Critical minerals represent a strategic opportunity that holds great importance for Canada. The Canadian government has identified a list of 31 minerals considered critical for the sustainable economic success of Canada as part of its Canadian Minerals and Metals Plan. These minerals include rare earth elements, nickel, copper, lithium, uranium and many others.1
On September 2, the Canadian Chamber of Commerce released a statement2 highlighting the “importance of strengthening trusted and sustainable critical mineral supply chains and reducing our dependence on China,” and urging the development of a trade and economic strategy for developing Canada’s critical mineral deposits. Such a strategy would address all segments of the supply chain (i.e. exploration, extraction, development and production), including the use of government procurement contracts to create incentives for North American-sourced critical minerals and targeted tax and regulatory support for extraction projects.
The Conservative Party of Canada platform
The Conservative Party of Canada (CPC) platform3 proposes the implementation of a Critical Minerals Strategy “to take advantage of Canada’s abundant resources of the minerals needed to power our clean energy future.” Specifically mentioned are policies to facilitate the responsible exploitation and mining of lithium, support for the export of uranium to responsible countries for use in civilian programs, and new initiatives to recover critical minerals from historical mine wastes.
The Liberal Party of Canada platform
The Liberal Party of Canada (LPC) platform4 also includes specific initiatives with respect to critical minerals, referring to using all tools (including the Investment Canada Act) to “ensure the protection and development of our critical minerals from both an economic and national security perspective.” These measures include building an end-to-end sustainable battery supply chain, attracting major “anchor investments in key areas like mineral processing and cell manufacturing,” and doubling the existing 15 per cent mineral exploration tax credit (METC) for critical minerals, which are essential to clean technology manufacturing such as batteries. The METC is a non-refundable tax credit that enables investors in mining companies that incur eligible exploration expenses to reduce their taxes payable.5 This occurs when investors purchase “flow-through shares”6 in such companies, which renounce the qualifying expenses they incur in favour of the FTS investors. In the case of the METC, eligible exploration expenses are essentially those incurred in conducting aboveground mineral exploration activity to determine the existence, location, extent or quality of a base or precious metal deposit in Canada.
The enhanced interest in critical minerals during Canada’s 2021 federal election is welcome towards ensuring the development of this important segment of Canada’s mining sector for the benefit of all Canadians.
1 Critical Minerals, Government of Canada, 2021
2 Canada’s climate and national security depend on critical minerals, so why is no one talking about it, asks Canadian Chamber of Commerce.
3 CANADA’S RECOVERY PLAN.
4 Critical Minerals and Batteries, Liberal Party of Canada.
5 Mineral Exploration Tax Credit, Government of Canada, 2021.
6 Flow-Through Shares, Mining Tax Canada.