Government of Canada’s Critical Mineral Strategy

The government has been making big moves in the critical mineral sector to woo new investments in battery electric vehicle manufacturing and supply chains.

This month, Canada’s Minister of Natural Resources Jonathan Wilkinson unveiled the country’s long-awaited Critical Minerals Strategy. This was followed by an announcement of a “Sustainable Critical Minerals Alliance” between Canada, Australia, France, Germany, Japan, the United Kingdom, and the United States. To further highlight the significance of the strategic importance being places on critical minerals, the government is proposing new foreign investment rules, with a heavy emphasis on this sector.

Key highlights from the strategy include:

  • High Priority Critical Minerals: Ottawa’s strategy prioritizes developing lithium, graphite, nickel, cobalt, copper and other rare earth elements. These were selected as they have the greatest potential to spur Canadian economic growth and their necessity as inputs for priority supply chains.
  • Funding: the strategy is currently backed by up to $3.8 billion in federal funding allocated in Budget 2022. The Strategic Innovation Fund (SIF) will continue to be one of the most significant direct funding mechanisms provided to spur new investments in the critical minerals sector. However, the Canadian government continues to feel pressure to respond to the American’s Inflation Reduction Act and are signalling to watch out for more in Budget 2023.
  • Regulatory Certainty: A central feature of the strategy is the need to streamline the project approval process for new mines. The strategy also re-commits to a principle of “one project, one assessment” in its review of projects by working with other jurisdictions to reduce duplication and increase efficiency and certainty in the regulatory process.
  • Infrastructure Development: The strategy acknowledges that strategic infrastructure investments in green energy and transportation are required to unlock critical mineral regions. It points to the $1.5B commitment in Budget 2022 as the key mechanism to spur investments that would complement existing clean energy and transportation programming and considers alignment with other strategic federal investment mechanisms. such as the Canada Infrastructure Bank and the National Transportation Corridors Fund.  
  • Indigenous Participation Efforts to advance critical mineral development will be based on respect for Aboriginal and treaty rights, as well as meaningful engagement, partnership, and collaboration with First Nations, Inuit, and Métis peoples and governments. The strategy reinforces that the development of critical mineral value chains presents a significant opportunity to grow the Indigenous economy through jobs, businesses, services, and ownership opportunities.
  • Workforce Recruitment and Capacity Building: To improve workforce recruitment challenges the strategy commits to further federal skills and training initiatives to help the minerals and metals sector grow its workforce and meet the increased demand for critical minerals. This includes efforts to attract, train, and retain employees, including women, youth, Indigenous peoples, and other equity-seeking groups. With respect to community capacity building, the strategy also commits to grow opportunities for Indigenous and rural SMEs through the local supply of goods and services for critical minerals development projects. 
  • Geopolitics and National Security: The strategy does not shy away from geo-political and national security questions. In fact, Minister Wilkinson went as far as to refer to the strategy as a “geo-political document” designed to reinforce Canada’s strategic interests in a sensitive industry. It will align with the Government of Canada’s strategic global objectives, including Canada’s Indo-Pacific Strategy, and commits to leveraging Canada’s international partnerships to improve Responsible Business Conduct, ESG standards and best practices in critical-mineral-related activities.  

Given the government’s ambitious strategy, the question now turns to implementation. To realize the strategy’s potential, government will need to work hand in hand with the private sector and address the key questions such as how it can continue to strategically invest in critical minerals and streamline the project approval process to bring new capacity on-line, while respecting the rights of Indigenous peoples. 

PAA will be watching the process closely and is here to answer your questions about how the strategy will be implemented.