Mapping Canada’s emerging adaptech market

MaRS partnered with Tailwind Futures to survey climate resilience technologies and the innovation ecosystem that is supporting them. The resulting Canadian Adaptation and Resilience Innovation Playbook tracks public and private demand alongside startup and investor activity to identify where climate risk awareness is — and is not — translating into scalable solutions.

The devastating wildfire that tore through Jasper, the freak hailstorm that hit Calgary and the flash floods that damaged hundreds of properties in Toronto revealed Canada’s vulnerability to extreme weather. In 2024, insured losses from extreme weather events exceeded $8 billion. And as climate shocks intensify, our communities, infrastructure and economy are increasingly under threat.

While emission reduction remains essential, it is no longer sufficient. We need to adapt to the realities of our changing climate and bolster Canada’s ability to prepare, prevent and respond to climate impacts. The economic case for building resilience is clear: Research shows that for every $1 spent on adaptation measures today, an estimated $13–$15 will be returned through direct and indirect benefits.

In partnership with Tailwind Futures, MaRS Discovery District developed the Canadian Adaptation and Resilience Innovation Playbook to establish a baseline for Canada’s emerging adaptech sector. It maps public and private demand alongside startup activity and investor funding to identify new opportunities.

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This playbook offers an early look at this nascent and developing sector to help track progress in the years to come. Here are some of the key takeaways:

Public spending remains largely reactive

• Government spending patterns across all three levels show a reactive and relatively non-diversified approach. Most public spending on adaptation measures is triggered by damage, limiting governments’ ability comprehensively to plan, pilot and scale preventative solutions ahead of risk across all sectors.
• The majority of federal spending in 2024 was focused on disaster relief, with 70 percent of adaptation spending allocated to infrastructure; water and sanitation; and cities and settlements.
• Provincial and territorial spending in 2024 was highest in British Columbia, Alberta and Ontario (70 percent), due to recent wildfires, floods and major climate events in those regions. Overall, provinces and territories had narrow adaptation spending profiles, with most allocating funds to just a few sectors.
• Of the six municipalities that were reported on, 92 percent of adaptation spending in 2024 was directed to water and sanitation, indicating the urgency to repair and upgrade aging water infrastructure and stormwater management systems.

Corporate awareness has not translated into action

While 96 percent of major Canadian corporations recognize climate change as a material threat, only 11 percent disclose quantifiable spending on adaptation.

A misaligned supply landscape

• There is a growing adaptation presence in Canada’s cleantech sector, with adaptech ventures making up 10 percent of funded climate startups. However, pure-play adaptation startups currently receive only 4 percent of total climate funding.
• Funding is narrowly concentrated, with the bulk of capital being directed toward solutions in food, agriculture and forestry. Meanwhile, the smallest portion of startups are working on solutions in areas where there is high public demand, such as in cities and settlements; water and sanitation; and ecosystems.

A road map to recovery

The playbook highlights key areas of opportunities for investors, entrepreneurs, adopters and policy-makers:

• Bright spots: The food, agriculture and forestry sector has an established venture pipeline and strong commercial traction and demand.
• Hidden gems: There is clear demand for solutions in water and sanitation, as well as infrastructure, but these areas are currently undercapitalized.
• Blind spots: Solutions to address emerging risks in health and ecosystems lack defined commercialization pathways, demand signals and early-stage funding. Technologies in this category are sparse, early-stage or absent, signalling a need to create R&D pathways and an integration of adaptation metrics into existing systems to lower barriers to entry.

Building resilience for tomorrow — today

Closing Canada’s adaptation innovation gap will require coordinated action between private and public sectors. By streamlining public procurement and translating risk awareness into investable demand, Canada can lead the global resilience landscape and strengthen its economy, communities and infrastructure in the face of climate change. Through such initiatives as the MaRS Adaptech Accelerator, we aim to bring these critical technologies to the forefront, ensuring Canadian communities are strong and resilient amidst the climate challenges ahead.

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MaRS is working to help speed up the development of adaptation and resilience solutions. Learn about the Adaptech Accelerator here.