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Canadian Chamber of Commerce urges federal parties to talk critical minerals strategy


WASHINGTON — The relentless march of climate change, a burgeoning tech sector and the ongoing federal election campaign make now the perfect time to explore how to make Canada a world power in the production of critical minerals, the country's business leaders say.

The Canadian Chamber of Commerce is urging the parties vying to form the next government to spell out their strategies for making critical minerals and rare-earth elements a fundamental part of North America's economic recovery.

It says Canada is missing a "major opportunity" to be a global leader in producing the metals that power everything from cellphones to electric cars — minerals it says must be at the centre of any serious effort to develop a low-carbon economy and confront climate change. 

"The importance of strengthening trusted and sustainable critical mineral supply chains and reducing our dependence on China is growing for both Canada and the United States," the chamber says in a release.  

"Canada urgently needs a trade and economic strategy for our own critical mineral deposits. Failing to prepare is preparing to fail."  

The chamber wants to see detailed plans for encouraging and expanding domestic production, fortifying vulnerable supply chains and partnering with the U.S., where President Joe Biden's climate ambitions rest on jump-starting an already red-hot electric-vehicle market. 

Canada is already a key source of 13 of the 35 minerals that the U.S. has identified as critical to its economic and national security — it is America's largest single supplier of potash, indium, aluminum and tellurium, and the second-largest source of niobium, tungsten and magnesium. 

China is the world's largest rare-earth producer, with more than 60 per cent of global annual production, well ahead of the U.S., Myanmar, Australia and India. Canada, meanwhile, is home to an estimated 15 million untapped tonnes of rare-earth oxides. 

It's a political issue because there's not yet enough private-sector demand to stimulate the growth of a nascent rare-earth industry without government incentives, said Mark Agnew, the chamber's senior vice-president of  policy and government relations. 

"The thing that we hear is that there needs to be that kind of downstream demand to create the financial incentives for it to be extracted upstream," Agnew said. 

"That's why what we are talking about is, 'OK, how do you generate demand?"  

In their campaign platform, Justin Trudeau's Liberals promise to use "the minerals at our fingertips" to build batteries for zero-emissions vehicles and "position Canada as a world leader in this space," although there are few specifics beyond a vague pledge to "attract investment."

The federal Liberal government's 2021 budget included plans for an $8-billion "net zero accelerator" to subsidize clean-technology investments in the manufacturing and natural resources sector, and to help expand the development and production of electric vehicles.

"What we really want to show to the world and show to companies and potential investors is that if you invest in Canada, you really can have that whole supply chain," said Liberal spokesman Alex Deslongchamps.

"Wherever you are in that supply chain, whether you're the manufacturer, the producer, or the actual mining companies, the next person in that chain is right there domestically, and is integrated." 

The Conservative election platform proffers a five-year, $5-billion innovation fund, part of which it would put toward stimulating EV development, including battery technology, if Erin O'Toole were to be elected prime minister. 

And if Jagmeet Singh were elected, the NDP says it would use incentives to encourage families to buy "made-in-Canada" zero-emissions vehicles, build more charging stations and establish a research centre to spur new advances in hydrogen, batteries and energy storage. 

In addition to extracting minerals in a sustainable way, with the full blessing of Indigenous communities, Singh said, Canada must also do the value-added work — refining, processing and manufacturing — at home as well. 

"We need to make sure we're manufacturing the goods of the future, which is renewable energy, which is electrified transportation," he said. "There's a lot that we can do and we've got a plan to make sure we achieve it."

In 2019, the U.S. State Department and Bureau of Energy Resources established a multilateral initiative aimed at ensuring reliable supply chains for critical minerals. Canada signed on and established a so-called joint action plan with the U.S. early in 2020.

Officials from both countries met virtually in June last year as part of a critical minerals working group to advance discussions on that plan — efforts Ottawa billed as evidence that it was serious about attracting investment to make the metals a central component of Canada's natural resources industry.

In February of this year, meetings between Trudeau and President Joe Biden produced a "road map" for a renewed bilateral relationship that included vows to make Canada and the U.S. "global leaders in all aspects of battery development and production." 

Since then, however, the American commitment to that plan has come into question, particularly given Biden's strident rhetoric about his protectionist "Buy American" doctrine and the apparent disconnect over non-essential travel across the Canada-U.S. border. 

Canadians are largely prohibited from crossing the land border for discretionary purposes until at least Sept. 21, even though fully vaccinated U.S. citizens and permanent residents have been allowed to travel north for nearly a month. 

And Biden has promised a strict cap on exemptions to Buy American, rhetoric that worries Canadian suppliers and contractors who fear a chilling effect on their ability to do business with state and local governments south of the border.

"There are plenty of reasons for Canada to be deeply frustrated," said Eric Miller, a Canada-U.S. expert and president of the D.C.-based Rideau Potomac Strategy Group. 

"They're finding out that the United States is a country which is evolving, which has got many domestic challenges … and you've got a president in Joe Biden who's happy to work with you on what he wants to work on, but he's not much interested in what you want to work on." 

This report by The Canadian Press was first published Sept. 2, 2021. 

James McCarten, The Canadian Press

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