Question Period Note: Canadian Critical Minerals Development

How will developing Canada’s critical minerals benefit Canadians?

• Critical minerals are the building blocks for the transition to the low carbon economy, including cleantech applications, information and communications technology, and advanced manufacturing.
• The growing demand for critical minerals presents a generational opportunity for industrial diversification, high-quality employment and sustainable development across Canada, especially in rural, remote and Indigenous communities.
• The Canadian Critical Minerals Strategy is being implemented through collaboration between federal departments, provincial and territorial partners, and industry stakeholders.
• Budget 2023 builds on the supply chain approach, adding value to Canada’s resources domestically from mineral processing through to manufacturing and recycling.

As a trusted supplier of responsibly sourced minerals, Canada is working to leverage its resource endowment, and environmental, social, and governance (ESG) credentials to meet the rising global demand for critical minerals and their downstream value-added products. The growing demand for critical minerals presents a generational opportunity for industrial diversification, high-quality employment and sustainable socioeconomic development in every province and territory, predominantly in rural, remote and Indigenous communities. Through the creation of sustainable jobs, critical mineral value chains can support Canada’s transition toward a net-zero emissions economy.

Previously announced funding of $3.8 billion over eight years will be used to implement the Canadian Critical Minerals Strategy, growing the production of the critical minerals necessary to power the green and digital economy at home and around the world. This Strategy is now being delivered through new investments in Canada’s industrial capacity, policy levers, research and development initiatives, and other mechanisms to support industries along critical value chains.

The Strategic Innovation Fund (SIF) is an important tool for supporting industrial transformation, with advanced-stage projects across the transportation and energy sectors. These investments will advance the development of value chains, enabling the transition towards a green and digitalized economy. Included in the $3.8 billion strategy is $1.5 billion earmarked for critical minerals investments through the SIF. This is the primary support mechanism for industry to de-risk large projects that contribute to Canada’s critical minerals objectives. To date, two critical minerals projects have been announced through the SIF:
• E3 Lithium in Alberta: $27 million to produce lithium from brines.
• Rio Tinto Fer et Titane in Quebec: $222 million for a multi-faceted critical minerals and blue smelting project.

Budget 2023 includes a targeted value chain approach from mines to manufacturing by supporting manufacturers of clean and green technologies through a new refundable tax credit. This credit would support 30% of the cost of investments into new machinery and equipment used to manufacture or process key clean technologies, and extract, process, or recycle key critical minerals.

In addition, the Canada Growth Fund will be capitalized with $15 billion, and will have the flexibility to invest across the capital structure via equity, debt, and derivative contracts to draw in private investment to companies. The Fund will work one-on-one with strategic partners, such as industrial emitters, clean technology companies, and companies across low-carbon supply chains, including producers of critical minerals, to invest in their projects and/or growth. This will include investment in the domestic production of clean energy, critical minerals and components, as well as exports of these industrial goods.

The development and processing of Canada’s critical minerals will also require new transportation infrastructure and sources of clean energy. The government recently launched the Critical Minerals Infrastructure Fund, which will allocate $1.5 billion towards energy and transportation projects needed to unlock priority mineral deposits. In addition, Budget 2023 positioned the Canada Infrastructure Bank (CIB) to play a leading role in electrifying Canada's economy. CIB will invest at least $20 billion in the building of major clean electricity and clean growth infrastructure projects. These investments will be sourced from existing resources.

• Canada is well placed to take advantage of this generational opportunity with our abundant natural resources and clean energy supply. Twenty one of the 31 critical minerals on Canada’s list are already produced domestically, including graphite, copper, lithium and nickel.
• Budget 2023 supports the Canadian Critical Minerals Strategy with a new refundable tax credit. This credit is worth 30 per cent of the cost of investments in machinery and equipment used to manufacture or process key clean technologies, and also to extract, process, or recycle critical minerals.
• The Strategic Innovation Fund will continue to be the federal government’s principal investment mechanism for de-risking large projects that will contribute to Canada’s critical minerals goals.
• Additionally, projects can be supported through the Canada Growth Fund, a $15 billion arm’s length public investment vehicle that will encourage private investment in low carbon projects, technologies, businesses, and supply chains.