Billions in funding set aside for mineral exploration, development in budget: feds

A big boost in funding and tax credits for mineral exploration and mining was included in the recent federal budget.

Within the budget, the federal government pledges to spend billions to support what it calls Canada’s “critical minerals industry” - namely copper, zinc and rare earth minerals.

“Critical minerals are central to major global industries like clean technology, health care, aerospace, and computing. They are used in phones, computers, and in our cars. They are already essential to the global economy and will continue to be in even greater demand in the years to come,” reads the summation of critical mineral spending, found on page 65 of the budget document.

“Canada has an abundance of a number of valuable critical minerals, but we need to make significant investments to make the most of these resources.”

That will include providing up to $3.8 billion, to be paid out over the next eight years starting this fiscal year, to produce a critical minerals strategy. That spend will include up to $1.5 billion over seven years, starting in 2023-24, to help develop supply chain infrastructure for mining (with special focus on priority deposits), as well as $79.2 million over five years to be given to Natural Resources Canada to develop data sets to help in mineral exploration and development.

On top of that is the new Critical Mineral Exploration Tax Credit, a 30 per cent credit for mineral exploration expenses done in Canada. The credit, according to the budget announcement, will apply to zinc, copper, nickel and lithium exploration spending, as well as for cobalt, graphite, titanium, magnesium, uranium and other minerals, including rare earth minerals.

Yet more funding will go to Natural Resources Canada starting in 2024-25 to renew the Centre of Excellence on Critical Minerals - about $10.6 million over three years - and up to $144.4 million over five years to the organizations and to the National Resource Council to “support research, development, and the deployment of technologies and materials to support critical mineral value chains.”

About $103.4 million over five years, starting this year, will be given to Natural Resources Canada to develop a benefits-sharing framework for natural resource extraction, as well as expanding the Indigenous Partnership Office and the Indigenous Natural Resource Partnership program.

“These investments will increase Indigenous capacity to benefit from all types of natural resources projects, including critical minerals and are a key component of the Partnering with Indigenous Peoples in Natural Resource Projects proposal in Chapter 7,” reads the document.