Critical minerals

The opportunity

The global race to secure critical mineral supply chains has thrust Canada into the spotlight. As demand intensifies, and with global supply and processing capacity highly concentrated in a few dominant countries, Canada’s vast mineral endowment has become an important strategic asset. Federal and provincial governments are responding with ambitious policy reforms and billions of dollars in new investment programs.

Getting projects approved faster is an essential part of Canada’s efforts. The mandate of the Major Projects Office (MPO) is to accelerate nationally significant projects, and the federal government has referred five critical mineral projects to the MPO thus far. The MPO has also been asked to focus its attention on the federal Critical Minerals Strategy.

In May 2026, the federal government announced a series of reforms to accelerate its approvals regime. Provincially, British Columbia, Ontario and Québec have also adopted new legislation to simplify the regulatory process and shorten review times. Relatedly, critical mineral development and supply have become key components of Canada’s Arctic development and defence industrial strategies.

Private capital is essential to advancing critical mineral development in Canada. Complementing the reliance on private capital is an unprecedented effort by Canadian governments to provide direct and indirect financial supports for critical mineral projects. Project proponents must assess how they can access and participate in this funding, along with private capital solutions.

Market entry and investment strategies

Joint ventures. Increasingly, mining companies are finding creative ways to partner in joint venture (JV) and partnership structures to develop critical mineral projects. This is driven by the demand for critical minerals—dovetailing with operators seeking to derisk project development and expansion—and a recognition of competing priorities in terms of project economics and ensuring offtake supply.

Aligning with Canada’s defence strategy. Released in February 2026, Canada’s new Defence Industrial Strategy commits the federal government to ensuring a reliable supply of critical raw materials (including critical minerals, steel, and aluminum). Canada will also release a plan to expand the production, processing, stockpiling, and procurement of defence-related critical minerals. In May 2026, Ontario released a framework for its Ontario Defence Industrial Strategy that similarly aims to leverage the province’s strengths in critical minerals.

Structuring stakeholder relationships. As investors evaluate emerging opportunities across Canada’s critical minerals sector, an equally important consideration is how they structure their relationships with governments and key stakeholders throughout project development. Depending on the project’s scale or type, this may include partnerships with a government agency, the MPO, or Indigenous communities. This consideration is particularly important in the context of managing expedited project approval timelines.

Financing and capital structures

There is a heightened level of commitment by all levels of government in Canada to support critical mineral development through strategic investments, both through nation-building mega-funds and more targeted, critical mineral–specific endowments.

Canada announced its first national sovereign wealth fund in April 2026. With an initial federal contribution of $25 billion, the Canada Strong Fund will strategically invest, alongside the private sector, in Canadian projects and companies driving the country’s economic transformation, including critical minerals.

The federal government also announced $35 billion in March 2026 to defend, build, and modernize the Arctic, with $10 billion designated for major dual-use infrastructure projects. This includes support for the development of critical minerals. The year 2026 has also seen the Canada Growth Fund announce investments in a nickel complex in Manitoba and in Canada’s largest operating lithium mine.

This all follows the $1.5 billion Critical Minerals Infrastructure Fund (now operating as the Critical Minerals First and Last Mile Fund) that was announced in the 2025 federal budget, intended to support strategic mining and infrastructure projects that will strengthen Canada’s critical mineral value chains.

Furthermore, existing institutions have been enlisted to provide policy solutions and financial support. Export Development Canada (EDC) recently expanded its support of the critical mineral sector, providing direct financing, and reclamation and bonding support. Canada Infrastructure Bank (CIB) provides a policy-driven tool to attract private capital. CIB’s critical mineral–related investments facilitate the construction of enabling and supporting infrastructure in remote areas of Canada.

In addition to investing in infrastructure, capacity building and demand support, the federal government also recently began to invest directly in mines and metal processing projects, most notably agreeing to an MOU with Teck Resources, which could lead to a $400-million equity-like investment in Teck’s Trail, British Columbia smelting and refining complex, to boost production of germanium and antimony, and to potentially add gallium production—all key critical minerals with numerous critical uses, including in the technology and defence spaces. This is the first proposed agreement under the new Canada Critical Minerals Accelerator (previously the Critical Minerals Sovereign Fund).

Key risks and how to manage them

Momentum into execution

Canada’s recent policy moves and investment commitments have created meaningful momentum for critical mineral development. The challenge now is execution: ensuring that infrastructure planning, regulatory certainty, and market‑support tools come together to take projects from generation to development. Investors are following this progress closely, and should structure their investments to maximize available protections in the event of policy shifts on the part of future governments.

Investment Canada Act scrutiny

Foreign investments bring additional complexity to transactions. Review timelines could be accelerated where the government feels that certain deals are aligned with the national interest (as was the case in the Anglo-Teck transaction).

Strategic clarity at the outset of a deal (i.e., a compelling rationale as to why a deal is in the public interest), along with a clearly developed strategy to identify and make commitments to strengthen Canada as a critical mineral power, may help foreign transactions across the finish line.

Court challenges

Given the fundamental changes to Canada’s project approval processes and the pace of policy reforms, it is reasonable to anticipate that court challenges may arise. Canada’s constitutional duty to consult Indigenous communities on projects that may impact these communities has particular potential for court challenges.

Indigenous partnerships

Building meaningful partnerships with Indigenous communities is crucial to the success of most critical mineral projects in Canada. In its policy reforms, the federal government has emphasized the importance of addressing Indigenous rights, related consultation duties, and broader engagement on Indigenous interests. Investors should pay close attention to how projects can create opportunities and generate economic benefits for Indigenous communities, and establish long-term, mutually beneficial partnerships.

Investors can also take advantage of enhanced opportunities in working with Indigenous communities, including through the Critical Minerals Infrastructure Fund. For example, the Fund’s contribution funding limits coverage of expenses to 50% of a project’s total eligible expenses, but the Fund will provide funding for up to 75% of eligible expenses for “Arctic, Northern and Indigenous-led projects.”

When structuring Indigenous equity partnerships, proponents should carefully consider Indigenous protocols and culturally respectful ways to engage communities; financing and addressing capital funding over the life of a project; alignment between support for project development and economic incentives; and governance, and the need to balance retaining operational control of a project with the involvement of Indigenous groups.

All dollar amounts in this primer are C$ unless indicated otherwise.