Ontario PCs pledge $500 million for processing critical minerals but spending questions loom

Ontario's Progressive Conservatives have pledged to set up a $500-million critical mineral processing fund to invest in "strategically located" facilities to develop the province’s vast resources of lithium, graphite, zinc, cobalt and other key minerals and metals.

The fund, a central economic plank in the party’s re-election platform released on Monday, is the biggest government committment so far to build a network of refining facilities mining experts say are needed to ensure Canada reaps the benefits of producing minerals and metals important for the global energy transition. 

The fund would target regions home to numerous deposits of the 34 metals and minerals identified in the federal government's critical minerals strategy as key to the defense, energy and automotive sectors, including the Ring of Fire area in northern Ontario.

The fund “would accelerate development of processing projects, attract private capital investment and speed up the development of key strategic projects across the critical mineral supply chain," the party said in its 36-page platform.

The PCs promise to adopt a  "one-project, one-process" approach to minerals development that would “streamline permitting, provide greater certainty and speed up approvals with service standards and timeline guarantees for provincial regulatory approvals." 

A "signficant sum" but...

But Ian London, head of the Canadian Critical Minerals and Materials Alliance, an industry advocacy group, highlighted that while the fund represented a "significant sum,” it should be read as a “broad announcement ahead of the provincial election.” 

“Where is this money going to be spent? Ring of Fire to open up roads and infrastructure for mining to produce battery-grid nickel for EVs? The Kingston area for graphite development [for batteries]? Rare earth elements for AI data centres? What is the industrial strategy?” he asked, speaking with Canada’s National Observer.

London worries the fund proposed by the PCs will not be spent on “progressive steps” in the reindustrialization of Ontario’s mining sector, but instead on retrenching the province in “old traditional ways” of developing mines.

“I am not discounting the importance of the fund. But I am concerned this money won't be deployed quickly enough to get traction on international critical minerals markets and the value-added manufacturing that would allow us to reduce offshoring of processing as we continue to do.”

Critical minerals have been in the global spotlight since U.S. President Donald Trump made clear his desire to control minerals and metal mining in Greenland and impose an arms-for-minerals deal with Ukraine. He has also threatened to make Canada the 51st state by "economic force" in a bid to exploit his northern trading partner's critical mineral wealth. 

Canadian Energy Minister Jonathan Wilkinson has proposed “joint investments” with the U.S. to strengthen Canada as an alternative supplier to geopolitical rivals China and Russia. But that has raised concerns Canada could lose sovereign control over its lithium, zinc, copper and other critical minerals. 

Some Canadian mining experts have argued that Ottawa should develop strategic reserves of critical minerals to reduce the investment risk for developing new mines and use it as leverage against Trump's threats to impose 25 per cent tariffs on Canadian goods as early as next month.

But some sector executives have warned that the concept of emergency stockpiles is a non-starter without a cross-country network of facilities to process minerals for Canada's energy transition and for new export markets in Asia and Europe.

Along with the new critical minerals processing fund, the Ontario PCs also pledged $3 billion for a First Nations-focused financing program that would triple funding for equity stakes in electricity, critical minerals, resource development and related infrastructure projects. 

Premier Doug Ford’s party also promised $70 million to cover consultations with First Nations communities on mining projects and skills training to bring more Indigenous workers into the sector.

Nevertheless, PC promises to streamline and accelerate projects in Ontario will depend on whether the federal government does the same for impact assessments “which only duplicate provincial processes while slowing down important projects."

"Ontario’s abundant supply of critical minerals is one of our province’s greatest advantages, but our ability to access these minerals and unlock their potential continues to be undermined by duplicative federal processes and expensive federal red tape," the PC campaign platform said.

Only a handful of critical minerals projects have gained traction in the past year in Canada, but projects in B.C., Manitoba, Ontario and Quebec have recently received a financial boost from the $1.5-billion Canadian Critical Minerals Infrastructure Fund. 

A typical Canadian mine can take 27 years to go from discovery to production, according to a study by S&P Global, due in part to slow permitting and regulatory processes. 

Ottawa has not set firm targets for new mines under its critical minerals strategy, which, apart from the infrastructure funds channeled over the past seven years, is investing $192 million in research to support the “sustainable development of responsibly sourced critical minerals.”