Securing critical minerals essential to Canada's future
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Featuring views and opinions written by market professionals, not staff journalists.
The Canadian Government recently announced a wide range of stimulus initiatives in the 2022 Federal Budget as part of an effort to help Canada secure its future with respect to access to critical minerals. While a positive step, it is unclear whether incentives alone really go far enough towards achieving the stated objectives.
Production of critical minerals is paramount to Canada’s ability to transition to the green economy. Renewable technologies like solar and wind power require more metals and minerals to produce than carbon-emitting fossil fuel-based electricity.
As a result, millions of tonnes of critical minerals such as copper, nickel, lithium, graphite and cobalt will be required to meet not only demands for new technologies globally, but also our inherent ability to reduce our carbon emissions and meet our climate related goals.
Without secure access to these materials, we simply won’t be able to reduce our dependence on fossil fuels and transition to a new, clean green economy. Once again, the initiatives announced are a great start. Doubling the flow through tax credit to cover exploration expenditures on critical minerals to 30%, investing $70 million for new global partnerships to promote Canadian mining and dedicating $1.5 billion for new infrastructure in undeveloped areas like Ontario’s Ring of Fire are all a step in the right direction.
But while Canada is often considered one of the safest, most stable countries for the metals and mining industry, it is also known for moving slowly with respect to new projects.
Take Ontario's Ring of Fire for example. Considered one of the province's largest emerging critical mineral resource districts with more than 3 dozen junior and intermediate companies operating in the 5,000 square kilometer jurisdiction for close to two decades, development has been beset by delay after delay.
If we consider the rate of climate change to be the greatest existential threat to humanity, countries including Canada will need to prioritize and mobilize our efforts collectively as we have in the past during times of crisis. Canadians were able to mobilize vast amounts of resources and manpower to fight fascism in World War II. After the war the Canadian government took decisive action to create both jobs and new supply chain infrastructure, building a transcontinental highway at breakneck speed compared to today’s standards.
With the combined threats of climate change and global political instability, attention to securing Canada’s access to critical minerals should be just as decisive and responsive to the challenging times that lay ahead.
The mineral exploration and development incentives are great, but without an effort to improve our ability to develop these resources there is an element of having one foot on the gas and one the break at the same time..
What’s really needed moving forward are ways to cut through the bureaucracy that has stymied the advancement of resource projects while at the same time, maintaining the high environmental standards Canadian industry is known for while working closely with Indigenous groups along the way.