The appetite for critical minerals, essential in the manufacture of electronics and batteries for electric vehicles, is prompting Ottawa to fund a new strategy. Some voices believe that this strategy comes late.
Posted at 4:18 p.m.
About $1.7 billion is earmarked in Finance Minister Chrystia Freeland’s budget over the next five years to fund a host of projects. The Trudeau government is also introducing a new 30% tax credit for exploration expenses for critical minerals.
Lithium, graphite and cobalt are at the heart of the strategy. We also find copper, titanium, zinc, magnesium and niobium. The minerals on the list are prized in sectors such as telecommunications, aerospace, medical as well as transportation electrification.
“This plan will create thousands of good jobs and help provide Canada and our allies with the essential minerals and metals our economy needs,” said Ms.me Freeland, at a press conference.
Quebec had announced a strategy for the beneficiation of critical minerals in the fall of 2020. The Trudeau government attributes its plan to the complexity of the mining projects and the financial resources to carry them out.
In the automotive industry, manufacturers still have to look to Asia for the materials needed to manufacture batteries. Like Quebec, Ottawa is trying to carve out a place for itself in the North American automotive supply chain.
In total, Ottawa’s plan proposes $3.8 billion over eight years. However, details surrounding the funding of the strategy after 2026-2027 are still unknown.
The Business Council of Canada, which represents the leaders of the largest companies in the country, welcomed the intention of the Trudeau government, but believes that the plan comes late. Its senior vice-president of public policy, Robert Asselin, says there is some catching up to do, as the United States and China already have a good head start.
“It was desirable, you have to be positive,” he says. I think the main challenge is with regulatory approvals. In Canada, we are not fast. We are talking about a strategy that will span a decade. »
The Trudeau government believes that its tax credit and the money provided for in its strategy will act as an accelerator in a market where mining companies are already well established. According to government data, there were some 1,170 companies listed on the Toronto Stock Exchange and the TSX Venture Exchange last year.
Between 2017 and 2021, these companies raised less than $45 billion in capital, according to estimates provided in the budget.