My Clean Break column today laments the fact that Canadians didn’t give the idea of a carbon tax serious debate or consideration in the last federal election. The Liberals, under Stephane Dion, proposed a carbon tax as part of a “Green Shift” plan that would use proceeds from that tax to lower personal and income taxes. In other words, it was revenue-neutral for the government. Unfortunately, the Liberals and its leader did a poor job of communicating the plan and the Conservatives, under Prime Minister Stephen Harper, did an excellent job of scaring Canadians into rejecting it.

My disappointment comes not with the Liberals losing, it comes from the fact that the idea of a carbon tax is unlikely to be entertained on the Canadian political scene for some time now given the rough ride the Liberals got. It’s for this reason I’m someone elated that the idea is being given serious attention in the United States, and not just by Al Gore and friends. Republicans appear quite happy to entertain the idea, and so too are some of the major oil companies — Exxon Mobil included.

Now, who knows where this will go? But it’s nice to know that, in a continental context, the idea is still alive and that people are willing to compare and contrast the benefits of a carbon tax against a cap-and-trade system that many, including myself, perceive as inefficient, complex and prone to manipulation.

You may have heard that Hayward, Calif.-based OptiSolar announced last week cuts to 290 staff, nearly half its workforce. It’s just the latest round of job shedding in the solar and wind industries over the past few weeks. What I’m surprised to hear is that OptiSolar had more than 600 employees — that’s incredibly fast growth for a company that until a year ago was operating in stealth mode. This seems to be a common theme with these industry cuts: companies that invested in rapid expansion just a few months ago are forced to take an abrupt step backward.

Peter Carrie, who heads up OptiSolar’s Canadian solar development operations, said the 18 or so employees in Canada haven’t been affected by the cuts and the projects planned for Sarnia and Petrolia are still going ahead as planned, though possibly a little slower. OptiSolar has more than 200 megawatts worth of projects on the go in Ontario, each broken up into 10-megawatt chunks according to the rules of the province’s standard offer program. So far about 1 megawatt has been installed using solar PV modules from the company’s Hayward manufacturing facility. Part of the job cuts — 105 — have to do with OptiSolar’s ambitious plans to open a new manufacturing facility in Sacramento that, at full capacity, would have been capable of churning out 2,000 solar panels a day. That facility was to employ about 1,000 people but the company has decided to suspend, for now, the high-volume manufacturing plant.

For background on OptiSolar, check out this previous post.

Worldwide cleantech venture investments were up 38 per cent to $8.4 billion (U.S.) in 2007 2008, according to the Cleantech Group. Companies in the United States raised $5.8 billion, or 68 per cent of the global total, up 56 per cent compared to 2007.

China was up 22 per cent on the year. Germany was up a staggering 217 per cent. Israel, not to be outdone, was up 224 per cent.

And Canada? Shamefully, cleantech companies from my home and native land only managed to raise $159 million from 14 disclosed financing rounds, down 58 per cent from 2007. Of the countries mentioned by the Cleantech Group that saw a fall in 2008 investments, Canada performed the worst — the others were the U.K., which fell by 11 per cent, and India with a 20-per-cent decline.

I’m bummed. I know there’s huge talent in this country, smart entrepreneurs, game-changing ideas and a solid stable of cleantech ventures — just look at the list of companies that have been funded by Sustainable Development Technology Canada over the years, and more seem to emerge by the day. Where are the champions from the financial community? Academia? Government? The high-profile talking heads ready to promote the best and brightest that Canadian, Ontario, or Toronto cleantech has to offer? Where’s the branding? The chest-thumping?

I need a glass of wine.

Maybe I’m going on a tangent here, but I can’t help but see this as an early sign of Dutch Disease, which happens when there is a reallocation of resources from high-tech service and manufacturing industries to the exploitation of natural resources, particularly as the prices of those resources rise. The Canadian government’s obsession with rapid oil sands development, the run-up last year in the price of oil, and the lack of serious attention to high-tech innovation, including cleantech, does fit that bill. It seems like the rest of the country is being gutted to support a one-trick pony, which is a blessing or a curse depending on whether you’re riding the pony or not.

I recall a speech by Mike Lazaridis, founder and co-chief executive of Research In Motion, back in March 2006 in Toronto. “Our oil resources can only carry us so far. What are we going to do after they run out?” asked Lazaridis. “What happens if there’s a major breakthrough and we’re no longer as dependent on oil as we have been in the past? What will we do? Will we have made the wise research investments, industrial investments, infrastructure investments to prepare Canada for a world without oil?”

In a word, no. These latest cleantech investment figures, IMO, are but one example of this neglect.

Burnaby, B.C.-based solar PV maker Day4 Energy has cut 95 staff to meet the “realities” of the new solar economy — whatever that means. According to a cached version of its Web site the company had 280 employees as of Dec. 31, 2008. The cuts bring them to about 185.

“We are seeing continued strength in demand for our product in Europe and remain confident in our contracted sales for 2009, however, given the broader economic environment and seasonal weather patterns we are being proactive in managing our business to avoid inventory build-up,” said Day4 Energy co-founder and president George Rubin.

Fair enough, but a third of staff? Talk about hacking off a limb or two. (more…)

The latest sign of trouble in the wind sector hit Ontario yesterday when turbine tower maker DMI Industries announced it was cutting 20 per cent of its workforce to cope with a sudden slowdown in the development of wind projects. DMI has three manufacturing facilities — Oklahoma, North Dakota and Ontario. The company had about 950 employees but is now down to 750. At the Fort Erie, Ontario, plant about 40 staff were let go.

What’s scary is how quickly fortunes in the industry changed. DMI had just completed a 25 per cent expansion of its Fort Erie facility in October to accommodate what was expected as significant market growth. Indeed, 2009 was supposed to be a big year. But the company now figures installed megawatts of wind power will be 25 to 35 per cent lower than those for 2008.

Spokesperson Belinda Forknell said the company was blindsided. “Wind-farm developers, as the credit situation continued and persisted, have just had great difficulty securing financing for their projects, and that trickles down.”

As bad as it looks, the company expects it will be a short-term setback. They also have high hopes that the industry will kick back into growth mode once the Obama administration takes the reins. After all, aren’t these the jobs — green-collar jobs — the ones we’re supposed to be creating?