National security questions about countries like China and Russia helped “inform” Canada’s new critical minerals strategy, Natural Resources Minister Jonathan Wilkinson says.
His comments come after the federal government unveiled the strategy on Friday, which focuses on driving exploration and building sustainable infrastructure.
As part of the new approach to critical minerals, Canada is hoping to reduce its reliance on international partners that don’t share common values, Wilkinson said — particularly after the world watched Russia withhold natural gas supplies from European countries amid the war in Ukraine, prompting massive shortages in the region.
During an interview for The West Block, aired Sunday, host Mercedes Stephenson asked the natural resources minister how much of the critical minerals strategy was informed by Russia’s war in Ukraine — and Canada’s increasingly chilly relationship with Beijing.
“I think the world learned a lot in the aftermath of the illegal Russian invasion of Ukraine, where Germany found itself very much dependent on Russia for oil and gas,” Wilkinson responded.
“I don’t think anybody wants to be in that position on a go-forward basis with critical minerals.”
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Between 80 and 90 per cent of rare earth elements are processed in China, Wilkinson added.
“That’s, just from a national security perspective, not somewhere where we want to go, our American friends want to go, our European friends want to go,” he said.
“And so it did help to inform some of the strategy for sure.”
The new strategy is backed by nearly $4 billion in the 2022 federal budget. Among the measures included are a new 30 per cent tax credit to “support exploration” for critical minerals such as nickel, lithium, cobalt, graphite, copper, rare earth elements, vanadium and uranium.
The plan also includes a focus on speeding up project approvals, as well as environmental protection.
“We do have significant reserves of a number of these (minerals), but there is enormous untapped potential,” Wilkinson said.
The new strategy comes amid a global rush to secure critical minerals, many of which are vital for electronics such as semiconductors, batteries and electric vehicle motors. The strategy also coincides with growing tensions between Canada and China, which has previously purchased or invested in Canadian mines and other natural resources.
China is the dominant player in critical minerals refining and processing, as well as the manufacturing supply chain of battery cell components.
But China does not produce a lot of the minerals and has instead invested heavily in overseas mines in places such as Canada to acquire the raw materials it needs.
Canada and its allies are desperately trying to upend China’s dominance in the field and create a supply chain that relies on what it calls more stable and reliable partners.
“Canada has an opportunity here,” Wilkinson said, pointing to the jobs, money and manufacturing possibilities in the critical minerals sector.
“Canada has huge comparative advantages in this area, and we can capitalize on that if we are smart, thoughtful and strategic.”
— With files from Global News’ Saba Aziz
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