The United States has upped the ante as far as encouraging investment in Canadian clean energy, and some Canadians believe they are losing technology to their neighbor to the south, which has large incentives for investments in clean energy technologies. The US plans to invest $59 billion from its economic stimulus package towards clean energy with the goal of doubling its renewable energy supply and reducing dependence on foreign oil. Canada has not added any renewable Canadian clean energy financing since 2007. At that time the Canadian government allotted US$1.4 billion towards Canadian clean energy initiatives. It will have distributed the last of its money by this fall.  Read more about Canada Biofuels Market Potential

Canada’s federal government’s 2009 budget is expected to include a $1 billion (to be distributed over 5 years) Green Infrastructure Fund for generation of alternative Canadian clean energy, and another $1 billion Canadian clean Energy Fund for research and development projects. Even so, the United States is far outspending Canada.

Canada’s renewable Canadian clean energy companies now have to compete with peers in the US who have access to plenty of money in the way of tax incentives and grants. The question is whether a start-up business making solar panels, electric cars, or some other generator or user of clean energy will want to set-up in Canada, or take advantage of American incentives.

Canadians view the new US incentives as signaling that renewable clean energy is gaining major importance in economic recovery, environmental stewardship, and reducing dependence on foreign oil. While nobody has done any numbers, there are anecdotal accounts of international companies shifting their business away from Canada to the US and US companies in Canada taking their business back across the border into America.

The US$60 billion is divided between $20 billion in tax incentives for clean energy industries and nearly $40 billion for projects under the US Department of Energy. This makes Canadian clean energy companies afraid of losing innovation and jobs if companies in their earliest stages simply decide to locate in the US to begin with.

However, some Canadian clean energy experts believe that the US’s attention to alternative energy sources like geothermal heat can’t help but raise the profile of the industry in other countries, making it easier for them to raise private capital. Indeed, the Toronto Stock Exchange has been quite optimistic about the prospects of Canadian clean energy technologies, despite the huge incentives in the US.

For one thing Ontario has a strong push going for green policies, with promised investments in companies that make electric vehicle batteries, and rebates of up to C$10,000 for people who buy plug-in cars. Many Canadians are happy to be able to sell goods to Americans who are taking advantage of tax incentives for making their homes greener.