I will call this meeting to order.
First of all, thank you all for attending the meeting on a Friday afternoon. It's our 12th meeting of the standing committee.
We're starting a new study today, on critical minerals and associated value chains in Canada, so it's a fresh start.
Before I get into introducing and thanking our witnesses, I want to let you know that there's a vote in the House of Commons this afternoon, which is expected to start at any time between five minutes from now and 20 minutes from now. As soon as the bells ring, we will have to suspend the meeting. However, if all of you are able to be available after that—the vote should probably take 45 minutes to an hour, tops—then we can come back and continue the meeting. We'll get through the vote as quickly as we can; it could be less, but that remains to be seen.
Thank you, all.
All of our witnesses are familiar with our process. I think all of you have been to committee before, so I don't need to spend any time, or certainly any length of time, explaining the process.
You're free to speak in either official language, and in fact you're encouraged to speak in both official languages. You will be asked questions, most certainly in French and English. You have translation services available. We're doing these meetings by Zoom. Sometimes that comes with challenges, such as delays and whatnot, so everybody has learned to be patient and to wait for things to click in and work.
The other thing I want to do is welcome our newest member, Mr. Lloyd. Thank you for joining the committee. I hope you will come to realize that this is a unique committee and that we get along pretty well. We do have bumps in the road from time to time, but aside from those odd occasions, things run pretty smoothly. We don't generally encounter some of the challenges that you see in other committees, and I hope that continues to be the case. I look forward to working with you.
Mr. McLean, if you and your colleagues could extend our thanks to Ms. Harder for her contribution to the committee while she was here, I would be grateful.
Let's jump in.
We have five witnesses here today. We have the Canadian Critical Minerals and Materials Alliance; the Canadian Institute of Mining, Metallurgy and Petroleum; the Department of Natural Resources, of course; the Mining Association of Canada; and, last but certainly not least, PDAC, and everybody here knows them.
Thank you all for joining.
The process is that each group will be given up to five minutes to make introductory remarks. At the conclusion of all the presentations, I'll open the floor to questions.
On that note, why don't I start with you, Mr. London, since you're by yourself?
Good afternoon, and thank you again for the invitation to appear today.
The world is undergoing an economic transformation, with innovative technologies, clean technologies, driving the pace of change. Both the IEA and the World Bank stress the significant role of minerals and metals, especially non-traditional materials like lithium, graphite, rare earths, scandium and others, for a low-carbon future. China controls much of the full-value chains around these critical minerals. Governments and industrials around the world have called for reliable alternatives to secure sources of supply.
Despite Canada's vast resource wealth, our critical materials remain largely undeveloped and not strategically leveraged, primarily because of the lack of understanding of their significant climate, national security and economic benefits.
The Industry Strategy Council, the forum of experienced business leaders assembled by ISED, recently issued a report and has created a blueprint for implementation, a road map for how Canada can enable critical materials value chains to be developed.
Over the past year, C2M2A, the critical materials alliance, has proposed a suite of recommendations around policy, investment, R and D, secondary sources, education and trade.
With the limited time available today, I'll just touch on three important themes and one specific recommendation.
The first is consumer demand. Consumer demand attracts production, which attracts value-added processing, which attracts raw material supply. “Demand pull” strategies provide stronger results than those built upon “supply push” strategies, an approach we have traditionally taken. Increasing demand for electrified transportation, battery supply, advanced materials and associated manufacturing is a key measure the government needs to expedite to fulfill our clean energy aspirations and ensure that Canada is competitive in this increasingly competitive global theatre. With clarity of Canadian-branded supply, auto and parts manufacturers could be encouraged to establish some of their current out-of-country supply sources to set up shop in Canada. This demand would facilitate reliable Canadian-certified or Canadian-branded mineral development and value creation, where Canada sets the benchmark standards.
The second is clarity of supply, which I just mentioned. Canada has made progress in reducing its capital and operating costs of GHG-reducing mineral production. Canadian resource and material producers must continue to strive to meet and exceed ESG standards, essentially certifying our offerings, the demand for which is of significant interest to consumers. Critically important, though, is the necessity to build value chains local to the demand pull, and to feed components to the factories located close to assembly plants.
The third theme is technology advantage to gain leadership. I'm aware of material research in Canada that has direct implications for local supply chains in an electrified auto sector. Materials for vehicle light-weighting of body structures, traction motors and permanent magnets with reliable production closer to home are all being called for. Canada must also be prepared to deliver materials for energy storage technologies, as well as to handle the rapid changes in those technologies. Advanced materials and process development capabilities are within reach at Canada's commercial and national labs.
The question before the house—and I use that term loosely because in your case you actually have a House—is how to spearhead and champion this critical material campaign.
I'd like to suggest that Canada establish a critical materials office, led by an internationally respected business leader and effectively staffed with economic development, technical, investment and policy experts from industry, government and multidisciplinary academia. The office should be mandated to pull together and create, where necessary, enhanced critical material value chains and work with provincial authorities to ensure regulatory alignment. They should also be prepared to see that the most promising material production and manufacturing pilot and demonstration projects move forward and move towards operation.
Leadership from ISED and NRCan, in partnership with industry, is key to our collective success. This is not a government exercise alone, but we can use our unprecedented Canadian ingenuity.
For the sake of time.... We have the raw materials. We should not be selling them and then buying back processed products. Time is sadly of the essence.
Thank you for inviting me. As the president of the Canadian Institute of Mining, Metallurgy and Petroleum, it's my pleasure to act as a witness today for these proceedings.
Just by way of background, the CIM is a global mining powerhouse. We have over 10,000 members. We are laser-focused as an institute, and I'm really proud—and maybe you don't realize—that we have 120 years of history under our belt as an institute. That shows a lot of resilience as an organization, having endured world wars, depressions and now getting through a pandemic.
The secret to our success is really our collaborative nature, and we address the mining industry's needs. We drive innovation, we develop best practices, and we are united globally through peer groups. We have peer groups, similar institutes in Australia, the United States, the U.K., Europe, South America and others. CIM right now is very active in leading the global action on tailings for the mining industry, and we're very proud of the work that we're leading there. CIM has helped, and will continue to help, members and the Canadian mineral industry make positive impacts and obtain a competitive edge through our one CIM community, and a gateway to a world of knowledge.
We operate according to three strategic goals. Our first goal is to create, co-create and share leading-edge knowledge. We also unite and engage an entire mining community, and our third goal is to expand the awareness of the mining industry's essential contribution to society.
We know who our members are at the CIM. We have members from government, non-government, academia, industry, the supplies and service sector, OEMs—that's original equipment manufacturers, original technology manufacturers—from financial institutes, investors and indigenous peoples. Together, the CIM and all our stakeholders are represented. We have extraordinary skills. We have deep knowledge and expertise. We have entrepreneurs, visionary leaders, engineers, geologists, and the full spectrum right across the value chain for critical minerals and other products that are offered by the mining industry.
CIM knows that we can leverage our brain power, our collective effort and our energy to benefit the mining industry, to benefit the Canadian economy with good jobs, and for the sustainability of our planet. The CIM has 10 technical societies with our volunteer members. For example, we have a geological society, a management & economics society, an underground mining society, a surface mining society, an environmental and social responsibility society, and others. Each of our societies is working on their specific technical expertise and focus area to build best practices, guidelines and standards that matter to the mining industry and that are driven by the mining industry.
Most recently, we created 10 global mining guidelines. These include the battery electric vehicle guidelines for underground mining. This was made for the mining industry's objective of green mining for green metals for a green economy. This is toward the mining industry's goal of zero net carbon by 2050, or sooner.
At CIM we are proud of our mineral resource, mineral reserve, guidelines and best practices. This is for technical reporting in compliance with national instrument 43-101 disclosure, and the requirements of qualified persons.
Our MRMR guidelines are world-class. They're referenced in all other mining jurisdictions. The CIM and our members are recognized globally for our vision, our spirit and our deep knowledge and expertise in mining, from exploration through to closure and rehabilitation.
Personally, I joined the CIM when I was an engineering student at the University of Toronto. My dad was a mining engineer, and he encouraged me to join to see who's who, to learn about the industry and its enormous value to Canada, to be part of the CIM family, and to make a difference. Thirty years later, I'm the head of the family. I'm the head of the CIM and I want CIM to make a difference.
This is really perfect timing, through this work with the critical minerals, because CIM is completing a strategic plan right now. Critical minerals are an opportunity to be a cornerstone of our future efforts through the CIM.
When I reflect back on 2017, we had a pan-Canadian mining proposal being put together by representatives all around the table from different stakeholders. It was for cluster funding. It was the first time in my history that I had seen such a willingness and collaborative effort.
Mr. Chair, members of the committee, and fellow witnesses, I am Pierre Gratton, President and CEO of the Mining Association of Canada (MAC). I’m accompanied by Brendan Marshall, Vice President of Economic and Northern Affairs.
Thank you for the opportunity to discuss the important matter of critical minerals with you today.
Increasing geopolitical uncertainty has focused attention on the precariousness of existing supply sources for many primary materials, including critical minerals classified by Canada's allies as the primary materials on which their economies and national security depend.
An increasingly uncomfortable reliance upon China for many of these commodities has led Europe, the U.S., Canada, Australia and other allies to come together to develop strategies and policy instruments to lessen this dependence.
Within Canada, there is a growing desire to source and procure locally, where possible, especially when doing so achieves better environmental and health outcomes. Recent polling data finds that almost 90% of those surveyed liked the idea of Canada being a preferred global source of critical minerals and would like to see government take a number of steps to support this approach.
The environmental, social and corporate governance leadership of mining companies operating in Canada, boosted by MAC's unique and increasingly globally recognized “Towards sustainable mining” initiative, reinforces confidence that when it comes to world-leading sustainable mining practices, Canadian mining is a leader.
The government has recognized that a resilient Canadian mining and metal manufacturing sector is essential to the 2030 climate plan's goal of establishing a domestic battery electric vehicle manufacturing supply chain. If a prosperous transition economy in Canada is contingent on the establishment of a domestic BEV supply chain, then strategic critical mineral investments are essential.
How do we make it happen? We propose two types of investments: first, programs that de-risk investments currently subject to China's market dominance, thus enabling current gaps in critical and BEV supply chains to be filled domestically in Canada; and second, investments that strengthen and enhance Canada's current levels of critical and BEV mineral and metal production.
For decades, China has held monopoly-like control over critical minerals production and distribution, rendering the rest of the world reliant on procurement and creating a level of risk that deters investors from entering these markets.
For example, who would invest in a rare earth mine with no access to a downstream facility to create value-added rare earth products? Who would invest in a value-added manufacturing facility when there is no upstream mine to source from? What advanced manufacturer would set up shop where they didn't have access to the materials they need to produce their end products—BEVs, high tech, medical or otherwise? The answer is no one, at least not without strategic government support that prioritizes economic security and autonomy enough to enable companies that play by the rules to thrive.
To address these challenges, we propose the establishment of a five-year, $250-million program to de-risk projects across the critical minerals supply chain using a two-tier approach: first, advancing pilot and demonstration projects; and second, scaling the successful ones to a level where operational independence is achieved.
Beyond plugging current supply chain gaps, government must also not compromise existing supply, with the impact of carbon pricing on remote mines being the top concern. Off-grid remote mines are virtually exclusively reliant on diesel fuel for power and haul-fleet operations for the time being. With very limited and currently uneconomic options to displace diesel, the competitiveness and longevity of these operations under the proposed clean fuel regulations and the projected $170 per tonne carbon price will erode.
Why does it matter, in the context of critical minerals? In 2018, for which we have data, 52% of nickel and 62% of cobalt shipped in Canada came from off-grid mines. Today, most EV batteries use cathodes with 60% nickel and 20% cobalt. Unless we get climate policy right, a Canadian critical minerals value chain will not materialize. Even if we plug rare earth supply chain gaps, we cannot compromise our ability to produce the materials that make up 80% of the input into batteries.
To this end, we seek your support for an industrial off-grid clean electrification fund.
COVID-19 has put into sharp focus what happens when we let industries slip away, leaving us at the mercy of global supply chains that, in times of crisis, can fail. Let's seize the tremendous opportunities before us to expand and strengthen our economic future.
Thank you very much.
The Chair: Excellent.
Ms. Lisa McDonald: Good afternoon, Chair and committee members. I'm Lisa McDonald, executive director of the Prospectors and Developers Association of Canada. I thank you for the opportunity to speak to the committee today.
As the leading voice of the mineral exploration and development sector in Canada, PDAC represents more than 7,200 members. Our work focuses on fostering a responsible and competitive mineral industry. Mineral exploration and mining form a cornerstone of our economy, employing over 700,000 Canadians and contributing in excess of $100 billion to our GDP in 2020. It is the largest private sector industrial employer of indigenous people on a proportional basis in Canada, and a key partner of indigenous businesses from coast to coast to coast.
Discovery of new deposits is an essential part of the mineral industry value chain. Over the last decade, more than $15 billion has been spent by companies exploring for minerals and metals in Canada. Mineral exploration is a significant economic driver in many northern and remote parts of the country through employment, procurement of services and providing development opportunities for the future. This sector is uniquely positioned to play a key role in reigniting critical parts of Canada's economy as we look beyond the COVID-19 pandemic.
The pandemic has reminded us of the resiliency of our mineral industry, as many companies were able to quickly adapt to find ways to safely operate. It has also reminded us of the value of infrastructure, and how northern and remote regions in Canada suffer from a deficit in transportation and telecommunications links. In fact, Natural Resources Canada estimates that mineral exploration in our three territories dropped by 50% in 2020 versus the year prior, whereas spending in Ontario and Quebec actually increased over the same period.
To ensure that all of Canada can recover from this pandemic, governments must focus on fiscal and regulatory frameworks that support the competitiveness of our mineral industry and development of the infrastructure needed to build back stronger. If something is not grown, it is either recycled or mined. The things that Canadians rely on each day, the inputs of modern society, come directly from the mineral industry. Our industry expertise, vast resources and potential for further discoveries mean that Canada is well positioned to become the global supplier of choice for the clean technology and renewable energy sectors, and lead our transition towards a low-carbon future.
However, mineral exploration is a complex process with low odds of success. Only about one in 10,000 mineral claims reach an advanced exploration stage, and just one in 1,000 advanced-stage projects become mines. Junior exploration companies do the bulk of this high-risk capital-intensive work, and account for upwards of 70% of all mineral discoveries made in Canada. However, new discoveries in Canada are in decline, with grassroots exploration down by roughly 75% over the last decade.
To become the global supplier of choice, Canada must encourage more investment in grassroots exploration and the search for new critical mineral deposits. To do so, we recommend that the government work with industry to improve the effectiveness of the flow-through share incentive and increase the mineral exploration tax credit from 15% to 30% in each province and from 15% to 40% in each territory, as these two mechanisms combine to generate roughly two-thirds of all funds raised for exploration in Canada.
The government also plays a critical role by facilitating public geoscience. Research by Ernst & Young in 2019 showed that every dollar in public geoscience spending by the government in recent programs has generated more than seven times that in overall economic benefit to Canada. PDAC recommends that the federal government take advantage of this value proposition by creating a new funding mechanism to support comprehensive provincial and territorial mineral resource assessments, based on geoscientific evidence, to identify and incorporate critical mineral potential into infrastructure, land management and conservation decision-making.
Thank you for your time today.
I am indeed, Chair. Thank you very much for the opportunity.
Ladies and gentlemen, thank you for the opportunity to discuss our role in the area of critical minerals.
I'm really pleased to join you here today with some of my colleagues from NRCan and, as previous experts have demonstrated, those from across the country.
I will start by saying that this is an extremely timely discussion, certainly one that is on the top of many people's minds and has been amplified by the pandemic. As Canada looks to rebuild the economy for the better, following the pandemic and the challenges it continues to present, this includes building a future and an economy that's greener, more inclusive and much lower-carbon.
It includes also taking action in areas in which Canada can shine and lead the way. I'll briefly cover three things that I think complement where we've been today with some of the other speakers: one, the importance of critical minerals; two, the opportunity for Canada to be a supplier of choice; and three, some of the work that we're doing at NRCan and with our colleagues to make these things a reality.
First off, as I think we would all say, but maybe it's important to underline, critical minerals go into everything from solar panels to wind turbines; from fuel cells to next-generation batteries and storage facilities for energy; from electric vehicles to robotics, electronics, health applications, defence procurement, and new and modern alloys and metals.
In the decades to come, these minerals are forecast to skyrocket, and we expect that demand will increase. For example, the World Bank has predicted a 500% increase by 2050 in the production of such minerals as graphite, lithium and cobalt just to feed the clean energy transition alone. The World Bank also estimates that over three billion tonnes of minerals and metals will be needed to deploy the clean energy needed for the world's transition to a lower-carbon future.
Here presents the opportunity, an opportunity that Canada is uniquely positioned to take advantage of in this global context. We already produce 60 minerals and metals of different varieties and are capable of producing many more. Canada is, by all estimations, a global giant in the mining and metal community. We are the fourth-largest holder of rare earth elements, behind China, Brazil and Vietnam. We are the only nation in the western hemisphere with all the minerals and metals needed to produce advanced batteries for electric vehicles.
Perhaps most important is that Canada is a world leader in the environmental, social and governance credentials in clean mining practices that are expected and that are not only important but a responsibility for Canada to promote and practise around the world.
These are our competitive advantages, and as we look at the opportunity, it is one we want to see and one in which Canada can shine, not only in getting critical minerals out of the ground, but in building the value chains—as it is identified in your study why these are important.
Let's pause for just a moment to talk about value chains. Value chains are—
I'll try to pick up again.
We were talking about building value-added midstream and downstream activities that utilize the minerals. When we talk about value chains, there are a lot of different connotations. Essentially, we're talking about building the value-added, all the way from exploring to discovering, to developing, to smelting and mining and processing, to creating the minerals and metals that are needed as inputs, to products and then to actually utilizing those things.
Earlier we would have spoken about the difference between and the importance of supply and demand and the linkage between the two things to connect the dots. This is an easy example as we think about electric vehicle batteries, where Canada has all the materials and minerals. We have a world-leading mining sector and research community, as we've heard. We have a strong and integrated automotive economy and we have much expertise in these areas, in addition to plenty of renewable and affordable energy. Together, these form a value chain that would enable Canada and its partners to work more collaboratively.
The other part that we would underline about critical minerals is that they are a pan-Canadian opportunity. Critical mineral activities or critical mineral potential is seen across the country. It is not concentrated in one region, but rather regions that are interconnected between the north, south, central Canada, western Canada and of course running north-south with our partners in the United States and east-west to partners in Asia and Europe.
This is why NRCan has been working together with other partners across the federal system to build value chains and to focus our attention on how we can develop and further advance working more collaboratively to achieve outcomes. One such example is the battery initiative, where we've conducted consultations with partners at Innovation, Science and Economic Development on what is necessary and what is needed for Canada to succeed in this space.
It certainly has been demonstrated—and we have heard—that a concerted action in each part of the value chain is necessary. We call this the “mines to mobility” approach.
Moving forward with this in mind, our work on critical minerals takes advantage of a whole-of-government span across many departments and many layers and levels of expertise, both in and outside the federal government. Our work with our provinces and territories as partners, and full partners, is through the “Canadian Minerals and Metals Plan”, which is a pan-Canadian strategy developed with the provinces and territories that lays a vision for a stronger, more competitive Canada in the mining sector.
We are also working together with our provinces and territories as partners in a new task team that we've built around all-Canadian critical minerals and battery value chains. This is an important area in which Canada...and our efforts are working to develop a finalized critical minerals list for Canada. It is a list that identifies which minerals and metals are of strategic importance. Our partners in the United States, the European Union, Japan, South Korea and Australia all have such lists and are using them to orient investment, to identify strategic assets and to prioritize decision-making to support critical mineral projects and industrial chains.
Beyond Canada, our current collaboration with the United States is already a positive success story. We have a critical mineral action plan with the United States that provides us with a solid foundation to continue our work with the new U.S. administration and to advance mutual objectives on clean energy supply chain security and economic recovery. We are equally working bilaterally with the EU and Japan.
There is much more to say, and I'm sure other experts have already added. I'd like to conclude by saying that I'm joined here by my colleagues from NRCan. We are looking forward to responding to your questions and providing more information on our actions as we help achieve a vision for working together to make Canada a success in critical minerals.
Thank you, Mr. Chair.
Thank you very much, Mr. Chair.
Before I begin, I think we have some unfinished committee business that we need to get to. At our last meeting, we had tabled a motion for a study on Keystone XL and we went into debate. We never did vote on our motion.
I would like to retable the motion, as follows:
That, pursuant to Standing Order 108(2), the committee undertake a study of the cancellation of the Keystone XL pipeline including (a) the loss of jobs and investment across Canada in all sectors that supply the energy sector, (b) the impact the cancellation of this project will have on the economic recovery from COVID-19 of Canada's energy sector/natural resource industry; that the committee invite relevant witnesses, including representatives of industries and workers affected, as well as, the Minister of Natural Resources; that the Minister appear for not less than two hours; that these meetings be televised; that six meeting be allocated for this study; and that following this study a report with recommendations be presented to the House of Commons.
I feel it's important that we do this, as we all know it's extremely important for the recovery of our economy and also for several interested parties. In particular, I'm thinking of my riding and the Neekanet First Nation, the chief of which is the president of Natural Law Energy, which had an equity stake invested in the Keystone XL pipeline.
There are several other groups, of course, who are interested—be it workers or companies—and would want to see this study completed and the government take seriously that this project is a must-have for Canada.
Here's the dilemma that I face. Mr. Lloyd has asked me to rule on whether the amendment is appropriate and acceptable. I'm suffering from the same problem that Mr. McLean is, in that I'm not entirely clear what the amendment is, because I don't have it in front of me in writing.
Therefore, what I am going to propose will, I hope, resolve the problem to everybody's satisfaction. Given that it is Friday afternoon and that our next meeting is Monday morning, can we defer this discussion to the meeting on Monday morning? At that time, we will have the amendment in writing and we will all be able to understand it, and at that time I will be able to look at it and know what I'm ruling on.
We can rule on it and, if it's appropriate, vote on it, and then we can move on to vote on the main motion. We're losing no time, because we're going to be doing it Monday morning instead of this afternoon, and I'm assuming that none of you is interested in having a meeting this weekend.
If that's to everybody's satisfaction, we can get back to the meeting and get back to our witnesses.
The department has not completed an assessment as outlined by the particular member, but I would indicate that the nature of developing the battery components for EVs is that there are multiple steps and multiple elements that are built in many parts of different countries.
If you think about the components, they come from Canada, from the United States, from Europe, from China; they come from many places. I am not quite sure that I can answer the question in the way that it's framed and posed, because it's not necessarily the way we examine these particular issues, but I certainly understand the nature of where the interest is.
Looking at the process by which activities such as making batteries or other industrial activities are done, they are regulated from within the Canadian regulatory context. Any industrial activity or facility in the country is regulated for the emissions it produces and the kinds of activities it does. It depends on the nature of what it is and where it's located.
I'm not sure that fully responds, but I have tried my best to answer the question.
I'd also like to thank the witnesses for their patience today with the unfortunate vote we had in the House and our committee business. I'm deeply sorry for this. You know, although it has been almost a year, it feels as though it has been decades since pretty much our whole committee was at PDAC in Toronto last year, so it's great to see some familiar faces.
I'm really excited to get started with the study today. It comes at a really important time, because the world economy is transforming in many ways, and there's going to be a huge need for critical minerals to support this transition, and also, countries like China are using their dominance in the market of critical minerals to, for instance, hobble the U.S. defence industry or threaten to do that. As countries are seeking to diversify their sourcing of minerals, I think that presents a great opportunity for Canada, but it is going to be a very competitive environment in which to do that.
My first question is for the Mining Association of Canada. What do you see Canada's competitive advantage being in the critical mineral space?
Well, we have a few obvious ones, and they were, I think, highlighted in my remarks but also in those by NRCan. I think one of our advantages is as leaders in environmental, social and governance issues. When I've been to Europe, back when I was able to go to Europe, and have met with industries there, I have been told that their preference is to source from Canada because they know they can rely on the quality and the rigour of our mining practices. They would rather not have to source from the Congo, for example, or from China, if they can get it from Canada, so that is certainly one advantage.
In many parts of the country, we have an abundance of hydro power, and with your grid connected, you're producing metals that have some of the lowest GHG intensity in the world. Nickel, for example, mined in Sudbury, is some of the lowest-GHG-intensity nickel in the world.
We have, obviously, one of the safest mining industries on the planet. I participate in meetings of the International Council on Mining and Metals. Safety is very important to our industry's culture. They regularly put up annual statistics on fatalities in the mining sector around the world, and Canada never appears on their chart. We just don't rank, which is a good thing. You don't want to be on that list.
We have a highly skilled labour force. We're a very high-tech industry. We're advancing in areas like automation. We're advancing in areas like electrification. So we have many, many advantages, but we also need to be conscious of our challenges, and I flagged one of the really important ones.
Currently some of our metals do come from off-grid mines, and carbon pricing is going to be a challenge for those operations unless we can support those facilities. Specifically, mines like Voisey's Bay in Labrador or the Glencore mine in northern Quebec are off-grid, and yet they are two of the world's most important high-grade nickel mines on the planet, and huge assets for Canada. They also have cobalt as by-products. So we need to think about this. We can't just take it for granted.
The last point I'd make is that, as we all know and as Jeff mentioned in his remarks, this is a vast country and we have everything the world needs. We're not necessarily exploiting it, but we certainly have it. If we can get to it and create the right conditions, we could be in a very, very strong place going forward.
I don't know if my colleague Brendan Marshall might want to add to that, or if, Mr. Chair, that's enough from me and from us.
I would like to ask Mr. Gratton and Mr. London a question. I hope that they can hear me clearly on the interpretation channel. Any time Quebec's mining sector is mentioned, what comes to everyone's mind is the iron ore mines from which the Duplessis government was sending Quebec's iron to the United States for a penny a ton. That's our history, and perhaps the shock and the trauma in Quebec lives on when the mining industry is mentioned.
It makes clear to us the great importance of added value, of secondary and tertiary processing. With critical minerals, my impression is that our interests lie in developing clusters around new technologies and batteries. But are we doing enough of that?
So I would like to ask you whether, in your opinion, the federal government has any helpful strategies for secondary and tertiary processing, for added value? If not, what in your opinion should be done to prevent the critical minerals here from simply being exported for processing?
Okay. I was going to suggest that you go first because I was on earlier for five minutes.
My answer would be that we are currently working with the federal government and with Natural Resources Canada precisely to determine the strategies needed to achieve the objectives you have just pointed out. We must create a demand for those products here in North America, not just in Canada, but in Canada and the United States. We must create a demand so that there is a good reason to operate the mines.
I can give you a recent example that involves Natural Resources Canada. The Government of Canada, together with the Government of Ontario, has invested in the reopening of a cobalt refinery in northern Ontario. That is one example. A cobalt refinery that closed a number of years ago has been reopened. That's a very good development.
Since you are from Quebec, let me point out that the Government of Quebec is perhaps the most focused on this issue. Quebec has a very advanced strategy on strategic minerals, not only to find mines, but also to increase the development of the material containing mining products, with the goal of selling them in the United States, in Europe and around the world.
Perhaps my colleague wants to add something. He can actually speak for the downstream work.
Do you want me to help with the translation? He is asking what you—
Thank you for your question, Mr. Simard. Your questions are important ones.
Basically, here, we are working on the strategy for the chain with our provincial and territorial colleagues. We have to work from exploration to mine development, to refinery processing, and to development, as Pierre Gratton mentioned. We are working with our partners.
As always, in Canada and in the North American context, there is integration among provinces. Some mines in Quebec are processing the products of mining. In Ontario, processing is done in order to create products for export to the United States. In return, we get things like automobiles and other forms of transportation. So everything really is integrated.
It is important to create a demand for some products and to hold strategic discussions among provinces and our North American partners to study, look for and perhaps identify significant chains. So we are working with the United States on batteries for electric vehicles. We are also working on semiconductors for computers and the advancement of technologies. We are also working on advanced technologies in healthcare.
So, in the course of our discussions with our partners, we have found that in some significant areas—
I want to thank the witnesses again for coming before us today and for their patience.
I'll start with a question, broadly, for Mr. Labonté from NRCan and for PDAC. These critical minerals and metals are often found in very small amounts, I imagine. For instance, in my riding we have the Teck smelter in Trail, British Columbia, which produces mainly lead and zinc. It also produces germanium and indium in enough quantity—it might be a matter of only a few kilograms, maybe 10 or 20 kilograms; I forget the amount—to be one of the major suppliers for the world.
I'm just wondering about the challenge of actually finding some of these critical minerals—perhaps like lithium or cobalt—and the role the federal government could play there. I guess specifically my question would be, what directions and funding the federal government is providing to the Geological Survey of Canada to provide better information for prospectors and other companies to actually find these materials across our big country?
A very important part of the prospect of moving forward on critical minerals is to realize and discover what minerals we have and what their potential looks like.
As you point out, Mr. Cannings, sometimes the critical minerals that are produced are by-products or smaller components of a bigger operation. You have a primary metal or mineral that's being produced, and almost as a sub-item you also have the critical mineral that's produced as a by-product. It's interesting, because in some cases it's expected that those by-products will become the primary products over time and their importance grows.
The government recently, actually, included a renewal of the geoscience program under the Geological Survey, which falls under the responsibility of our department and my sector, of $130-some million over the next seven years. It's called the geo-mapping for energy and minerals program. It works predominantly in the north. Then there's a secondary program called the targeted geoscience initiative, which actually doubles up with the provinces to work in specific areas where we have opportunities to grow.
We also have research programs that are revisiting mining the value from waste, so taking waste or what might have previously been discarded product and materials produced at mining sites and re-mining those materials and extracting more value from them—extracting, for example, from some of the tailings and other elements, those finer materials that are actually quite valuable now in the critical minerals space.
I'll leave it at that for now, Mr. Chair.
Thank you very much, Lisa.
Thank you for that question, Mr. Chair and Mr. Cannings. I think it's a very valid one.
To put a point on it, you're right, in that many of these types of deposits we're talking about, when we get into critical minerals, can be more challenging to discover, and they can be of smaller scale. I would also echo what Mr. Labonté just mentioned. The TGI and GEM programs, which have been running for a number of years, are instrumental in providing that knowledge base for industry to be able to step off and conduct good work.
Also, when we think about the challenge that's in front of us—when we think of the size of this country and the amount of deposits that may still rest in some of those remote terrigenous regions—there is a real need for more support from the federal government. I think that's particularly why we've landed on thinking about the mineral exploration tax credit and expanding that incentive. It's something that currently exists, and it's something that's been instrumental in making sure there is real, significant capital investment into exploration in Canada each and every year through the METC and the flow-through share regime.
In thinking about trying to spur more investment into these types of potentially smaller deposits and more challenging things to find, it makes sense to consider expanding that incentive, particularly in light of how it is a relatively low-cost item for the government and it's a way to direct retail investment in Canada towards new discoveries. We think that's a simple way to move forward.
We also see where there is a real need beyond just the TGI and GEM programs for further geoscience work, and in particular, as we've talked about, in working with the provinces to a greater degree, to understand where there could be logical centroids or logical places for infrastructure to be developed that maybe can help to bring some of these smaller deposits together and create that upstream production potential that may be lacking right now.
Hello, everyone. I know a lot of faces on the screen. Again, I apologize for the delay. This is a classy panel that we have here.
I'm joining you from Sudbury, where we have eight operating mines right now. I know Samantha is here as well in Sudbury. Actually, the irony is that this morning I was with a businessman who works in electric vehicle batteries. This is a person who is looking at making very important investments in this sector. Certainly we're talking about reusing existing batteries that are used in mining vehicles. We know that a lot of them were actually manufactured right here in Sudbury. There's a lot of amazing technology that is being produced, created, here in Sudbury.
Six minutes will not give me any time to really dive it into what I'd love to talk about for hours, because this is a very, very important file for my riding and, I certainly believe, for Canada.
Maybe I'll start with you, Ms. Espley. With your knowledge and your experience, maybe on the processing and manufacturing side, what opportunities do you see and what challenges do you see with regard to what more we can do here in Canada? I know that here in Sudbury we're lucky. We have two huge smelters, some of the largest in the world when it comes to nickel. Given your experience, how would you say we could increase our processing and manufacturing capacity for our minerals here in Canada?
What I gather from Mr. Lalonde's answer, and perhaps from Mr. Gratton's, is that we have to create a demand for these critical minerals.
My impression is that a lot of that demand will come from electrifying transportation. In that sense, if we want to create demand and support the electrification of transportation, I feel that putting a price on carbon is a very good thing. We would have transportation options with low greenhouse gas emissions.
Mr. Gratton and Mr. Labonté, can you tell me whether those are helpful strategies?
First, carbon pricing, and second, the way in which the government could go about accelerating the electrification of transportation, thereby creating a more worthwhile ecosystem for the critical minerals.
I can speak to that very briefly.
As Pierre mentioned, the association does support carbon pricing. What we're trying to do is effect behavioural change and incentivize the appropriate behaviours on the basis of a carbon price. At the end of the day, we also need to be sensitive that a one-size-fits-all solution isn't apportioned equally in all shapes and sizes. We are carbon-vulnerable in remote and northern regions in this country. As we approach a higher threshold of carbon costs, we're going to need a managed transition to a lower-carbon reality for some of these off-grid sites.
If we want to grow the critical mineral supply chain, then there are many things we can do. I'll speak to that in one moment. We cannot lose sight of or take for granted the pre-existing world-class critical mineral supply chain that already exists in Canada—in Quebec, Ontario, in other provinces and the north.
The next part of your question also speaks to a question that Mr. Lefebvre had: What gaps need to be filled here? I think it would be a false impression for this committee to take away that a critical mineral supply chain and a battery electric vehicle supply chain are one and the same thing. They overlap, but the reality is they are also very different. Some critical minerals don't go into batteries, but they do go into electric vehicles. Some critical minerals go into computer chips that electric vehicles can't work without, but they're not in the battery themselves.
It's a terrific question.
The issue here is about creating a circular economy. Many of the minerals, critical minerals and metals that we have and need, will come in a circular economy. A metal can be used almost endlessly, as it begins and ends its life in different products and forms.
We're looking at a number of instruments and certainly a number of places. We're doing research on extracting from existing streams and looking at some of those streams as being recycling.
There's the regulatory context of the recycling regulations that exist across the country. They are different in different places, for different materials. In some instances, the drive behind those regimes has often been waste reduction, to reduce the amount and volume of waste, rather than extracting a value from the waste. Some of this is about turning around the purpose for the recycling, and of course having a dual interest. Less metal requirement from a demand point of view will also lessen the amount of waste that's produced if it's drawn from recycling sources and purposes.
There is a manner in which we can work together and think that through a little more closely. One of the topics we're working on with our provincial and territorial colleagues is about exploring and understanding where that value can be extracted from recycling activities.
Thank you all for your testimonies today.
I have a question, a bit of a different take on it, I suppose. I think Mr. Lloyd alluded to this too, about how governments can kneecap industry and make it so difficult to operate with timelines of approval, etc. It becomes very vulnerable to takeovers. Many of you have seen the recent attempt at a takeover, but blocked by this government, which I give them kudos for doing. Everybody knows the TMAC Resources Hope Bay situation.
Mr. Gratton, what would you do to best ensure that our resources aren't put at risk by some of these situations?
I see some of the way this government has kneecapped the resource sector; it makes it—
Two things have happened recently in the U.S. I'm sure you've been appropriately briefed, or you will be. One is the contemplation of the GREEN Act, where the Trump administration put caps on the number of electric vehicles that could be produced in the U.S. by each manufacturer. That has been tripled in the last little while.
How do you encourage more electric vehicles? How do we put in requirements by the manufacturers of the vehicles? We put a lot of money into General Motors, the Oakville plants and all of this. On Canadian content rules, there are ways of doing it. The Europeans are very interested in Canadian minerals. They're just as interested in processing them. I suggest we don't get too engaged in selling them or providing them with just pure raw materials. How do we value-add to it? We can do that through these trade agreements, and branding Canada's product as cleaner and more transparent in terms of traceability, provenance and so on. There are a number of ways for Canada to be at the table on standards and on metallurgy.
I want to compliment the folks around the table. It's not just batteries. It's also the light weight in materials. If we can take 500 pounds off the weight of that car, we can carry that battery. There are a number of these things. We have different kinds of wiring in vehicles. We have the manufacturing base. Jaguar already makes an all-electric vehicle. It's actually built by Magna in Austria. We shouldn't kid ourselves about advancing technologies. How do we engage those end-users? They will create demand and they have the pull on the supply chain. It will make it easier to finance some of the mining projects.
My last comment—I appreciate having this time—is about demand pull versus supply push. We need to create that. As such, if you look at demand pull, no disrespect to all my colleagues who come out of that world, but this is not necessarily a mining initiative. It's not just mining. It's that whole industrialization that we're talking about. We should not lose sight of that fact.
Thanks, Mr. Sidhu. I appreciate your sticking to the time.
To all our witnesses, thank you for your input. This was the first day of the study. You got us off to a great start. Thank you again for your patience and for indulging us. It has been, for some more than others, a very strange day in our business. Sometimes things get in the way. You guys were great.
I want to thank all the staff and the people who hung around and helped us get this meeting concluded. It has been a long day and a long week.
All the best, everyone, and thanks very much.
The meeting is adjourned.