Canada hopes a new fund will bring more private investment to critical minerals, including projects hoping to advance in the Northwest Territories.
The Canada Growth Fund – proposed in this month’s budget – aims to raise three dollars in private investment for every public dollar spent. The fund would be armed with $15 billion over the next five years.
Speaking in Yellowknife on Wednesday, federal transport minister Omar Alghabra said the fund could help spur the developments needed to mine 31 minerals considered critical by Ottawa to Canada’s economic success and national security. That list includes zinc, cobalt, bismuth, copper and rare earth elements, all of which feature in active or proposed NWT mining projects.
Alongside the growth fund, Canada this month proposed $3.8 billion in funding to enhance exploration for critical minerals in Canada, in part by simplifying regulations and improving infrastructure. Northern mining advocates have welcomed that proposed investment, part of a larger shift toward domestic mining for critical minerals as economic tensions grow between North America and China, which ordinarily allies itself with Russia.
A 2018 US geological survey found that China produces 95 percent of the world’s rare earth minerals, an important resource for the tech sector. Alghabra said Canada will need a consistent supply of rare earths to deliver on its own clean-technology initiatives such as the introduction of more emissions-free vehicles.
“We are investing in our mining industry’s ability to provide the minerals and metal required to reach net-zero emissions by 2050,” he said.
The $15-billion growth fund has three stated aims: contribute to achieving Canada’s climate goals, grow low-carbon industries, and – with critical minerals in mind – “support the restructuring of critical supply chains in areas important to Canada’s future prosperity.” Alghabra believes if the budget passes as envisaged, the fund will “attract substantial private-sector investment to help reduce pollution, diversify our economy, and bolster our exports.”
However, public-private partnerships such as those contemplated by the fund do not always run smoothly. Recently, Canada’s parliamentary budget officer found the Canada Infrastructure Bank, a similar initiative, to be riddled with “pervasive” delays. Asked if a plan existed to head off such delays this time around, Alghabra said there was “a lot of international capital and domestic capital that is looking for projects to invest in.”
“This idea of creating a public partner,” the minister said, “will create an incentive for that private investment to identify Canada, and regions of Canada, that have great potential to invest faster.”
In a news release, the federal government stated its plan to support the critical minerals sector would proceed while “working closely with affected Indigenous groups.” Exactly what that would mean in practice was not immediately clear.
Caroline Wawzonek, the NWT’s industry minister, said the territorial and federal governments were “doing something different by sitting down with Indigenous leaders and ensuring that this plan is collaborative.” Wawzonek expressed encouragement at what she anticipates will be increased investment in the North through the proposed new federal funding.
“These efforts are designed to ensure that the air we breathe is clean, that we make efficient use of our abundant resources, and that our economy remains strong,” said Alghabra.