This document summarizes a presentation on clean technology investment in Canada. It discusses issues facing Canada's transition to a low-carbon economy, including that carbon taxes disproportionately impact low-to-middle income groups. It provides an overview of GDP impacts of carbon pricing, the size and growth of Canada's cleantech market, challenges in commercializing cleantech, and examples of cleantech industries and their environmental impacts. It also reviews venture capital funding, US cleantech subsidies, air quality issues, excluded provinces from carbon funds, and perspectives on carbon pricing from other countries.

1. PAUL YOUNG, CPA, CGA
DECEMBER 6, 2017
Case Study – Carbon Tax and
Carbon Pricing – Clean Tech
Investment – December 2017

2. Paul Young - Bio
• CPA, CGA
• Financial Solutions
• Academia
• SME – Risk Management
• SME – Close, Consolidate and Reporting
• SME – Public Policy
• SME – Financial Solutions
• SME – Supply Chain Management
Contact information:
Paul_Young_CGA@Hotmail.com

3.  This presentation discusses clean technology in Canada. The presentation will look at
the market for clean technology and issues facing Canada transforming to low carbon
economy.
 Carbon tax are punitive which means they hurt the low to middle class more in terms of
costs.
Description

4.  GDP Analysis
 Cleantech Market Canada
 Carbon less economy
 Cleantech products
 Cleantech environmental impact
 Cleantech VC/Canada
 Cleantech Subsidies USA
Agenda

5. Companies developing technologies to cut carbon emissions are in line for an opportunity
worth up to $120 billion, as the federal government kicks off a carbon pricing program aimed
at cutting greenhouse gas emissions.
This is according to a report by Boston-based research and advisory firm Lux Research.
Prime Minister Justin Trudeau has mandated that all 10 provinces implement a carbon pricing
scheme by 2018, with a minimum of $10 per metric tonne (MT) and steadily increasing to $50
per MT in 2022. By 2030, our government seeks to cut emissions by 28 per cent, to 524 million
MT of CO2 equivalent.
• Money would have to flow to clean technology investment
• Clean technology relies on raw material, fabrication, delivery and installation
• Consumers will pay 6-8% more for goods and services
• CO2 is not a pollutant, but the building block for life
• Many government are using carbon tax and/or pricing to plug their fiscal gap between taxation
and program spending
Canadian Manufacturing – April 24 2017

6. Carbon Tax Market
California’s carbon market hasn’t
worked as envisioned at any point
during its relatively short life, but at
this point it’s not an exaggeration to
say it’s downright broken. It has so
many problems that it becomes
necessary to unpack them all in order
to see the mess in all its glory, so let’s
start with the biggest one of all: the
price of carbon permits in the system
just aren’t high enough. Bloomberg
reports:

7. Source - https://www.biv.com/article/2017/2/british-columbias-not-so-revenue-neutral-carbon-ta/
British Colombia Carbon Tax not Revenue Neutral
The B.C. government claims it is, in fact, revenue negative because the amount of tax reductions it
offers actually exceeds the amount of money brought in through the $30 per tonne carbon tax.
Last year, the reductions exceeded carbon tax revenue by $500 million, according to the Ministry of
Finance.
“Since the carbon tax was established in 2008-09, it has returned over $1.6 billion more in tax cuts to
B.C. employers, individuals and families than it has raised for government,” Sonja Zoeller, senior
public affairs officer with the ministry, said in an email to Business in Vancouver.
But a recent Fraser Institute analysis concludes that the carbon tax was indeed revenue neutral for
its first five years, but ceased being so in 2013.
That’s when the government hiked corporate tax rates and then started factoring in old pre-existing tax
credits to make it look as if the carbon tax were still being offset, as revenue from the tax continued to
increase, despite being frozen at $30 per tonne since 2013.
The pre-existing tax credits have included the film and TV tax credit and the scientific research and
experimental development credit. When they are removed from the calculation, the carbon tax has actually
cost British Columbians an additional $377 million over two fiscal years, concludes Charles Lammam, the
Fraser Institute’s director of fiscal studies.

8. GDP Analysis
Source – Stats Canada
The introduction of a federal carbon tax
could “shrink” Canada’s GDP by as much as
$3 billion in 2018 and lead to a slight
depreciation of the Canadian dollar, a new
report says.
In a study released Tuesday, the Conference
Board of Canada said the tax could cause a
broad slowdown in economic activity as
“higher energy prices ripple throughout the
economy.” Prices for natural gas, gasoline,
electricity and other goods will rise,
collectively raising costs of goods and
services.
Source -
http://business.financialpost.com/commoditi
es/energy/ottawas-carbon-tax-plan-to-
shrink-economy-by-3-billion-hurt-loonie-in-
2018-study

9. Canada Clean Tech Market
Key Programs
• SDTC
• Trade/FIPA
• Provincial Funds
for Clean
Technology
Market Size /Clean
Technology
• $52B
Market Growth
• 10% or about
$4.4B/year
• Technology evolving
(storage, micro grids,
solar, advance
materials, etc)
Downsize Risk
• Ability to commercialize
• Projects have to be profitable without Government Grants
• Access to raw materials
• Access to skills / Training
• Trade/FIPA Agreements
• The requirement for Carbon (mining to installation)
“Analytica Advisors said in its seventh
annual report that despite years of
publicly funded support for research and
development, losses for clean tech
companies widened to $3.56 billion in
2015 from $3.18 billion in 2014, and
shareholder returns limped in below the
Canadian average. Figures for 2016 are
not yet available.
https://www.bnn.ca/awash-in-red-ink-
canadian-clean-tech-struggling-despite-
ottawa-s-green-goals-1.729679
Cleantech companies are losing money

10.  You need substitute material for carbon based material, i.e. coal, metals, plastics, wood,
etc.
 You cannot transformed an economy overnight
Transforming to carbon-less economy

11. Clean Tech examples

12.  Refining
 Lithium
 Vanadium
 Rare Metals
 Assembling
 Fabrication
 Assembling
 Raw Materials
 Lithium
 Vanadium
 Rare Metals
 Aluminum
 Nickel
 Copper
Environmental Impact of Clean Technology

13.  Source - https://investingnews.com/daily/resource-investing/critical-metals-investing/rare-earth-investing/rare-earth-
producing-countries/ or http://www.mining.com/canada-identifies-top-rare-earth-projects-48319/
Rare Metals Proven Reserves
Ranking Country Reserves
1 China 105,000 (MT)
2 Australia 14,000 (MT)
3 Russia 3,000 (MT)
4 India 1,700 (MT)
5 Brazil 1,100 (MT)
6 Thailand 800 (MT)
7 Vietnam 300 (MT)
Canadian industry want to secure 20% of global supply by 2018. At the moment
China produces some 90% of the world's rare earths – used in a variety of
industries including green technology, defence systems and consumer
electronics – and also consumes the bulk of global production. – Mining News -
2014

14. Lithium Production
1. Australia - Mine production: 13,400 MT
2. Chile - Mine production: 12,900 MT
3. Argentina - Mine production: 3,800 MT
4. China - Mine production: 2,200 MT
5. Zimbabwe - Mine production: 900 MT

15. Vanadium - Production
1. China - Mine production - 42,000 MT
2. South Africa - Mine production - 19,000 MT
3. Russia - Mine production - 15,000 MT
4. Brazil – Mine Production – 2,800 MT

16. Graphene - Production
1. China - Mine production - 780,000 MT
2. India - Mine production -170,000 MT
3. Brazil - Mine production - 80,000 MT
4. Turkey - Mine production - 32,000 MT
5. Canada - Mine production - 32,000 MT

17. Canada Mining – Clean Technology Metals
 Canadian industry want to secure 20% of global supply by 2018. At the moment China produces
some 90% of the world's rare earths – used in a variety of industries including green technology,
defence systems and consumer electronics – and imposes export quotas. Frontrunners among
Canadian juniors racing to build the country's first rare earth mine include Rare Element Resources
(TSE:RES), Avalon Rare Metals (TSE:AVL) and Quest Rare Minerals (TSX:QRM) while Saskatoon-
based Great Western Minerals (CVE:GWG) is recommissioning the Steenkampskraal mine in South
Africa with Chinese backing.
 Canada hosts vanadium deposits in locations such as Manitoba, Ontario and Quebec. Total
reserves are unknown at this time, but plenty of companies are working in the country to develop
projects
 Lithium projects – Manitoba, NWT, Ontario and Quebec
 Graphite – New Brunswick

18. Venture Capital Issues

19. United States Subsidies for Clean Technology

20.  https://qz.com/794542/air-pollution-map-by-country-fine-particulate-matter/
Air Quality
How many of these countries
are OPEC?
How many of these countries
are using coal as their chief
source power?
How many of these countries
are emerging economies?

21. Source - http://www.canadianmanufacturing.com/environment-and-safety/manitoba-saskatchewan-excluded-ottawas-2b-carbon-fund-
195527/
Canada and Cleantech Funds

22.  http://business.financialpost.com/opinion/canada-may-already-be-carbon-neutral-so-
why-are-we-keeping-it-a-secret
Canada and Carbon Neutral

23.  https://www.youtube.com/watch?v=nCyPcGo-Gro
Carbon Tax / Costs

24. Source - http://www.cbc.ca/news/canada/saskatoon/australian-carbon-tax-opponent-chris-berg-
saskatchewan-1.3884765
Australia and Carbon Tax
Berg says the Australian carbon tax, which was introduced in 2012 and repealed in 2014, failed
because it raised taxes on household consumables and energy prices.
His organization was a strong opponent of the Australian carbon tax, having pushed heavily for
it to be repealed.
Speaking to CBC Radio's The Afternoon Edition, he said a carbon tax in an economy the size of
Australia's would not have done anything to stop the progress of global warming.
"We need to do a large, international effort if we're going to make any change in that area," said
Berg.
"When we introduced it, the rest of the world didn't follow, it was a failed policy."

25. Taxation and Growing Economy
“Where has massive increase in taxation grown an economy in the world”

26. Source - https://www.youtube.com/watch?v=5Smhn1gL6Xg&t=62s
Sensible Environmentalist / CO2

27.  Source - http://www.bnn.ca/awash-in-red-ink-canadian-clean-tech-struggling-despite-ottawa-s-green-goals-1.729679
BNN / Cleantech
Canadian clean technology companies are
struggling to stay afloat and falling behind
global peers even as Ottawa promises to boost
the sector and move the country toward a low
carbon future, a report released on Thursday
showed.
Analytica Advisors said in its seventh annual
report that despite years of publicly funded
support for research and development, losses
for clean tech companies widened to $3.56
billion in 2015 from $3.18 billion in 2014, and
shareholder returns limped in below the
Canadian average. Figures for 2016 are not yet
available.

28. Source - https://www.canadianmanufacturing.com/environment-and-safety/saskatchewan-announces-climate-change-strategy-no-carbon-tax-205234/
Provinces / Carbon Taxation - Saskatchewan
The Saskatchewan government
has introduced a climate-change
strategy that inches toward a
price on carbon emissions, but
leaves large parts of its economy
untouched.
And it doesn’t include a carbon
tax, which Environment Minister
Dustin Duncan was happy to
point out.
Federal Environment Minister Catherine McKenna said the
plan is a good step toward carbon pricing.
“Saskatchewan’s new plan proposes a performance
standard for heavy industry that includes a carbon market.
Momentum for carbon pricing is growing.”
But she said it will have to be wider to satisfy Ottawa.
“Based on what’s in today’s plan, Saskatchewan’s price
likely wouldn’t hit our standard, because it applies only to
heavy industry instead of being economy-wide.”
2015 Election Promise
Justin Trudeau also pledged to hold annual first ministers' meetings. The last such meeting was in early 2009, when
the prime minister and premiers gathered to discuss the economy.
Source: http://www.cbc.ca/news/politics/canada-election-2015-learned-this-week-aug22-1.3200542 - Results -
Ottawa is dictating Carbon Pricing to the Provinces

29.  It takes time to move ideas from incubation to market (Testing)
 Canada is small market as such raising capital is very difficult compare to countries like
United States that have a large venture capital market
 Cleantech requires extraction, refining, fabrication, delivery and installation
 Cleantech is not truly clean tech until it is installed. You can not harness wind, solar or
methane without turbines, panels, storage and delivery systems
 Businesses need to be viable without subsidies. In the 1990s there was a big push for
ethanol. The problem is once you removed the subsidies ethanol as not profitable
 Climate change is overrated. You can put 30+ climate change specialist in a room and get
30+ different answers. More information can be found by searching the internet or google.
Here is one example - https://www.youtube.com/watch?v=5Smhn1gL6Xg&t=595s
 CO2 is foundation for life on this planet. Plants need CO2 for their development cycle.
Summary / Cleantech