In environmental innovation, technological change is important in overcoming many environmental hurdles such as climatic changes, loss of biodiversity and severe organic pollutants (Statistics Canada, 2001). Technological innovation is indeed the final step in solving environmental issues. Adequate knowledge about the world and use of knowledge to create systems will allow innovation to flourish.Systems that take care of actions of the people of Canada and what they know are adopted since they lead to more sustainable economy (Neary et al. 2001). Many problems in Canada have been solved through new innovations. Climate change has been learned about how it functions and how it reacts to heat –trapping emissions pumped in to the atmosphere through new innovation. To start down the path, Canada adopted the agreement about innovation but was slowed down by the government through reduction of emissions using existing systems and structures that favor quo status and discourage innovations. The current environmental fiscal reform which is the setting of policies to ensure societal cost of any activity is included in the price has been set.