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Prime Minister Trudeau's throne speech bodes well for Canada's mining sector

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Prime Minister Trudeau's throne speech bodes well for Canada's mining sector

Canadian Prime Minister Justin Trudeau recently delivered a throne speech that singled out mining as critical to the country's effort to lower carbon emissions and shift its manufacturing base away from fossil fuel-related industries.

"A good example of adapting to a carbon-neutral future is building zero-emissions vehicles and batteries," Governor General Julie Payette said, reading Trudeau's speech, which sets the stage for a new session of Parliament. "Canada has the resources, from nickel to copper, needed for these clean technologies. This, combined with Canadian expertise, is Canada's competitive edge."

SNL Image
The Saskatchewan Research Council has been developing rare earth extraction processes over the past decade.
Source: Saskatchewan Research Council

Mining Association of Canada President and CEO Pierre Gratton said the commentary bodes well for the mining sector. Gratton noted that mining was one of the few industries named specifically in the speech, suggesting Trudeau's Liberal Party government continues to see metal resources as a key part of a wider ambition to build a greener economy.

"It's hard to be the one that complains," Gratton said. "In fact, normally, mining doesn't get mentioned at all."

The focus on metals as key to a green economy came days after Navdeep Bains, Canada's minister of innovation, science and industry, outlined a policy position casting Canada's mining sector as a competitive advantage and critical to electrification, in an article for the online Policy Options magazine.

"Fortunately, Canada has a competitive advantage in this realm, too: our natural resources and the scientific excellence and manufacturing skills to maximize them," Bains wrote Sept. 17. "More specifically, we are the only nation in the Western Hemisphere with an abundance of cobalt, graphite, lithium and nickel, the minerals needed to make next-generation electric batteries."

Gratton said the Liberals' focus on metals coincides with federal and provincial initiatives to grow capacity in the electric vehicle and battery sectors and to address concerns oversupply of certain metals such as rare earths.

In terms of the push to electrify the transport sector, Gratton noted that Ford Motor Co. recently announced plans to start building electric vehicles in Canada. "A whole new manufacturing sector will create demand for North American metals," he said. "So that's really quite encouraging."

Gratton also noted that Canadian and U.S. officials continue to work together on ways to lessen dependence on critical metals from China, with an industry-government workshop set to be held in the fall.

"It's already been identified that some of what's needed are investments in research and development to solve some of the environmental challenges associated with rare earths ... and creating the demand pull for these materials within North America," he said.

Supply chain concerns over some metals is also an issue where both the governing Liberals and the Conservative Party, Canada's official opposition, hold similar views. Canada's Conservative leader, Erin O'Toole, has made trade issues with China, including those regarding rare earths, a central part of his party's platform.

Taking a harder line on China than the Liberals, O'Toole recently told S&P Global Market Intelligence that he would like to see democratic countries build parallel supply chains to China's.

"As countries are restructuring global trade post-COVID, with concerns vis-a-vis China, we should position ourselves as the resource provider for the democratic world," O'Toole said during a Sept. 15 interview.

At the provincial level in Canada, a push has already started for domestic rare earths, which are used in a wide array of electronics and magnets. Saskatchewan recently announced it would spend C$31 million to build a commercial demonstration plant, set to start up in 2022, that can concentrate and separate rare earths from deposits in the province or elsewhere in Canada.

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