General Market Commentary

Today the Bank of Canada released the third quarter issue of the Business Outlook Survey, which summarizes interviews conducted by the Bank’s regional offices with the senior management of about 100 firms selected to reflect the composition of the gross domestic product of Canada’s business sector. According to the survey, firms expect their sales growth to be subdued over the next 12 months. Many expect returning inflation to the Bank’s two per cent target will take longer than three years. The cost of borrowing remains at five per cent for now.

In other news, Ottawa has frozen the activities of federally funded Sustainable Development Technologies Canada (SDTC), after a report criticized its management of public funds. SDTC is in the middle of a five-year agreement with the federal government to distribute $1 billion to small and medium businesses in the cleantech sector. Investigators raised questions about SDTC’s decision to distribute $38 million in emergency “relief payments” in 2020 and 2021 (during the COVID-19 pandemic), and also about potential conflict of interest issues.

Hot Sector News

This month we’re putting the spotlight back on  H2O Innovation Inc. (TSX: HEO), the subject of our inaugural Market Watch column. On October 3, the company announced a milestone agreement to be acquired by Ember.

The transaction values H2O Innovation at $395 million, on a fully diluted equity basis. Ember is funding its portion of the purchase price with capital it manages on behalf of its limited partners via private equity fund capital as well as select co-investors, including funds affiliated with the Ontario Power Generation Inc. Pension Fund.

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Founded in 2000 by entrepreneur Frédéric Dugré, H2O was inspired by the Walkerton water crisis, when seven people perished and hundreds were made ill after the town’s municipal water was contaminated. The company has had a steady growth over its 23-year history. With over 1,000 employees and 14 offices and manufacturing facilities in five countries, the company has built a diversified revenue base. It’s a Canadian company with an international presence.

From left to right: Guillaume Clairet, COO, Frédéric Dugré, President and CEO, Marc Blanchet, CFO. Photo credit: Mano Photographe

H2O Innovation won the “Water Company of the Year” award at the 2020 Global Water Awards. From left to right: Guillaume Clairet, COO, Frédéric Dugré, President and CEO, Marc Blanchet, CFO. Credit: H2O Innovation/Mano Photographe

“We are very excited to partner with Ember to accelerate growth. We look forward to leveraging their relationships, resources, and expertise as we execute on our growth strategy in a manner consistent with our core values of loyalty, entrepreneurship, achievement and unity,” stated Dugré. “As a private equity firm investing in infrastructure solutions to reduce carbon intensity, increase resource efficiency, and enhance climate resilience, Ember is the ideal partner for H2O Innovation.”

Ember and H2O Innovation have put in place appropriate measures to ensure a seamless transition to the new ownership, with minimal disruption for the employees of H2O Innovation, as well as for the corporation’s customers and partners.

About Us & Group of Companies - H2O Innovation

The H2O Innovation team at the offices in Quebec City, Quebec. Credit: H2O Innovation.

“Ember looks forward to partnering with the H2O Innovation management team to continue building a leading integrated water solutions company focused on providing best-in-class technologies and services to its customers,” stated Elena Savostianova, managing partner of Ember.

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“Sustainability is core to Ember’s investment philosophy, and water and wastewater solutions are central to our sustainability thesis. While H2O Innovation has achieved significant success in delivering its services and solutions to its customers both organically and through acquisition-driven growth since its inception, we see a unique opportunity for H2O Innovation to enter a new phase of growth supported by our capital and industry expertise. We intend to take a long-term view as we support the ongoing implementation of H2O Innovation’s existing strategy, while continuing to find additional opportunities to better serve its customers.”

Today the stock price of H2O Innovation is $4.20.

Stocks to Watch

Here is a list of Canadian cleantech stocks that we are monitoring for this column. This list of public companies is by no means complete, and we are open to suggestions from our advisors and readers.

Name Symbol Price in $CDN
(September 15/23)
Price in $CDN
(October 16/23)

% Change

Algonquin Power & Utilities Corp. AQN $9.72 $7.78  -19.96%
Anaergia Inc. ANRG $0.42 $0.34 -19.05%
Ballard Power Systems Inc. BLDP $5.86 $5.04 -13.99%
*Biorem Inc. BRM $0.93 $0.87 -6.45%
Boralex Inc. BLX $33.44 $27.22 -18.60%
*CHAR Technologies Limited YES $0.56 $0.54 -3.57%
Electrovaya Inc. EFL $4.16 $3.44 -17.31%
Engine No 1 Carbon Streaming ETF NETZ $53.30 $70.70 +31.66%
EverGen Infrastructure Corp. EVGN $2.70 $2.54 -5.93%
Greenlane Renewables Inc. GRN $0.22 $0.20 -9.09%
H2O Innovation Inc. HEO $2.78 $4.20 +51.08%
Li-Cycle Holdings Corp LICY $5.94 $3.83 -35.52%
Loop Energy LPEN $0.55 $0.17 -74.55%
*Thermal Energy International Inc. TMG $0.12 $0.19 +58.33%
TransAlta Renewables Inc. RNW $13.00 $12.48 -4.00%
UGE International Ltd. UGE $1.46 $1.74 +19.18%
Westport Fuel Systems Inc. WPRT $9.63 $7.49 -22.22%
Zinc8 Energy Solutions Inc. ZAIR $0.030 $0.010 -66.67%

*The author of this column owns equity. It is not meant to be an endorsement, but simply a statement of this fact.

James Sbrolla is a veteran of the financial and environmental industries. His career has been focused primarily on public and private companies in the clean technology sector. He is a member of the Environment Journal Advisory Board.

This column is written by James Sbrolla and Connie Vitello, editor of Environment Journal. To pitch an idea for an upcoming Market Watch column, or to suggest a stock, please email


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