Fed Budget2022 Cda’s Crit Min & Clean Industrial Strategies Canada’s Critical Minerals and Clean Industrial
Strategies Critical minerals are central to major global industries like clean technology, health care, aerospace, and computing. They are used in phones, computers, and in our cars. They are already essential to the global economy and will continue to be in even greater demand in the years to come.
Canada has an abundance of a number of valuable critical minerals, but we
need to make significant investments to make the most of these resources.
In Budget 2022, the federal government intends to make significant investments that would focus on priority critical mineral deposits, while working closely with affected Indigenous groups and through established regulatory processes. These investments will contribute to the development of a domestic zero-emissions vehicle value chain, including batteries, permanent magnets, and other electric vehicle components. They will also secure Canada’s place in important supply chains with our allies and implement a just and sustainable Critical Minerals Strategy.
In total, Budget 2022 proposes to provide up to $3.8 billion in support over eight years, on a cash basis, starting in 2022-23, to implement Canada’s first Critical Minerals Strategy. This will create thousands of good jobs, grow our economy, and make Canada a vital part of the growing global critical minerals industry.
Supporting Critical Minerals Projects in Canada
Critical mineral mining projects are expensive and come with a unique set of challenges that can often include remote locations, changing prices, and
lengthy regulatory processes. Making these projects a less risky undertaking for companies will help grow both Canada’s critical mineral industry and secure the good resource jobs of the future. Specific measures proposed in Budget 2022 to support critical mineral projects include:
Up to $1.5 billion over seven years, starting in 2023-24, for infrastructure investments that would support the development of the critical minerals supply chains, with a focus on priority deposits;
$79.2 million over five years on a cash basis, starting in 2022-23, for Natural Resources Canada to provide public access to integrated data sets to inform critical mineral exploration and development; and
The introduction of a new 30 per cent Critical Mineral Exploration Tax Credit for specified mineral exploration expenses incurred in Canada and renounced to flow-through share investors.
The tax credit would apply to certain exploration expenditures targeted at nickel, lithium, cobalt, graphite, copper, rare earths elements, vanadium, tellurium, gallium, scandium, titanium, magnesium, zinc, platinum group metals, or uranium, and renounced as part of a flow-through share agreement entered into after Budget Day and on or before March 31, 2027.
These measures will build upon Canada’s strong capital markets position for mining companies.
The Toronto Stock Exchange (TSX) and TSX Venture Exchange (TSXV) are the world's primary listing venues for mining and mineral exploration companies, with more than 1,170 issuers in 2021. Between 2017 and 2021, almost
$45 billion of the world's total equity capital for these mineral exploration and
mining companies was raised by companies listed on the TSX or TSXV.
Attracting Global Critical Minerals Supply Chains
Budget 2022 proposes significant funding to make Canada a more attractive destination for critical minerals investment and to secure valuable agreements that would increase production of goods like electric vehicles and batteries.
Budget 2022 proposes to provide up to $1 billion over six years on a cash basis, starting in 2024-25, to Innovation, Science and Economic Development Canada for the Strategic Innovation Fund. Combined with
$500 million drawn from existing program funding, this will provide
$1.5 billion in targeted support towards critical minerals projects, with prioritization given to manufacturing, processing, and recycling applications. Support for innovative projects through the Strategic Innovation Fund will complement other proposed investments in the sector, including a proposed $1.5 billion investment in infrastructure.
The government will also explore potential opportunities to support the growth of the solar panel industry through this envelope.
Promoting Sustainable Mining Extraction and Processing
With significant advantages like strong environmental protections, a
well-educated workforce, experience in greening mining operations, and commitments to reconciliation and Indigenous participation, Canada has everything that leading companies look for when deciding where to invest in mining projects. These advantages will be vitally important as Canada seeks to develop the critical minerals supply chains.
Budget 2022 proposes new funding to build on those assets and continue to make Canada an attractive country for critical mining investment.
Budget 2022 proposes to provide up to $144.4 million over five years, starting in 2022-23, to Natural Resources Canada and the National Research Council to support research, development, and the deployment of technologies and materials to support critical mineral value chains.
- Additionally, as indicated in Chapter 7, Budget 2022 proposes to provide $103.4 million over five years, starting in 2022-23, to Natural Resources Canada for the development of a National Benefits-Sharing Framework for natural resources and the expansion of the Indigenous Partnership Office and the Indigenous Natural Resource Partnerships program. At least $25 million of this amount will be dedicated to early engagement and Indigenous communities' capacity building to support their participation in the critical minerals strategy. These investments will increase Indigenous capacity to benefit from all types of natural resources projects, including critical minerals, and are a key component of the Partnering with Indigenous Peoples in Natural Resource Projects proposal in Chapter 7.
Making the Critical Minerals Regulatory Processes Simpler
Companies seeking to invest look for a balanced and predictable regulatory environment and a collaborative approach between different orders of government. To help job-creating critical minerals projects move forward
in Canada, Budget 2022 makes important investments in improving our regulatory processes.
Budget 2022 proposes to provide $10.6 million over three years, starting in 2024-25, to Natural Resources Canada to renew the Centre of Excellence on Critical Minerals, which works with provincial, territorial, and other partners, and that will provide direct assistance to help developers of critical minerals navigate regulatory processes and existing support measures.
Budget 2022 also proposes to provide up to $40 million over eight years, starting in 2022-23, to Crown-Indigenous Relations and Northern Affairs Canada to support northern regulatory processes.
To ensure an efficient and effective impact assessment regime, the federal government will consider the funding requirements for the Impact Assessment Agency of Canada and other relevant departments in the context of the fall 2022 economic and fiscal update. This will help support the assessment of major projects, such as critical mineral mines.
Working With Friends and Allies to Strengthen Global Supply Chains
Canada has the critical minerals the world needs and is uniquely positioned to be a trusted partner in the global critical minerals supply chain.
Budget 2022 proposes to provide $70 million over eight years, starting in 2022-23, to Natural Resources Canada to advance Canada’s global leadership on critical minerals, in particular to meet its responsibilities under the
Extractive Sector Transparency Measures Act.
- $3.8 billion over eight years to launch Canada’s first Critical Minerals Strategy,
which will create jobs in rural communities across Canada;