Canada faces a pivotal moment in its quest to harness its critical mineral resources to meet both domestic and global demands. Recent research from the Canadian Climate Institute highlights a pressing need for the government to implement policies that can accelerate investment and development in this sector, while balancing the urgent necessities of environmental protection and Indigenous rights.
The report underscores six essential critical minerals—copper, nickel, lithium, graphite, cobalt, and rare earth elements—that are foundational to emerging clean technologies, from renewable energy to electric vehicles. According to the institute, Canada has underutilised its reserves of these minerals, despite an escalating demand projected to grow significantly by 2040. Without substantial efforts to enhance mining activities, the nation risks forfeiting an estimated $12 billion annually in potential critical minerals production.
Rick Smith, president of the Canadian Climate Institute, articulated the urgency of the situation: “Critical minerals represent a multi-billion dollar opportunity for Canada in a global energy transition that is picking up pace. However, the critical minerals sector is struggling to attract enough investment to keep up.” He emphasised the necessity for the government to adopt strategies that can mitigate market risks and position Canada as an attractive destination for private investment.
The report suggests that Canada must secure approximately $30 billion in new investment over the next 15 years to fully exploit its domestic potential, and an impressive $65 billion to respond to the anticipated increase in global demand. Yet, the volatility of market prices continues to hinder investor confidence, creating an environment that requires robust policy interventions such as equity investments and contracts for difference.
Moreover, the importance of respecting Indigenous rights in resource development cannot be overstated. JP Gladu, founder of Mokwateh, stressed the vital need for collaboration: “All clean growth projects will rise on treaty lands or near Indigenous communities. This moment provides Canada with an opportunity to affirm Indigenous rights to land and self-determination while fostering meaningful partnerships.” Acknowledgement of Indigenous communities and their pivotal role in resource extraction is not just ethical; it is also essential for sustainable development.
To that end, the report calls for streamlined project review processes that do not compromise Indigenous rights or environmental standards. Recommendations include sharing financial risks with private companies, increasing funding for Indigenous participation in the mining sector, and instituting stronger regulations aimed at reducing environmental risks and improving decision-making efficiencies.
John Stackhouse, senior vice president at the Royal Bank of Canada, articulated a similar sentiment, noting that Canada is poised to develop its critical mineral reserves. He stated, “This report clearly demonstrates the importance of making it easier for mining projects to secure financing.” He advocates for policy measures like loan guarantees to attract private capital, enabling projects to progress despite inherent market uncertainties.
Recent government efforts complement the findings of the Climate Institute’s report. Notably, the Canadian government introduced the Clean Technology Manufacturing Investment Tax Credit (CTM), offering a substantial tax incentive of 30% for eligible investments in the extraction and processing of critical minerals. The tax credit is set to remain at this rate until 2031, after which it will gradually decrease.
Additionally, a commitment of up to $50 million to support the development of Canada’s critical mineral value chains was announced in 2025. This funding aims to foster job creation and economic opportunities while also enhancing energy security and reducing dependence on foreign, particularly authoritarian, sources.
However, recent data reveals persistent challenges within the sector. A survey conducted by the Canadian Climate Institute, in collaboration with TMX Group, identified prolonged permitting processes and regulatory delays as major obstacles to investment. The lack of infrastructure and ambiguities surrounding Indigenous rights further complicate the investment landscape. Indeed, high capital costs coupled with extended payback periods pose significant barriers for potential developers.
In response to these concerns, Canada has also revised the Investment Canada Act, implementing stricter security reviews for foreign investments in sensitive sectors. This change aims to safeguard national interests amid an increase in Chinese investments within the critical minerals space. Despite Ottawa’s scrutiny, including forcing divestitures from Chinese investors, there remains a concerning trend of substantial investment from China—illustrated by a remarkable rise from C$62 million in 2022 to C$2.2 billion in 2023.
Overall, the intersection between the urgency of developing Canada’s critical minerals and the necessity for sustainable, responsible practices is clear. As the global shift towards clean technologies accelerates, Canada finds itself at a crucial crossroads—one that presents both an extraordinary opportunity and a significant responsibility. To fully realise its potential, Canada must act decisively and collaboratively, prioritising investment in critical minerals while embracing Indigenous rights and environmental stewardship.
Source: Noah Wire Services
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