The Direction of Canada’s Critical Minerals Strategy

In the coming months, the Government of Canada will publish its finalized Critical Minerals Strategy. This document will serve as the federal government’s comprehensive framework for how it will seize opportunities to power the green and digital economy, both domestically and abroad.

An Overview

As the demand for critical minerals and the manufactured products that they go into continues to substantially increase, the Government of Canada has recognized the importance of becoming a global leader in the industry. To reflect this and build upon previous pledges to expand involvement, the federal government released a Discussion Paper that introduced their proposed approach to advance Canada’s leadership as a responsible, inclusive, and sustainable producer of critical minerals.

Canada’s Approach

In order to immediately solidify its position in the industry, the Strategy includes early prioritization plans for select minerals, such as copper and graphite. The minerals to be prioritized in the initial phases of the strategy were selected for their associated economic growth, employment opportunities, supports to value-added products, industrial value, and attraction of foreign direct investment.

Irrespective of the mineral or timeline, it is projected that Canada will take a five-part value chain approach that will follow all the stages from exploration  extraction  intermediate processing  advanced manufacturing  recycling. The federal government is pursuing this approach as it will maximize the benefits received from the circular economy and minimize the supply chain risks.

Strategy Focuses

As outlined in the Discussion Paper, the federal government aims to implement the following six focuses in the Strategy.

Drive Research, Innovation, and Exploration

The federal government will build upon private sector investments and utilize the initiatives of Budget 2021 and 2022 to bolster various aspects of the critical minerals value chain, including:

  • $79.2 million for public geoscience and exploration;
  • 30% Critical Mineral Exploration Tax Credit;
  • $47.7 million for targeted critical mineral R&D through Canada’s research labs; and
  • $144.4 million for critical mineral R&D, and the deployment of technologies and minerals to support value chains.


Accelerate Project Development

Through aligning with provincial and territorial partners, in addition to leveraging existing resources, expertise, and programs, the federal government will accelerate the expansion of strategic mineral mining, processing, manufacturing, and recycling. Supports from Budget 2021 and 2022 to achieve this include:

  • $1.5 billion ($1 billion in new funding, $500 million from existing funds) over six years, starting in 2024–25, for the Strategic Innovation Fund to support critical minerals projects;
  • $40 million to support northern regulatory processes in reviewing and permitting critical minerals projects; and
  • $21.5 million to support the Critical Minerals Centre of Excellence to develop federal policies and programs, and to assist project developers in navigating regulatory and federal support measures.


Build Sustainable Infrastructure

To meet the pressing demand for Canada’s critical minerals, infrastructure must be readily available and capable to navigate the country’s difficult terrain. Strategic investments to help solve the current infrastructure constraints include:

  • Up to $1.5 billion in Budget 2022; and
  • A partnership with the Canada Infrastructure Bank that will draw on their $5 billion clean power priority investment and $5 billion in trade and transportation investment.


Advance Indigenous Reconciliation

Canada’s Critical Minerals Strategy will have meaningful engagement, partnership collaboration, and inclusion of Indigenous peoples that will be informed by the United Nations Declaration on the Rights of Indigenous Peoples and the development of a National Benefits-Sharing Framework. Budget 2022 will provide additional supports to this through a $103.4 million investment to advance economic reconciliation in the natural resource sector, which includes a minimum of $25 million to support Indigenous participation in the Critical Minerals Strategy through early engagement and community capacity building.


Grow A Diverse Workforce and Prosperous Communities

Developing Canada’s Critical Minerals Strategy and associated value chain will create new economic opportunities across Canada. In order to create a diverse workforce and prosperous communities, NRCan will leverage federal skills and training initiatives to help the workforce grow and meet the demand driven by developing the domestic critical minerals industry.


Strengthen Global Leadership and Security

In order to strengthen its global position in the critical minerals industry, Canada has formalized bilateral cooperation agreements with the US, EU, and Japan, as well as currently is in the process of engaging with additional allies. Global partnerships that promote Canada’s mining leadership will be strengthened from a $70 million investment in Budget 2022.

Next Steps

As the public consultations on the Discussion Paper have recently concluded, the federal government is currently in the process of reviewing the feedback received and industry considerations to inform the Strategy.

That said, it is immediately clear that Canada will remain pursuant of the strategy initiatives and focuses outlined in the Discussion Paper. Especially as significant financial supports per focus have already been designated and future additional ones are likely to emerge too, such as in Budget 2023.

As Canada’s Critical Minerals Strategy is set for release at the end of 2022 and the industry begins to take form, now is the time for interested stakeholders to evaluate how the Strategy will impact them and be prepared to engage with government.

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