Corporate Knights, a national magazine about socially responsible business in Canada, released its list of the Top 10 publicly traded clean technology companies in Canada and a Top 10 list of the emerging cleantech leaders of tomorrow. (Disclosure: I was on the five-person advisory panel that selected the companies). The list was unveiled at the Cleantech Forum in Toronto on Thursday, an appropriate venue given the hundreds of VCs in attendance.

First, the bad news. The list of established publicly traded cleantech leaders was a difficult one to compile. We simply don’t have many large players in Canada, and the ones we do have are either in a struggling sector (fuel cells, such as Ballard) or have been acquired by foreign companies (i.e. GE’s acquisition of Zenon). Here’s the list in alphabetical order:

1) Boralex
2) Canadian Hydro Developers
3) Carmanah Technologies
4) Dynetek Industries
5) Hydrogenics
6) RuggedCom
7) SunOpta
Westport Innovations
9) WFI Industries
10) Xantrex Technology

While I like Boralex and Canadian Hydro, they’re both developers of wind and small hydroelectric projects so I personally don’t see them as cleantech — though I guess that’s a matter for debate. SunOpta is a very successful company that makes most of its money from making organic foods. Its bioprocess business, which is targeting cellulosic ethanol production, is still in its infancy and is more a startup than anything else. WFI Industries, meanwhile, isn’t even Canadian — it was selected because it lists on the Toronto Stock Exchange. That said, my faves on the list are Xantrex (power electronics), RuggedCom (smart grid communications), and Carmanah (solar LED lighting). Westport and Dynetek are interesting as well, and Hydrogenics is a solid company that’s had a tough time making fuel-cells and hydrogen a money-making business. I can’t emphasize how difficult it was to put this list together. If the criteria was strictly companies that are publicly traded, I suppose we could have added flow-battery developer VRB Power or hybrid-locomotive innovator RailPower, but both companies — while their technologies are exciting — have been hit with product problems and order delays. It’s a troubling sign that Canada has a long way to before it can claim to have built a financially healthy cleantech sector.

Now, the good news. Compiling the list of emerging companies was just as difficult, but for a completely different reason. The number of companies out there doing innovative stuff is quite large, and whittling them down to just 10 was quite the exercise. Here’s the list of companies that made the cut:

1) 6N Silicon (solar-grade silicon)
2) Enerworks (solar-thermal heating)
3) Ensyn Technologies (biomass pyrolysis)
4) Group IV Semiconductor (solid state lighting)
5) Iogen (cellulosic ethanol)
6) Magenn Power (floating wind generation)
7) Menova Energy (solar thermal, PV, lighting and algae production)
Plasco Energy (solid waste gasification)
9) REGEN Energy (intelligent load control)
10) Triton Logging (underwater log harvesting)

One thing I was surprised about, and this didn’t strike me at the time we were compiling the list, is that nine of the 10 companies come from Ontario, and a majority of those come from the Ottawa and Toronto areas. I’ll fully admit that there’s got to be some bias here, since I live in Toronto and Cleantech Group co-founder Nick Parker is also a proud Torontonian. I also know there are some terrific companies out west, particularly in Vancouver and around Calgary. Vicky Sharpe, CEO of Sustainable Development Technology Canada, was also on the advisory panel and would have a more cross-country perspective, given her mandate, but I should be clear now that the list could have just as easily been made up of B.C. or Alberta based companies.

That said, the ease with which we chose Ontario companies somewhat validates the feeling by many, including myself and Parker, that southern Ontario needs to get its act together and do a better job of recognizing, nurturing and enabling the emerging cleantech companies in the region. I know you can’t force the creation of a cluster — it’s more an organic process — but you can recognize something that’s already there. We need to brand the region. Do a better job of recognizing its strengths, and position it as a place that attracts venture capital, talent and the kind of jobs that could re-energize Ontario’s struggling manufacturing sector. It’s also a great opportunity to create products that could be exported around the world. It would, I should add, be great to see corporate leaders, such as RIM co-CEO Jim Balsillie and BCE new chief George Cope, embrace and promote the sector, not just as good corporate citizens but as the heads of companies that have a role to play in providing communications and software that enables clean technologies. We have too few high-profile names in this region, so who we have we need.

Sustainable Development Technology Canada has played a huge role, not just in Ontario but nationally, in helping emerging cleantech companies get through “the valley of death,” as SDTC CEO Vicky Sharpe described it during the conferece. The “valley” is that point where startups have a difficult time raising early-stage capital to demonstrate their technology. VCs, particularly Canada’s overly conservative VCs, stay clear of that risk. Those companies that do end up raising capital end up relying on VCs in the United States (who better see a good opportunity when it meets them in the face). “The issue we have is a very conservative venture capital community that does not recognize opportunity in its own backyard,” said Sharpe while the Corporate Knights list was being unveiled.

She’s absolutely right. It’s the reason why the list of “emerging” companies to choose from was so huge, and the list of “established” companies to choose from was so scant. Yes, VC investments in Canadian cleantech companies hit a record in this third quarter, but many call it an anomoly at a time when cleantech’s proportion of overall VC investment in Canada is shrinking while in the U.S. it’s growing. As well, how much of that money in this record third quarter came from U.S. venture firms? I imagine it’s a lion’s share.

Among some relevant quotes at the Cleantech Forum:

“I’d like to see Canada develop policies that give us a competitive advantage,” said Robin Louis, president of the Canadian Venture Capital Association, describing local VC investment in cleantech as unhealthy. “I’d like to see us do it for Canada, and crush the rest of the world!”

“The trillion-dollar question is how Canada captures some of that (cleantech) action. It’s no longer good enough for us to just chop down trees and suck oil out of the ground,” said Toby Heaps, founder and editor of Corporate Knights.

“We’re too quiet about our own successes,” said Peter Love, chief energy conservation officer of Ontario.

Ditto. Ditto. Ditto — if you ask me. And now I end my patriotic rant.