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Canada’s $43-billion subsidy scheme for critical minerals misses supply chain steps
(theconversation.com)
Authors:
Chris Arsenault
Chair of the Master of Media in Journalism and Communication Program (MMJC) and assistant professor of journalism, Western University
Philippe Le Billon
Professor, Geography Department and School of Public Policy & Global Affairs, University of British Columbia
Raphael Deberdt
Postdoctoral Fellow, Mining Engineering Department, Colorado School of Mines
Excerpt:
As climate change intensifies, companies and countries are attempting to build new low-carbon supply chains. From electric vehicles to solar panels and wind turbines, these technologies require vast amounts of critical minerals.
These are commodities such as cobalt, lithium and nickel, and also include a smaller set of 17 rare earth elements like dysprosium, neodymium, praseodymium and terbium.
Canada’s federal government, and provincial officials in Ontario, have pledged some of the biggest public subsidies to private companies in a generation — more than $43 billion — to create this new supply chain.
Plans for new mines in Northern Ontario’s “Ring of Fire” to extract critical minerals parallel billions in production subsidies to EV producers and related manufacturers in the province’s southern manufacturing heartland.
The idea is to supply southern factories with northern minerals. Instead of only exporting unrefined primary commodities like oil, copper or lumber, Canadian industry would also export high-value, renewable technology-related products.
In addition to promises around jobs, innovative industries and fighting climate change, politicians, business executives and military analysts frame the country’s critical minerals strategy around countering China’s dominance.
However, our new study identified several challenges to subsidizing supply chain integration in Canada.
Based on 20 interviews with government officials and industry leaders in Ontario’s critical minerals sector, and a review of existing literature, we identified challenges including: opposition to new mining and infrastructure projects, particularly from some Indigenous communities; some policymakers lacking understanding of the complexity of supply chains; slowing global EV demand and regional trade barriers at a time of uncertainty for the sector.
