Seizing Canada’s Critical Mineral Moment

Artificial intelligence (AI) and electrification are reshaping the global economy, driving unprecedented energy demand that is testing the limits of existing infrastructure. As data centers and digital infrastructure expand to power this transformation, global supply chains are under strain and intensifying the race for critical minerals. For resource-rich nations, such as Canada, this convergence of digitalization and energy demand represents both an economic opportunity and a strategic leverage.

With the United States turning inward to focus on domestic investments, Canada is looking outward: investing in the industries and supply chains that will redefine the next decade of energy security. The newly released 2025 federal budget outlines how Canada is doubling down on industrial self-reliance through the allocation of $280 billion over five years, including $2 billion for a Critical Minerals Sovereign Fund and $1.5 billion for First and Last Mile infrastructure.

Few countries are better positioned to seize the moment. With more than 60 minerals produced across 200 mines, and approximately 130 new projects currently underway, Canada’s geology is shaping up to be a worthy rival to global competitors. There’s nickel in Ontario, lithium in Quebec, and rare earths in the Northwest Territories. Additionally, in 2023, the sector contributed $117 billion to Canada’s $2.9 trillion GDP, according to Canada’s 2025 Mining Story. As the International Energy Agency projects global demand for critical minerals to nearly triple by 2030, Canada’s role as a secure and responsible supplier is becoming increasingly prominent.

Canada’s critical minerals strategy presents a rare opportunity for investment, but its success relies on effective execution. With billions in federal and provincial funding available, the mining industry’s competitive edge will belong to companies that move early, align with national priorities, and strategically layer multiple funding programs, turning policy ambitions into production realities.

Canada’s incentive landscape

Canada’s policy framework has become one of the most comprehensive in the world, especially since the release of its federal budget. A wave of new programs designed to accelerate project development is changing Canada’s critical minerals strategy. Let’s break some of them down:

• A $2 billion Critical Minerals Sovereign Fund will provide equity investments and loan guarantees to help finance new mines and processing facilities.
• The First and Last Mile Fund will consolidate the Critical Minerals Infrastructure Fund to deliver $1.5 billion through 2030 for clean-energy transport infrastructure that supports mining expansion.
• The Critical Mineral Exploration Tax Credit will be broadened to cover a wide range of minerals, and the Clean Technology Manufacturing Tax Credit will expand to include additional materials critical to advanced manufacturing.
• An additional $443 million over five years will be given to Natural Resources Canada and ISED in support of various critical minerals development technologies, projects, and security tactics.

With all these incentives, combined with $93 billion in clean economy investment tax credits, Canada is poised to leverage private sector funding to strengthen its domestic supply chains for technologies such as batteries, semiconductors, and renewable energy. Together, these incentives and tax credits aim to strengthen Canada’s clean technology and mining supply chains – from resource extraction to advanced manufacturing.

Aside from the new budget updates, the provincial incentives are also strong. Ontario has tied its mineral-development policies to EV battery manufacturing strategy; Quebec is investing heavily in processing capacity and battery-grade materials; British Columbia is promoting mine electrification and low-carbon permitting processes. Additionally, in March 2025, Ottawa announced a new $500 million funding call through the Critical Minerals Infrastructure Fund (CMIF) to continue expanding sustainable incentives by promoting clean energy and transportation infrastructure. In total, CMIF provides up to $1.5 billion over seven years, complementing other federal supports, which include tax credits, research grants, and export-development financing.

These programs create an unprecedented funding environment for mining and advanced materials, which is why Canada remains a “blue ocean-market” because it offers billions in public capital with relatively low competition in comparison to other jurisdictions. The challenge now is to coordinate effectively by ensuring companies can navigate and layer these incentives to keep projects on track for production. For those taking advantage of these incentives early, Canada’s evolving funding ecosystem represents not only support, but a platform for long-term leadership in the global critical minerals supply chain.

What companies should be doing now

As government support accelerates, companies will need to act just as strategically to capture the benefits. To position effectively, they should:

• Map incentive alignment early: Many federal and provincial programs require coordination long before a project reaches application state, and early engagement can unlock eligibility across multiple funding streams.
• Align with national priorities: The most competitive among these projects are ones that align with Canada’s six priority minerals (lithium, graphite, nickel, cobalt, copper, and rare earths) out of the 34 because federal programs concentrate funding and infrastructure support around these strategic materials.
• Integrate Indigenous partnerships: Another essential step is to integrate Indigenous partnerships. The 2025 update to the Critical Minerals Strategy identified Indigenous collaboration as a cornerstone of responsible development, emphasizing co-ownership, community engagement, and capacity building.
• Target full value-chain participation: Companies also need to target full value chain participation, from extraction and processing to battery manufacturing and recycling. Investors and policy makers increasingly favor vertically integrated projects that contribute to domestic resilience and decrease the need for foreign inputs. 
• Move fast: Finally, timing is important. With more than 130 projects currently under development, early entrants have a better chance of securing infrastructure access, funding, and long-term partnerships before the field becomes too crowded.

Challenges and how to navigate them

Even with strong policy momentum, Canada’s critical minerals sector faces bottlenecks. Permitting and infrastructure delays are some of the most significant, as they can last a decade or more unless regulators and industry coordinate early. Additionally, global competition is on the rise, with the United States, the European Union, and Australia all individually expanding their own subsidy programs. In Canada, processing and refining capacity still lags extraction, meaning more investment in midstream infrastructure is needed to capture full value domestically. Investments in midstream capacity, including processing and manufacturing, will also help firms capture a greater share of domestic value.  Multinational firms must also navigate overlapping federal and provincial regulations, which can slow project approvals.

To succeed in this environment, execution is just as important as opportunity. Companies that approach Canada’s funding ecosystem as an “integration” challenge rather than a financial one are most likely to succeed. Approaching regulators can help shorten permitting cycles and unlock access to funding across federal and provincial programs.

Above all, strategic alignment is critical because Canada’s Critical Minerals Policy is structured around energy security and allied resilience. The companies that coordinate across governments, Indigenous partners, and industry networks will move projects from exploration to operation the fastest.

From policy to production

Canada’s critical minerals opportunity is accelerating rapidly. With more than $700 million already invested, production on the rise, and the policy agenda laser-focused on energy security and supply chain resilience, the landscape is rich in potential. The next phase relies on execution: how effectively industry and government can align priorities and coordinate incentives to ensure that the strategy translates into sustained production.

Companies need to move early, but also strategically. Success will depend on effectively layering federal and provincial programs, engaging Indigenous partners, and investing across the full value chain. By keeping these areas in mind, they will not only secure a competitive edge but also help solidify Canada’s role as a cornerstone of the global clean energy and defense supply chain.