Canada's Government to spend big on critical materials, setting aside US$3Bn in investment
Canada's Government to spend big on critical materials, setting aside US$3Bn in investment
Canada’s federal budget promised grants for mineral surveying, processing, and recycling, as well as tax credits for digging new mines and subsidies for infrastructure, though it did not reduce regulatory oversight.
Blue View
Canada has set aside over US$3Bn for investment over the next eight years into the critical materials sector, in a move hailed by domestic producers and projects. Combined with money drawn from existing program funding, the budget makes available nearly US$1.2Bn in targeted support towards critical minerals projects, with prioritization given to manufacturing, processing, and recycling applications. The total also includes US$1.2Bn for infrastructure investments, starting in 2023-24 and running until 2030, which it is hoped with help attract further private sector investment into the sector.
Other provisions include a US$114M for Natural Resources Canada (NRCan) and the National Research Council to support research, development, and the deployment of technologies and materials to support critical mineral value chains. The budget also provides US$82M for NRCan to develop a National Benefits-Sharing Framework, which would include an expansion of the Indigenous Partnership Office and the Indigenous Natural Resource Partnerships program.
The budget foresees doubling of the exploration tax credit to 30% for a range of EV metals, including cobalt, copper, gallium, graphite, lithium, magnesium, nickel, PGMS, REEs, scandium, tellurium, titanium, uranium, vanadium, and zinc. This would allow miners to claim up to 30% of specified exploration expenses related to critical minerals as a tax credit until 2027; or to be claimed as a flow-through share agreement, in which such tax credits are passed on to investors.
The move represents the biggest global commitment to critical materials by any government. Canada has stated its intention to leverage its resources, mining, and innovation ecosystems to position itself as the supplier of choice for global markets. This budget shows that it means business.