The government of Canada has announced that it will be investing up to C$3.8B into its critical minerals strategy. What is Canada’s critical minerals strategy as has been announced so far?
The Canadian Critical Minerals Strategy will help advance the development of critical mineral resources and value chains in order to enable the green and digital economy at home and around the world. The government of Canada has identified six areas of focus for the strategy:
- Driving research, innovation, and exploration
- Accelerating project development
- Building sustainable infrastructure
- Advancing Indigenous reconciliation
- Growing a diverse workforce and prosperous communities
- Strengthening global leadership and security
The federal government plans to launch the strategy in the coming months. The Critical Minerals Centre of Excellence (CMCE) will continue to lead the coordination and development of whole-of-government policies and programmes under the strategy in collaboration with domestic and international governments, investors, and industry stakeholders.
Why is it so important for Canada to build up its critical minerals supply chains?
The global demand for critical minerals is expected to increase significantly over the coming decades, in large part to power the green energy transition. According to the International Energy Agency’s net-zero pathway, the total market size of the critical minerals needed for the green energy transition could grow almost sevenfold between 2020 and 2030. As a trusted supplier of responsibly sourced minerals and materials, Canada can further leverage its resource wealth, environmental stewardship, industrial know-how, and trade relations to support a greener and more connected global economy.
Building Canadian-based critical mineral value chains can help supply the world with responsibly sourced products, mitigating the risk of global supply chain disruptions. It is also a generational opportunity for industrial diversification, high-quality employment, and sustainable socioeconomic development in almost every province and territory, including rural, remote, and indigenous communities. Critical mineral value chains can be a major driver of Canada’s just transition toward a net-zero emissions economy.
Critical mineral value chains can be a major driver of Canada’s just transition toward a net-zero emissions economy
What are some of the critical areas where NRCAN thinks this money should be allocated/focused?
Funding allocations will be outlined as we develop, release, and implement the strategy.
How is Canada best placed to help grow North America’s electric vehicle (EV) and other renewable energy networks?
Canada has existing production or reserves of all the critical minerals required to produce advanced batteries for electric vehicles, including nickel, graphite, cobalt, and copper. Canada also has an abundance of rare earth elements to make permanent magnets for EV traction motors. Our low-cost green electricity allows for low-carbon processing of these minerals into materials.
Canada is a well-established manufacturer of autos and components sectors which are deeply integrated into the North American automotive supply chain. In addition, Canada’s 15 free-trade agreements with 49 different countries provide preferential market access to 1.5 billion consumers worldwide. These are a few of the key reasons that Canada is well-positioned to become a competitive player in the North American and global electric vehicle supply chain, and facilitate a transition toward a greener transportation sector.
International partnerships on critical minerals, such as the Canada-US Joint Action Plan on Critical Minerals Collaboration, and the Canada-EU Strategic Partnership on Raw Materials will support collaboration along the supply chain, from exploration and mining projects to processing, manufacturing, and recycling operations.
The federal government will continue to work with provincial and territorial partners to ensure investments in critical minerals are mutually supportive and well placed to strengthen Canada’s value proposition as an investment destination across all regions of the country.
Are there other ways, outside of the critical minerals space, where you see Canada and Canadian-listed companies leading the way in the energy transition?
Canada possesses the essential attributes – including a skilled and talented workforce, diverse opportunities for investors and companies, and a credible framework for net-zero resource development by 2050 – that will position us as leaders in a rapidly decarbonizing global economy. The federal government is working to utilize our abundant resources and skilled talent to define and effectively pursue opportunities that will drive job creation and economic growth.
The 2022 Federal Budget contains a number of tools that will enable us to position Canada as a leader in areas of comparative advantage. Aside from the $3.8B investment in critical minerals, the Budget commits to expanding low-carbon energy generation, advancing Canada’s nuclear capabilities, and seizing the opportunity presented by a growing global market for hydrogen.
New incentives for the development of clean technologies and carbon capture, utilization, and storage will help Canadians and Canadian businesses benefit from the global transition to a low-emissions economy. As part of the $9.1B in new investments announced in the Emissions Reduction Plan, the federal government also proposed a Regional Energy and Resource Tables Initiative to leverage the unique natural resource and economic opportunities available across Canada’s provinces and territories.
The Canadian government and industry are already leading the way in energy transformation and innovation. Using these federal tools, the federal government will continue working alongside industry to develop strategies to reduce emissions, incent innovation, and improve economic competitiveness.