Canada risks squandering multi-billion-dollar critical minerals market without 'swift action': report

Canada risks squandering a $12-billion-a-year domestic market for minerals and metals key to the country’s energy transition by 2040 if the federal government cannot attract the massive investments needed to propel development of copper, nickel, lithium, graphite, cobalt and rare earth element mines, a new report has concluded.

The study out today by the Canadian Climate Institute (CCI), a think tank, found Canada’s place in the global critical minerals market would be jeopardized unless at least $30 billion in capital flowed into the country’s mining sector over the next 15 years to meet growing minerals demand driven by technologies ranging from EV batteries to wind turbines and power infrastructure. 

“Securing Canada’s place in the global critical minerals race requires swift action to unlock public and private investment that can power Canada’s energy transition with these building blocks of clean technologies,” said the CCI’s director of clean growth, Marisa Beck, who was lead author of the report. 

"We are at a phase globally in critical minerals market development where the market is reorganizing itself [against the backdrop of the energy transition] and in the midst of major geopolitical and trade upheavals, so it is the perfect time to establish policies to support Canada’s mining sector and supply chain,” she added, speaking with Canada’s National Observer. 

To meet skyrocketing worldwide demand for these six key critical minerals – which the International Energy Agency, an industry watchdog, forecasts to reach $770 billion by 2040 – investment in Canadian mines would have to rise to $65 billion by the end of the next decade. 

Facilitating this investment, according to the report, which comes ahead of next week’s G7 leaders summit in Alberta where critical minerals is one of three topics topping the agenda, will require: agreements between government and the private sector sharing the financial burden of capital investments in critical mineral mines; more funding for Indigenous communities to partner on these projects; strengthened environmental regulations that reduce risks and liabilities for neighbouring communities; and streamlined mining project reviews and decision-making processes.

“We are seeing very fast progress in a lot of the technologies that will need these critical minerals, so it is important to focus on the high-level areas of mine development, but we also recognize that the processing side and the high-value manufacturing side must all be considered going forward,” said Beck. “But this was outside the scope of this report.”

Marilyn Spink, director of operations at the Canadian Critical Minerals and Metals Alliance, an industry advocacy group, warned that the report could entrench “old-world thinking” by government and industry on new mining sector development that focuses on resource development but “doesn’t sufficiently consider demand-pull,” where future market strategy is more demand-determined rather than supply-led.

'What is Canada going after?'

“What is Canada going after? Materials enable the economy; critical minerals do not. We need to intelligently decide who the customers for these critical minerals will be — EV battery-makers, sure, but think about the wider clean-tech space, energy infrastructure, robotics and so on,” she said, speaking with Canada’s National Observer.

“Then decide which critical minerals you mine and where you mine them, because then you can build the midstream facilities to process them and then add real high-value manufacturing that will lead to economic development and job creation.”

She cautioned that without following this strategy, Canada could fall prey to the “resource curse,” when a country “fails to leverage a natural resource well because it doesn’t add manufacturing value and this results in slowly eroding the wider economy.”

In a bid to ramp up mining of critical minerals in a global market dominated in recent decades by China, Ottawa in 2022 announced $3.8 billion in federal funding to finance geoscience and exploration, mineral processing, manufacturing and recycling applications, as well as research and development. 

And last year, Canada’s critical minerals list was updated with three new materials, bringing the total to 34.

But only a handful of critical minerals mining projects have gained traction in the past year, with developments in BC, Manitoba, Ontario and Quebec recently receiving a financial boost from the $1.5 billion Canadian Critical Minerals Infrastructure Fund. 

Ontario recently unveiled its Protect Ontario by Unleashing Our Economy Act, 2025, which is designed to "cut the red tape and duplicative processes" deemed to have slowed development of major infrastructure, mining and resource development projects, including in the Ring of Fire. BC, meanwhile, earlier this year announced a list of 17 mining and energy projects that would be fast-tracked into development.