Zinc, BluWave-ai, NRStor, Peak Power); Montreal centers on carbon removal, HVAC, and smart systems (Deep Sky, BrainBox AI, dcbel). This clustering creates ecosystem effects where talent, capital, and expertise concentrate, accelerating development.
Federal and provincial research infrastructure: $1.5+ billion annually
Canada’s research infrastructure represents patient, sustained public investment creating the foundation for commercial innovation. The federal government alone invests over $1 billion annually through CanmetENERGY, National Research Council programs, and Canadian Nuclear Laboratories, while provincial organizations add $500+ million more.
CanmetENERGY operates three specialized facilities in Ottawa, Varennes (Quebec), and Devon (Alberta) with 500+ scientists, engineers, and technologists. The Ottawa facility’s CanCO2 system for carbon capture testing, the Canadian Centre for Housing Technology for net-zero buildings, and the Envelope Research Building developed in partnership with Carleton University provide validation infrastructure essential for moving technologies from laboratory to market. The Varennes facility manages RETScreen® Clean Energy Management Software used globally and operates sophisticated grid integration testing equipment including a 90 kVA three-phase bi-directional utility grid simulator—the type of specialized equipment too expensive for individual companies but essential for technology validation.
The National Research Council’s Advanced Clean Energy Program spans four pillars: battery energy storage, hydrogen, low-carbon fuels, and grid integration. The Critical Battery Materials Initiative uses automated AI-enabled platforms for material discovery, dramatically accelerating the identification of improved electrode materials, electrolytes, and cell designs. The NRC’s 20+ years of experience in clean hydrogen production and development of high entropy oxide catalysts for hydrogen production represent the type of long-term fundamental research that rarely attracts private capital but creates breakthrough possibilities. The NRC-University of Toronto Collaboration Centre for Green Energy Materials at the Mississauga facility (2620 Speakman Drive) exemplifies federal-academic integration, combining NRC’s infrastructure with university research talent.
Canadian Nuclear Laboratories’ approximately $1.2 billion annual budget makes it one of the world’s largest nuclear research organizations. The June 2025 contract award to Nuclear Laboratory Partners of Canada Inc. led by Amentum continues the Government-owned, Contractor-operated model that has proven effective. CNL’s February 2025 expansion of its Clean Energy Siting Program beyond nuclear to include fusion, hydrogen, and battery storage recognizes that energy innovation increasingly requires integrated approaches rather than siloed technology development. The world’s first micro-modular reactor being built at Chalk River (announced May 2023 by Global First Power), the $20 million investment in General Fusion for magnetized target fusion (August 2024), and the formation of Fusion Fuel Cycles Inc. joint venture with Kyoto Fusioneering demonstrate CNL moving aggressively into next-generation technologies. With the Advanced Nuclear Materials Research Centre under construction as one of Canada’s largest active research laboratories and 100+ Federal Nuclear Science and Technology Work Plan projects completed in 2024, CNL is not merely maintaining capability but expanding it.
Alberta Innovates operates with $184 million annually (fiscal 2020-21) and manages a portfolio of 1,300 projects valued at $1.33 billion. The Hydrogen Centre of Excellence Competition 2 in 2024 provided $22.5 million for 20 early-stage projects with approximately $118.8 million total value, while the Digital Innovation in Clean Energy program invested $2.5 million in November 2023 supporting AI, blockchain, IoT, drones, and digital twins applications. InnoTech Alberta’s Carbon Conversion Technology Centre conducts research with real-world flue gas from the Shepard Energy Centre, testing carbon capture technologies under actual operating conditions rather than idealized laboratory settings—a critical validation step that has revealed limitations of many capture technologies and accelerated development of robust alternatives.
Institut de recherche d’Hydro-Québec (IREQ) operates with approximately $100 million annually and employs 500+ experts across its Varennes main campus (2.5+ square kilometers) and Shawinigan laboratory. Protected by 800 patents in battery and energy technologies, IREQ has commercialized innovations including spacer-dampers for transmission lines marketed worldwide since 1979, the HYPERSIM real-time power system simulator, in-wheel motor technology that inspired TM4 (now Dana TM4), and robotics for transmission line inspection (LineScout, LineRanger, LineDrone). The Center of Excellence in Transportation Electrification and Energy Storage created in 2018 at Varennes focuses IREQ’s battery expertise, with work on molten salts, lithium iron phosphate, and nanotitanate advancing the entire battery sector. As a research institute of government-owned Hydro-Québec, IREQ benefits from direct connection to one of North America’s largest utilities and its $155-185 billion investment plan for 2024-2035—ensuring research remains grounded in actual grid operational requirements.
The Wind Energy Institute of Canada on Prince Edward Island, with 40+ years of wind energy research experience, provides specialized testing infrastructure including a 10 MW Wind R&D Park with 300-degree water exposure and average wind speeds of 8.2 m/s at 50 meters. The site’s numerous icing events annually make it ideal for cold climate testing—critical for both Canadian deployment and export to Nordic countries. Western University’s WindEEE Research Facility in London, Ontario, houses the world’s first 3D wind chamber capable of reproducing tornadoes up to Enhanced Fujita 4, serving 300 Canadian users annually and 150 international users for wind turbine testing, building aerodynamics, and extreme weather research.
Industry consortiums represent a distinct Canadian approach to collaborative innovation. Canada’s Oil Sands Innovation Alliance (COSIA), established in 2012 by nine major producers representing over 90% of Canadian oil sands production, has invested $1.6 billion+ in technology development, creating 1,076 technologies that members share. This pre-competitive collaboration model—where companies jointly fund research then share results—has achieved 20% reduction in GHG emissions per barrel (2009-2018), 46% reduction in fresh water intensity for in-situ operations, and 18% reduction for mining operations. The Quest facility and Alberta Carbon Trunk Line represent world-leading carbon capture infrastructure emerging from this collaboration. With 225+ projects currently underway valued at $62.1 million and partnerships exploring geothermal energy and SMR applications, COSIA demonstrates how industry can collectively address challenges no single company could solve alone.
The Petroleum Technology Alliance Canada (PTAC), facilitating 800+ collaborative projects since 1996 with 114 in 2021-22 alone, coordinates the Alberta Upstream Petroleum Research Fund with 400+ participants achieving 30% reduction in Canadian oil and gas methane emissions in the last decade. The Methane Emissions Reduction Network and Canadian Emissions Reduction Innovation Consortium represent 200+ methane emissions reduction and detection technologies with 100+ in the validation pipeline over the next 15 years—demonstrating Canada’s systematic approach to emissions reduction rather than aspirational targets without technological pathways.
The Clean Resource Innovation Network (CRIN), established 2016-2017, has grown to 430+ member organizations including national bodies (NRCan, NRC), major universities (McMaster, Alberta), and industry across Canada. CRIN’s three Oil and Gas Technology Competitions distributed up to $80 million total through Strategic Innovation Fund matching with industry for digital solutions, low-emission fuels, and environmental footprint reduction. The 27 finalist projects funded span the innovation spectrum from early research to commercial demonstration.
Investment ecosystem: $7.86 billion in 2024, but early-stage challenges persist
Canada’s energy technology investment landscape tells a story of strength at later stages, international recognition, and concerning vulnerabilities in early-stage funding. With $7.86 billion invested across 592 deals in 2024 (up 10% year-over-year), average deal sizes of $13.3 million (up 30%), and 62% of capital concentrated in megadeals over $50 million, the market demonstrates robust appetite for proven technologies. Yet seed funding dropped 69% from mid-2023 to mid-2024—a potential crisis threatening the pipeline of future innovations.
The largest deal remains Carbon Engineering’s $1.1 billion acquisition by Occidental Petroleum in 2023—validation that Canadian direct air capture technology can attract major fossil fuel company investment at scale. Canadian Solar’s $200 million convertible notes from PAG in 2024, FLO’s $136 million growth round for EV charging expansion, Svante’s $100 million from Canada Growth Fund, and Cyclic Materials’ $53 million Series B led by Microsoft Climate Innovation Fund with Amazon and BMW participating demonstrate both the scale of capital flowing to Canadian cleantech and the diversity of investor types: Asian infrastructure funds, corporate strategics, government vehicles, and global tech giants.
BDC Capital’s Climate Tech Fund II at $400 million and Sustainability Venture Fund at $150 million (launched April 2023) represent $1.6 billion+ total BDC commitment to climate and cleantech, with approximately $1 billion deployed in 2024 alone primarily to late-stage companies. Export Development Canada exceeded its 2025 target of $10 billion two years early, deploying $12 billion+ to 440+ companies in 2023 alone—demonstrating the scale of government-backed financing available to proven companies. The Canada Growth Fund’s $15 billion size managed by PSP Investments, with investments including $137 million to Svante and $50 million to MKB Fund III, provides commercialization-stage capital previously unavailable in Canada.
Cycle Capital Management’s Fund IV at $109 million first close (approximately $500 million assets under management total), leading Airex Energy’s $38 million Series B, demonstrates established Canadian cleantech VCs continuing to raise and deploy capital. ArcTern Ventures’ Fund III at $335 million in 2024 with 69 investments focused on electricity, industry, and transportation represents persistent sector-focused investment. Evok Innovations’ Fund II at $300 million USD in 2022 with 16 investments in carbon capture, hydrogen, and storage shows oil and gas majors (fund backers include Cenovus, Suncor, and others) directly funding technologies they need.
International investment flows reveal global recognition of Canadian innovation. Microsoft’s investment in Cyclic Materials and 300,000 tonne CO2 removal deal with Arca Climate, Amazon’s investment in Genecis Bioindustries, PAG’s $200 million to Canadian Solar, Glencore’s $75 million to Li-Cycle, Breakthrough Energy Ventures’ multiple Canadian portfolio companies, BP Ventures’ $10 million to Eavor, Shell Ventures’ investments in Ionomr and founding role in NorthX Climate Tech, Chevron’s participation in Svante, Samsung Ventures’ multiple deals, and Korean Kolon Industries leading Carbonova’s round demonstrate Canada attracting capital from Asia, Europe, and the United States across strategics, corporates, and pure financial investors.
Sector analysis reveals concentration in energy storage and batteries with 12+ major deals (Li-Cycle, Cyclic Materials, Moment Energy, e-Zinc, Corvus Energy, Electrovaya, Mangrove Lithium, Summit Nanotech), EV infrastructure (FLO $136 million, UgoWork $51 million), carbon capture and circularity (Svante $100 million, Deep Sky $42 million, Planetary $11 million, Carbonova $8 million), hydrogen (Ionomr $26.7 million, Next Hydrogen, Aurora, Ekona), and solar/renewables (Canadian Solar $200 million, Silfab $125 million). Notably, the hydrogen market sized at $500 million to $1.23 trillion by 2050 depending on adoption rates is attracting significant venture investment before market clarity—a sign of investor conviction that hydrogen will play a major role regardless of exactly which applications dominate.
Geographic distribution shows Ontario at $2.5 billion (252 deals, 32%), BC at $2.4 billion (88 deals, 31%), and Quebec at $2 billion (108 deals, 25%). At the city level, Burnaby captured $900 million (primarily Svante), Toronto $118.7 million, and Vancouver $96.2 million. This concentration creates ecosystem effects but also risks if any hub loses momentum.
The seed funding collapse—69% drop mid-2023 to mid-2024—represents the ecosystem’s most significant vulnerability. While late-stage companies raise megadeals, the early-stage pipeline is drying up. The suspension of Sustainable Development Technology Canada (SDTC) funding from October 2023 until its transition to NRC IRAP with applications opening early fiscal 2025-26 created a year+ gap that forced some startups to cut 30% of staff and scale back development. The transition of SDTC’s historical $2.1 billion invested and approximately $750 million allocated for 2021-2026 to the new NRC IRAP Clean Technology Program represents necessary restructuring after governance issues, but the gap period has inflicted real damage.
Canadian VCs’ preference for software over hardware—47% of deals but 58% of funding to software versus capital-intensive cleantech—creates a structural challenge. Energy technology typically requires substantial capital for pilot plants, demonstration facilities, and manufacturing scale-up. The shortage of lead investors for early-stage hardware deals means promising technologies struggle to reach the validation stages that attract later-stage capital. International competition, particularly the U.S. Inflation Reduction Act pulling talent and companies south, threatens Canada’s talent advantage—though post-2024 U.S. political volatility may be moderating this pull factor as Canada offers greater policy stability.
Government support: $160+ billion in tax credits and programs through 2035
Canada’s government support for energy technology represents the most ambitious policy commitment in Canadian history, with over $160 billion in federal tax credits and programs through 2035, complemented by substantial provincial investments totaling $500+ million annually. This “all of government” approach spans R&D funding, commercialization support, tax incentives, procurement, regulatory modernization, and international partnerships.
The federal Clean Economy Investment Tax Credits total $93 billion by 2034-35 across six distinct programs. The Clean Technology ITC provides 30% tax credits (2023-2033, declining to 15% by 2034) for wind, solar, storage, heat pumps, and zero-emission vehicles—reduced to 20% without prevailing wage and apprenticeship requirements worth 10 percentage points. The Carbon Capture, Utilization and Storage ITC offers extraordinary 60% credits for direct air capture, 50% for other capture technologies, and 37.5% for refurbishment—again with 10 percentage point reductions without labour requirements—with $11.4 billion projected through 2027-28 combined with CT ITC. The Clean Hydrogen ITC provides up to 40% based on carbon intensity (15% for ammonia), enacted June 2024 with applications expected fall 2024.
The Clean Technology Manufacturing ITC at 30% (2024-2031, declining over time) covers zero-emission vehicle manufacturing, batteries, renewable equipment, and critical minerals including copper, nickel, lithium, cobalt, graphite, and rare earths—with Budget 2025 expanding coverage and including polymetallic mining. The Clean Electricity ITC provides 15% base rate (5% without labour requirements) for provincial Crown corporations, municipal corporations, and Indigenous-owned corporations covering energy storage, renewable generation, and nuclear equipment. Draft legislation released August 2024 with Budget 2025 committing to retroactive implementation from April 2024 unlocks over $60 billion federal support for grid transformation over the next decade.
The proposed Electric Vehicle Supply Chain ITC at 10% (2024-2032) and 5% (2033-2034) for buildings in EV assembly, battery production, and cathode material production—requiring CTM ITC claims across all three segments—incentivizes vertically integrated EV manufacturing. Honda’s $15 billion investment could receive $2.5 billion under these programs, while Volkswagen’s multi-billion dollar investment was attracted by Canada’s clean grid and tax credit regime. Draft legislation released February 21, 2025 brings the sixth ITC closer to implementation.
The labour requirements across all these ITCs—worth 10 percentage points—represent the government mandating prevailing wages and apprenticeship participation to access full credits. This “high road” approach ensures clean energy jobs meet quality standards while building skilled trades capacity essential for deploying technologies at scale. Companies must choose: accept lower tax credits or meet wage and training standards. Most large projects opt for full credits, effectively making this a national wage and training standard for clean energy.
The Scientific Research and Experimental Development (SR&ED) program provides $4+ billion annually to 18,000+ claimants, with December 2024 reforms adding $1.9 billion over six years. The expenditure limit increased from $3 million to $4.5 million, enhanced rates extended to eligible public corporations, and capital expenditure eligibility restored—directly addressing cleantech companies’ capital intensity. Canadian-controlled private corporations receive 35% refundable credits on the first $4.5 million qualifying expenditures (15% non-refundable for others), with labour coverage up to 69%, contractors up to 36%, and materials up to 45%. Provincial credits add 4.5-30% depending on province, making combined federal-provincial support reach 50%+ in some cases. For a startup spending $3 million on R&D, SR&ED could return $1+ million—transformative capital access for early-stage companies.
The Strategic Innovation Fund’s Net Zero Accelerator committed $8 billion over seven years for industrial decarbonization targeting 40-45% emissions reduction by 2030. Notable projects include Algoma Steel receiving $420 million over four years and Svante $25 million, with the Canada Growth Fund’s additional $137 million to Svante in August 2024 demonstrating coordinated deployment of multiple programs. The Smart Renewables and Electrification Pathways Program’s $2.9 billion (Budget 2023) including $500 million for the Utility Support Stream (October 2024) and $131 million for 20 Ontario projects (November 2024) funds grid infrastructure and renewable integration—the unsexy but essential backbone enabling clean energy deployment.
The transition of SDTC’s historical $2.1 billion invested to the new NRC IRAP Clean Technology Program opening early fiscal 2025-26 represents necessary restructuring after governance concerns. The new program offers 60-80% internal labour coverage up to $10 million for large projects and $50,000 for accelerated stream, maintaining Canada’s strong early-stage support albeit with a disruptive transition period. The Energy Innovation Program through Natural Resources Canada’s Office of Energy Research and Development provides $500,000 to $10 million per project with R&D funding up to 75% of costs and demonstration up to 50%, with recent funding including $11 million in July 2024 for 9 projects and $5.5 million in January 2025 for clean fuels.
Provincial programs complement federal support with targeted investments. Alberta’s TIER Program committed $55 million for 15 projects expecting 119,000 tonnes/year emissions reduction, 1,600 jobs, and $237 million GDP impact, with projects receiving $500,000 to $10 million each. Alberta Innovates’ $184 million annual budget manages a $1.33 billion project portfolio with programs ranging from $10,000 micro vouchers to $2 million Clean Resources grants covering 25-50% of costs. PrairiesCan’s $8.3 million for 13 Alberta projects in March 2025 demonstrates continued federal-provincial coordination.
Ontario’s Hydrogen Innovation Fund allocated $15 million over three years with $13.4 million invested in 15 projects, while the Darlington SMR received $970 million from the Canada Infrastructure Bank—the single largest clean energy project financing in Canadian history. The Bruce Power assessment received $50 million and the Oneida Energy Storage project $50 million, with Ontario conducting 5,000-7,500 MW of competitive energy procurement and deploying nearly 3,000 MW of battery storage capacity. As home to 16 of Canada’s 17 operating nuclear reactors generating 30% of provincial electricity, Ontario’s nuclear leadership combined with 92% clean electricity overall makes it a magnet for industrial investment—Volkswagen and Honda’s multi-billion dollar commitments were explicitly attracted by this clean grid advantage.
British Columbia’s CleanBC Communities Fund invested $249 million over three intakes (2019-2022) in nearly 60 projects achieving over 11 megatonnes CO2e lifetime reduction. The BC Indigenous Clean Energy Initiative’s $140 million provincial endowment (2023) represents Canada’s largest dedicated Indigenous clean energy fund, while the ICE Fund committed $124 million since 2008 supporting project development. The BC Fast Pilot’s $1.5 million for 12 companies in February 2025 demonstrates continued early-stage support at provincial level.
Quebec’s Hydro-Québec 2035 Action Plan commits $155-185 billion for 2024-2035 creating 35,000 full-time equivalent jobs annually—an investment scale larger than all other provincial energy commitments combined. Federal support for Indigenous hydroelectric includes Innavik’s $14.9 million for a 7.5 MW project (Canada’s largest off-grid hydro) and Matawak’s $1.7 million for 17 MW planned. Quebec’s INNOV-R program provides up to $1.5 million maximum over three years for collaborative R&D, while Rénoclimat offers up to $6,700 for heat pump installations through LogisVert.
International partnerships position Canada within global innovation networks. As a founding member of the International Energy Agency (1974), Canada serves as Vice Chair of the IEA Governing Board through the Office of International Affairs Assistant Secretary, with Vice Chair positions on the Standing Groups on Oil Market and Emergency Questions. Active participation in 40 Technology Collaboration Programmes including Hydrogen Implementing Agreement and Advanced Fuel Cells Agreement integrates Canadian researchers into international networks sharing breakthroughs and coordinating standards.
The Clean Energy Ministerial with 27 member countries and Mission Innovation with 25 members advancing clean energy R&D both count Canada as active participants, with CEM’s 20+ initiatives and MI’s 8 innovation challenges providing platforms for Canadian technologies to gain international exposure. The Canada-US Joint Action Plan on Critical Minerals (2020) addresses supply chain security for communications, aerospace, defence, and cleantech, with $95.6 billion in bilateral mineral trade (2020) and 298 Canadian mining companies operating in the U.S. representing $40 billion in Canadian mining assets. As the largest energy supplier to the U.S. with 98% of Canadian energy exports going south (2015), Canada’s energy relationship remains foundational to North American energy security.
The Canada-UK Power Forward Challenge joint $20 million initiative (2018-2022) funded distributed energy resources development, with 7 finalists receiving $3.15 million each and $1 million grand prize to Equilibrium Engineering for the Alba Nova project—demonstrating how bilateral partnerships can accelerate specific technology domains. G20 and G7 participation keeps Canada at tables shaping global energy policy, critical mineral supply chains, and climate finance mechanisms.
Canada’s competitive positioning: Second globally, but facing headwinds
Canada ranks second globally on the 2024 Global Cleantech Innovation Index behind only the United States, with nine Canadian companies in the Global Cleantech 100 (2025): e-Zinc, Ionomr Innovations, Mangrove Lithium, pH7 Technologies, Summit Nanotech, Svante, Cyclic Materials, Pani, and Enersion. This over-representation given Canada’s 0.5% of global population demonstrates genuine innovation intensity. The country’s 70% electricity from renewables (versus 40% U.S., 30% global average) provides both a clean grid advantage attracting industrial investment and a testbed for renewable integration technologies.
Canadian strengths cluster in specific domains. In hydrogen and fuel cells, Ballard’s market leadership, combined with Ionomr’s breakthrough membrane materials, Ekona and Aurora’s methane pyrolysis innovations, and Hydrogen Optimized’s gigawatt-scale electrolyzer modules position Canada as a global hydrogen hub. No other country has comparable depth across the entire hydrogen value chain from production technology to fuel cells to membranes. In nuclear, Canada’s CANDU technology exported to seven countries established historical leadership, while current SMR development (USNC-Power at Chalk River, GE Hitachi’s BWRX-300 at Darlington, ARC Clean Energy’s ARC-100) positions Canada to become the first G7 nation with commercial grid-scale SMRs—a potential decade advantage over competitors.
Carbon capture leadership is undeniable. Svante’s world-first carbon capture gigafactory, Carbon Engineering’s $1.1 billion Occidental acquisition, Deep Sky’s pioneering DAC testing hub, and COSIA’s Quest facility and Alberta Carbon Trunk Line represent commercialization at scale—not research papers but operating infrastructure. While the U.S. has more CCUS projects under development, Canadian technology increasingly powers them. In battery materials, Dalhousie’s Tesla partnership, Cyclic Materials’ rare earth recycling attracting Microsoft and Amazon, Mangrove Lithium’s on-site lithium extraction, Summit Nanotech’s direct lithium extraction, and e-Zinc’s long-duration storage demonstrate innovation spanning extraction, materials, manufacturing, recycling, and alternative chemistries.
Canada’s resource integration offers unique advantages. The ability to extract lithium from oilfield brines (E3 Metals, Volt Lithium), convert carbon from bitumen to materials (CarboMat, Carbonova), leverage vast forest resources for biofuels (Woodland Biofuels’ sustainable biomass commitments), and utilize geological formations for compressed air storage (Hydrostor) or CO2 sequestration combines natural resource endowment with technological capability. Cold climate innovation—TerraFixing’s sub-zero DAC, hydrogen technologies adapted for northern conditions, and the Wind Energy Institute of Canada’s specialized cold climate testing—positions Canada for Nordic, Russian, and northern China markets facing similar conditions.
Academic commercialization strength stems from CFREF’s multi-year major investments creating sustained focus, aggressive technology transfer offices at universities like UBC (275 total spin-offs), strong industry partnerships providing market pull, and a culture increasingly accepting of faculty entrepreneurship. The 30+ energy technology university spin-offs founded 2020-2025 raising $150+ million demonstrates this pipeline’s productivity.
Yet significant challenges temper this optimistic narrative. The seed funding gap—69% drop mid-2023 to mid-2024—threatens the early-stage pipeline. Canadian VCs’ persistent software preference (47% of deals, 58% of funding) despite energy technology’s capital intensity creates structural misalignment between capital supply and sector needs. The shortage of Canadian lead investors for hardware deals means promising technologies must look south for Series A/B capital—often requiring company relocation or accepting growth terms that may not optimize for Canadian job creation.
U.S. competition remains fierce. The Inflation Reduction Act’s $370+ billion in clean energy incentives has already lured investments, with Canadian entrepreneurs calculating whether better tax credits, larger markets, or easier venture capital access justify relocating. Woodland Biofuels’ $1.35 billion investment at Port of South Louisiana rather than Canada illustrates how even Canadian-founded companies may build at scale elsewhere. The post-2024 U.S. political environment has created some uncertainty tempering IRA’s pull, but the fundamental U.S. advantages—10x population, larger VC ecosystem, more manufacturing infrastructure—persist.
China’s dominance in solar manufacturing, battery production, and increasingly wind turbine supply chains represents a more fundamental challenge. While Canadian Solar is Canadian-founded, much manufacturing occurs in Asia. Canada’s strength lies in technology innovation and specialized manufacturing rather than commodity manufacturing competing with Chinese scale. This means Canada must excel at early-stage innovation and high-value manufacturing while partnering with Asian manufacturers for volume production—a model working for companies like Canadian Solar and Ballard but requiring strategic clarity.
European competition in offshore wind, hydrogen infrastructure, and carbon capture policy leadership demonstrates clean energy transition is a global race. Denmark’s Orsted dominates offshore wind, Norway leads in carbon capture policy, Germany in electrolyzer deployment. Canada’s advantages—resources, clean grid, skilled workforce, political stability—must be actively maintained and enhanced rather than assumed.
Domestic challenges include ongoing reconciliation with Indigenous peoples requiring careful partnership approaches (increasingly achieved, as seen in Oneida’s 50:50 structure), interprovincial trade barriers occasionally hindering equipment and resource movement, and project approval processes that while improving remain slower than competitors. The Major Projects Office’s designation of Darlington SMR as priority in September 2025 demonstrates government recognizing permitting as competitive factor, but systematic reform remains incomplete.
Future trajectory: Critical inflection points ahead
Canada’s energy technology leadership faces three critical inflection points over the next decade that will determine whether second-place global standing strengthens or erodes.
First, the early-stage funding gap must close. The NRC IRAP Clean Technology Program must successfully replace SDTC’s functionality when applications open early fiscal 2025-26, providing $50,000 to $10 million in non-dilutive capital for 60-80% of internal labour costs. But beyond federal programs, Canadian VCs must develop greater appetite and expertise for capital-intensive hardware investments. The success of BDC’s $400 million Climate Tech Fund II, Cycle Capital’s $500 million AUM, and ArcTern’s $335 million Fund III demonstrates capital is available—it must flow earlier in company lifecycles. International capital offers partial solutions, as demonstrated by Korean Kolon Industries leading Carbonova’s round, but over-reliance on foreign capital risks strategic assets moving offshore.
Second, Canada’s first-mover advantages in SMRs and carbon capture must be ruthlessly commercialized. The Darlington SMR’s 2028 target for first unit operation represents a rare opportunity to establish standards, build supply chains, and train workforces before competitors. With $20.9 billion committed and global SMR market projections reaching $200+ billion by 2040, capturing even 15-20% global share would create $30-40 billion in exports annually. Svante’s gigafactory opening in May 2025 positions Canada to supply carbon capture infrastructure globally, but competitors from Norway to the United States to China are investing billions. The 2-3 year window for establishing market leadership is now—delay allows competitors to catch up or leapfrog.
Third, the hydrogen economy’s emergence demands coordinated strategy. With multiple Canadian innovations in methane pyrolysis (Ekona, Aurora, VulcanX), breakthrough membrane materials (Ionomr), gigawatt-scale electrolyzers (Hydrogen Optimized), market-leading fuel cells (Ballard), and abundant natural gas resources, Canada could become the “Saudi Arabia of hydrogen.” But this requires infrastructure investment (pipelines, storage, export terminals), demand creation through industrial policy, and international partnerships establishing hydrogen trade relationships. Alberta’s hydrogen strategy, BC’s hydrogen plans, and federal support through multiple programs demonstrate recognition, but execution at requisite scale remains incomplete. The global hydrogen market sized at $500 million today but potentially $1.23 trillion by 2050 represents a generational wealth creation opportunity—if Canada acts decisively.
Emerging technology focus areas show clear federal and provincial alignment. Small modular reactors have policy support (Darlington $20.9 billion, USNC-Power at Chalk River, ARC-100 in New Brunswick), technical expertise (CNL, university programs, supply chains), and global market opportunity. Green hydrogen production receives substantial funding (Alberta Innovates $22.5 million hydrogen competition, multiple federal programs, university research), with technologies maturing toward commercial deployment. Carbon capture has achieved commercial scale (Svante’s gigafactory, Quest facility, Alberta Carbon Trunk Line) with continued government support (CCUS ITC at 60% for DAC, multiple programs). Battery technologies span the value chain from mineral extraction to recycling with strong academic research (Dalhousie, McGill, Waterloo) and emerging companies (e-Zinc, Moment Energy, Cyclic Materials).
Critical minerals extraction represents enormous opportunity given Canada’s geological endowment. Federal expansion of Clean Technology Manufacturing ITC to include copper, nickel, lithium, cobalt, graphite, and rare earths with Budget 2025 adding polymetallic mining directly incentivizes extraction and processing. Canadian companies pioneering on-site processing (Mangrove Lithium, pH7 Technologies), extraction from unconventional sources (E3 Metals from brines), and recycling (Cyclic Materials) could establish Canada as a secure Western hemisphere supply chain anchor—critical for decoupling from Chinese-dominated supply chains.
AI and cleantech integration could deliver “10% global GHG reduction by 2030” according to sector analyses, with Canadian companies like BluWave-ai, BrainBox AI, and Pani Energy leading AI-driven optimization. Canada’s AI expertise (Geoffrey Hinton, Yoshua Bengio, Vector Institute, Mila, CIFAR) combined with energy technology depth positions the country uniquely to pioneer AI-driven energy optimization, predictive maintenance, material discovery, and system integration—potentially a more valuable long-term position than manufacturing hardware.
International export opportunity is substantial with $20.9 billion in cleantech exports (2022) targeting $44.9 billion by 2030—a 13.6% compound annual growth rate that appears achievable given technology maturity and global demand. The $1.77 trillion global clean energy market (2023) growing at 10-15% annually offers market scale making even modest Canadian market share enormously valuable. Cold climate technology exports to Nordic countries, northern U.S. states, Russia, and northern China leverage Canadian expertise testing technologies under harsh conditions few competitors match.
Indigenous partnerships are evolving from consultation to leadership, as evidenced by the Oneida Energy Storage 50:50 structure, Innavik’s hydro project as Canada’s largest off-grid renewable installation, BC’s $140 million Indigenous Clean Energy Initiative endowment, and numerous other projects. This approach addresses historical injustices while creating economic opportunity and leveraging Indigenous knowledge of land and resources—a competitive advantage if executed respectfully and effectively.
The competitive environment through 2030 will intensify. U.S., Chinese, European, and increasingly Middle Eastern investment in clean energy technology will create price pressure, talent competition, and rapid technological change. Canada’s advantages—political stability, skilled workforce, clean grid, resource endowment, and early technology leads in specific domains—must be actively defended through sustained investment, smart policy, aggressive commercialization, and strategic international partnerships.
The verdict: Real leadership, but execution is everything
Canada’s energy technology ecosystem represents genuine leadership in specific critical domains—hydrogen, nuclear, carbon capture, battery materials—supported by $160+ billion in government commitments, $1.5+ billion in annual research infrastructure, a sophisticated venture capital ecosystem deploying $7+ billion annually, and 20+ world-class research universities producing continuous innovation. This is not aspirational—it is operational reality with Svante’s gigafactory producing carbon capture filters today, Ballard fuel cells powering buses globally, Dalhousie batteries in Teslas, and Darlington SMR construction approved with first operation targeted 2028.
Yet leadership must be constantly re-earned. The seed funding crisis threatens the innovation pipeline feeding tomorrow’s major companies. International competition intensifies daily as trillions flow into clean energy globally. First-mover advantages in SMRs and carbon capture offer only a 2-3 year commercialization window before competitors catch up or leapfrog.
For international partners and investors, Canada offers rare combination: political stability, robust intellectual property protection, skilled workforce, clean competitive grid, world-class research infrastructure, substantial government co-investment reducing risk, and specific technological leads in critical domains. The country has moved beyond research papers to commercial deployment, beyond pilot plants to gigafactories, beyond prototypes to products.
The next five years will determine whether Canada becomes the global clean energy technology hub it has positioned itself to be—or a source of innovations that others commercialize and scale. With $93 billion in tax credits, $20+ billion in major projects committed, and world-leading technologies reaching market, the ingredients for success are present. Execution will make the difference between leadership and also-ran status. For those watching closely, Canada’s energy technology ecosystem in 2025 represents not potential but performance—and an invitation to participate in one of the most significant industrial transformations in Canadian history.
Read Saeed’s report on The $13.7 Billion Bridge: How Canada Can Capture India’s Innovation Surge and Transform Global Entrepreneurship here.
