A Globe and Mail feature article recently indicated a persistent challenge for Canadian cleantech startups: difficulty securing financial backing within Canada. Eavor, like many others, was pushed to seek international investments to scale its operations.
Despite receiving early-stage grants from federal and provincial agencies and seed funding from Alberta-based angel investors, Eavor struggled to attract Canadian capital for scaling its innovative geothermal technology.
“We got zero dollars from Canadian strategics and Canadian venture capital firms,” CEO John Redfern told The Globe and Mail. Redfern elaborated that the company then had to rely on international investors from countries like the UK, Singapore, and Japan.
A joint study by the University of Calgary and Université du Québec à Montréal highlights why U.S. cleantech startups outperform their Canadian counterparts. U.S. firms benefit from greater access to capital, higher valuations, and stronger investor confidence, supported by deep venture capital markets and financial expertise. The Inflation Reduction Act (IRA) further boosts U.S. cleantech with regulatory certainty, credits, and subsidies. In contrast, Canadian cleantech faces limited domestic funding, risk-averse investors, and policy uncertainty, making it harder to scale.
This risk aversion perplexes entrepreneurs like Redfern, though he advised other Canadian startups to seek international funding.
An RBC study estimates that Canada needs $2 trillion to reach net-zero emissions, while McKinsey projects a global investment of $275 trillion over the coming decades. Yet, as the article argues, if Canadian investors remain hesitant, the profits from these innovations will flow to foreign markets.
