Canada could expand clean technology exports and capture more economic value by developing higher-value products and diversifying international markets, according to a new report from Export Development Canada (EDC).
The federal Crown corporation’s annual cleantech report identifies six value chains where Canadian capabilities align with global demand: batteries, electric vehicles, fuel cells and hydrogen technologies, nuclear energy, electricity grid equipment and critical minerals.
The report comes as geopolitical tensions, energy price volatility and supply chain disruptions prompt countries to strengthen energy security and reassess their sources of clean technology, equipment and materials.
EDC says Canada has opportunities to build on its existing capabilities, but capturing more value will require expanding into advanced technologies, components, equipment and services while reaching new export markets.
Trade deficit highlights room for growth
Canada’s cleantech sector contributed $70 billion to real gross domestic product in 2024, representing three per cent of the country’s total GDP, and supported 363,000 jobs nationwide, according to Statistics Canada figures cited in the report.
Despite the sector’s economic contribution, Canada recorded a $15.6-billion cleantech trade deficit in 2024, indicating an opportunity to increase the value generated domestically and improve the country’s position in international markets.
“The case for cleantech is increasingly economic as well as environmental. As countries look to strengthen economic resilience, energy security and long-term competitiveness, clean technologies are becoming a strategic industrial opportunity rather than simply a climate policy tool,” explains Prerna Sharma, author of the report and principal economist at EDC.
The report, titled Canada's cleantech opportunity: Building economic resilience through trade and exports, uses an economic complexity analysis to identify areas where Canada could strengthen its participation in global clean technology supply chains.
EDC says international trade will remain important for access to fuels, equipment, components, critical minerals, technology and financing. Expanding cleantech trade, however, could give countries more options, reduce dependence on a limited number of suppliers or fuel sources and make supply chains more flexible.
The federal government has also identified international market access as a priority for Canadian clean technology businesses.
"Global investment in clean technology has surpassed $2 trillion annually, and Canada is ready to compete and win here," said Maninder Sidhu, Minister of International Trade. "Our environmental and clean technology sector already supports 363,000 jobs from coast to coast. By securing new trade agreements, we will ensure Canadian companies in this sector reach new customers and markets around the world."
Financing and market diversification
The report identifies access to capital as a challenge for emerging clean technologies, even as investment continues to favour the sector. Funding is concentrated in mature technologies that can scale and have demonstrated demand, while moving newer technologies from demonstration projects to commercial deployment remains one of the most difficult financing stages.
For Canadian businesses, the report says, opportunities will depend on developing solutions that meet specific market needs and can compete on cost, reliability and ease of deployment.
Production of several major clean energy technologies and critical minerals remains concentrated in a small number of markets, with China continuing to play a significant role. EDC identifies Europe and the Asia-Pacific region, along with other markets investing in energy security and electricity infrastructure, as potential destinations for Canadian exporters.
The report also points to recent energy shocks, geopolitical tensions and supply chain disruptions as reasons to identify which domestic capabilities can contribute to economic resilience while creating opportunities for trade and growth.
Canada’s prospects will depend not only on the technologies it can produce, but also on its ability to develop more sophisticated products and services within existing value chains.
Moving beyond raw materials
Critical minerals illustrate the potential to capture more value domestically, according to EDC. While extraction provides a foundation for the sector, further opportunities could come from processing, advanced materials, specialized equipment, recycling and technical expertise.
The report argues that developing these higher-value capabilities could help Canadian businesses retain more economic benefits from the energy transition rather than concentrating on the supply of basic resources.
The approach is consistent with an earlier EDC report that found Canada could add as much as $100 billion to GDP by 2035 by moving into more sophisticated, higher-value products and services.
The latest analysis identifies batteries, electric vehicles, fuel cells and hydrogen technologies, nuclear energy, electricity grid equipment and critical minerals as areas where Canada could build on existing strengths to serve international demand.
EDC says strengthening these value chains and expanding access to foreign markets could help Canadian companies capture additional export opportunities while supporting the country’s economic resilience.