Canada’s New Critical Minerals Strategy

In an article for JD Supra, Bennett Jones opined that the Canadian government was looking at reviewing different regulatory processes in an attempt to cut back on the red tape faced by Canadian-regulated mining companies in bringing mines from exploration to production. The statement was based Canadian Critical Minerals Strategy released by the federal government on on December 9, 2022.


The Canadian Critical Minerals Strategy the federal government is a comprehensive, multi-disciplinary government policy package that has been designed to facilitate an increase in the production and processing of critical minerals which are essential to the green and digital economy.

The goal of the 58-page Canadian Critical Minerals Strategy is to support economic growth and job creation, continue on the path towards reconciliation with Indigenous peoples, enhance global security and foster a “nature-forward” approach to sustainability. The document aims to put Canada at the forefront of the increasing global demand for clean energy.

The publication of this document is a clear indication that the Canadian government wishes to revamp and streamline the regulatory processes and supply chain of mining critical minerals in the country. This decision comes in the backdrop of the current global landscape which is trying to transition towards a green future. The production of critical minerals is critical for this transition but their supply has failed to keep pace with the demand.

Revamping Existing Structures

According to the Impact Assessment Agency of Canada (IAIC), the federal entity which takes care of environmental assessments of major infrastructure projects including critical mineral mines, a mine project can typically be expected to take around five years to go from initial application to completion. However, the Canadian Critical Minerals Strategy points out that it can take up to 25 years in some cases for a mining project to become operational under the current regime.

The simple recognition of the fact that bureaucracy can bring applications to a halt and discourage investment is a welcome development for Canadian mining companies and foreign investors. The federal government of Canada is committed to reviewing the IAIC and allied processes in order to increase the efficiency of mining project construction applications.

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The Government of Canada has committed to meeting the “one project, one assessment” approach for major development projects that necessitate both federal and provincial impact or environmental assessments. This approach was frequently supported by industry participants in recent years. The Canadian Critical Minerals Strategy also reconfirms the mandate of the Critical Minerals Centre of Excellence, established in 2021, to help project developers navigate regulatory processes and access federal support measures.

It is important to note that the strategy does not point out any changes to actual policy or any overhaul of the current regime and regulatory framework. However, it does aim to create regulatory certainty with the goal of harmonizing the regulatory and permitting regime for mine project applications. The strategy also outlines government priorities ranging from exploration to reclamation along the critical mineral value chain thereby seeking regulatory harmonization domestically and with the United States.


Credits over Carbon

The Canadian Critical Minerals Strategy acknowledges the advantages that a swift and efficient regime can potentially create for Canada’s future in the mining sector. The goal is to strategically position Canada as a key player amongst the global leaders of suppliers of clean energy and critical minerals.

The strategy predicts that 300,000 new jobs will be created by 2030 to meet the rapidly increasing demand for critical minerals because of the North American zero emission vehicle market and the battery production supply chain. To capitalize on the opportunity that this presents to the Canadian energy sector, the Government is willing to commit significant investment towards the exploration, research and development, infrastructure and innovation of critical minerals.

The budgets for 2021 and 2022 include a $1.5 billion initiative for the Strategic Innovation Fund (SIF) which aims to support critical mineral projects. There will also be a new 30% critical mineral exploration tax credit that will become available to investors under certain flow-through share agreements in order to support specified exploration expenditures in Canada.

The Canadian Government is hopeful that SIF investment will help build a world-class critical mineral supply chain. The creation of this chain is imperative to decrease Canada’s dependency on foreign supply chains which can often be unpredictable. Towards this end, the Canadian Critical Minerals Strategy outlined a number of benefits such independence would provide – including an increase in foreign direct investment, domestic sustainability, and the possibility of positioning Canada as a global leader in the clean energy sector.

Looking Ahead

Canada needs to refine its regulatory processes in order to materially shorten the current permitting timelines. This would increase efficiency and predictability within a harmonized framework thereby attracting and supporting mine project developers.

The Canadian Critical Minerals Strategy calls for the implementation of a national benefits sharing framework along with a draft action plan with a legislated deadline for release in 2023. The harmonized permitting framework resulting from these initiatives could boost regulatory certainty apart from creating real and lasting benefits for affected Indigenous groups. This would also materially shorten timelines without sacrificing environmental protection.

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