Geopolitical tensions and demand expectations have prompted Canada and Ontario to promote critical minerals self-sufficiency. Government funding is being unlocked, permitting is being streamlined, and private capital is ready to jump on the opportunity – promising bright times ahead for the sector.
“The Canadian critical mineral sector is one of the few things that’s actually benefited from Trump showing up in the White House.” With this statement to Energy and Mines, Mark Selby, CEO of Canada Nickel, captured a sentiment shared by many in the mining sector over the last few months – since President Trump started a tariff war with much of the world, including Canada.
So far, the US has imposed a 35% tariff on all non-free trade Canadian goods and a 50% levy on Canadian steel, aluminum and copper. In response, Canada has introduced a 25% tariff on US agricultural products, as well as vehicles, steel, aluminium and certain manufactured products, though has now agreed to remove tariffs on goods compliant with US-Mexico-Canada free trade agreement. These developments have put a strain on the two countries’ commercial relationship and even cast doubts over the future of the 2020 US-Canada Joint Action Plan on Critical Minerals Collaboration.
At the same time, Trump announced new tariffs on all Chinese imports, which could reach 125% by November. In retaliation, China – an undisputed superpower of the global critical minerals supply chain – imposed export restrictions on seven rare earth elements and magnets used in the defense, energy, and automotive sectors.
This environment, as well as recent changes to defense policies, has forced Canada – which exports more than C$60 billion of raw critical minerals annually, but also imports half this value in refined metals – to rethink its strategy.
“This is certainly causing us to look at things a little bit differently. The significant amount of spending by NATO (over US$2 trillion over the next 10 yrs) on defense is also a great opportunity, as we have an abundance of critical minerals essential to the defense within Ontario, and a long history developing critical mineral assets, from mining through processing and operations in Canada,” said Randy Broderick, Managing Director, Nickel & PGMs at Hatch.
Permitting issues and policy landscape
Ontario’s mining industry already generates more than C$10 billion in annual production, and the province sits on top of abundant deposits of nickel, lithium, platinum, cobalt and dozens of other critical materials. But structural issues have so far prevented it from achieving its full potential.
The first one is permitting. “In Canada, it could take upwards of 15 to 20 years to become fully permitted, from the first drill hole to actually extracting resources,” noted Jamie Levy, CEO of Generation Mining, which is developing a palladium-copper project in Northwestern Ontario.
Ontario has long been seen as a laggard when it comes to mining permitting times: in the Fraser Institute’s annual survey of mining companies, Ontario respondents consistently indicate that they wait longer to receive their permits than in competing provinces, but also that Ontario also offers less transparency and certainty throughout the permitting process. In the 2024 survey, just 27% of Ontario respondents said they received their exploration permit in less than two months – compared to 86% in Newfoundland and Labrador.
In acknowledgment of this issue, the Ontario government passed Bill 5 in June 2025 with the goal of cutting permitting times by half. Among other elements, the law empowers the government to create special economic zones where companies or projects can be exempted from having to comply with certain environmental, labour or operational requirements.
The provincial bill is partially aligned with Canada’s Bill C-5, which exempts “projects of national interest” from certain requirements to streamline permitting – with mining developments in Ontario’s Ring of Fire region expected to make the shortlist.
“If it takes 10 to 17 years to develop an operating mine, we’re going to be left behind. So I think Bill C-5 is really about pushing us to get more focused on how we reduce red tape while continuing to meet the critical need for early consultation/collaboration with local communities and Indigenous peoples,” explained Broderick at Hatch.
Bill 5 is just one of a series of policy measures to incentivise domestic critical minerals exploration, extraction and processing in Ontario: Other measures include a C$7 million fund for mining innovation, a C$10 million investment for junior exploration, C$500 million to accelerate midstream processing capacity – and numerous initiatives to increase the province’s energy security through new transmission lines, hydroelectric stations and small modular reactors.
First Nations partnerships amid Bill 5 controversy
But Ontario’s Bill 5 is not without controversy – partly because it was passed without consulting with Indigenous groups. “First nations are generally speaking in favor of development, but you need consultation. So if you tell me that it’s a fait accompli, the law has been passed and you haven’t asked me my view on it, that’s sort of missing the key element of duty to consult,” explained Fred Di Blasio, Co-Founder, Managing Partner and CEO of Indigenous-owned asset manager Longhouse Capital and a member of the Wendat First Nation.
First Nations in the province have filed a petition to cancel the bill, as well as certain parts of Bill C-5, on the grounds that they “severely threaten their rights to self-determine their ways of life on their homeland territories, the environment and fundamental human freedoms”.
They are concerned about the possibility that strategic projects might be exempt from the requirement to obtain free, prior and informed consent from Indigenous communities – as well as disregarding potential environmental and cultural damages.
But for advocacy group First Peoples Law, Bills 5 and C-5 will actually support greater engagement with Indigenous communities. “Because everything will turn on a federal decision to designate a project as being in the ‘national interest’, the federal government will not be able to rely on its existing processes [to fulfil its duty to consult],” the group explains.
This means that the federal and provincial governments will have to consult First Nations before selecting the projects to fast-track – or face litigation.
Critical minerals players are convinced that the bill will not jeopardise their commercial relationships with Indigenous communities – which have grown significantly in recent years.
Canada Nickel, for example, has signed several partnerships with Ontario First Nations – including a contracting agreement with Mattagami, Matachewan, and Flying Nations to give them preferential access on its estimated C$2.8 billion Crawford project in Timmins, Northern Ontario. In late May, the project also received a C$20 million investment from Taykwa Tagamou Nation – the largest known direct equity investment from an Indigenous nation in a critical minerals project.
For the company’s CEO, there’s no going back on the trust that’s been built over the years. “Trust doesn’t happen overnight: it’s something that’s earned over a period of time. And I think our demonstrated willingness to do it a little bit differently has earned us that trust. The investment by Taykwa Tagamon Nation, using C$20 million of their own capital, makes that pretty clear. We’ve been able to get to that next level, where they have a seat at the table, where they do have a board seat, and in terms of economic reconciliation, these are the kind of things that we need to do.”
It is with this mindset that Canada Nickel is approaching not just its mining project (which has been recognised as one of five “strategic critical minerals projects ready for near-term development as part of three transformational, nation-building projects”), but also two net zero processing facilities to transform the resources domestically – which will in turn support other mines in Northern Ontario.
Room for improvement
Though it might take some time to fully reap the benefits of its favourable policy environment, Ontario appears poised to unlock its full critical minerals supply chain – and with Europe and North America all keen to reduce their reliance on China and source more environmentally responsible minerals for their growing electricity, data centre, EV and defense needs, demand is expected to be strong for years to come.
Still, certain elements could still be improved to further support project developers. “There’s not enough capital in the market, and funding costs have gone a lot higher, so the cost to build these projects has increased,” said Levy at GenMining, which hopes to receive some government funding for its Marathon project.
For Selby at Canada Nickel, capital constraints will get relief as soon as the government funding announced in the first half of this year starts trickling in: “Once investors see that government are serious about supporting these projects with non-dilutive funding, then I think you’ll see a lot more investors crowded to the space.”
Considering the variety of stakeholders involved in scaling up this supply chain – from infrastructure and power to mining and processing companies, alongside First Nations, provincial and federal governments – some also think there might be a need for better coordination.
“Despite strong alignment on accelerating the development of Ontario critical minerals, several challenges that persist, including labour shortages in mining and processing, and craft labour capacity for peak demand (skilled trades). Midstream and downstream capacity need more innovation and coordination for refining, recycling and finished products, which are currently under-supported. Trust-building with Indigenous communities remains a work in progress and there are still environmental concerns around fast-tracking legislation among advocacy groups,” said Broderick, calling for a “master plan” to ensure Ontario makes the most of its resources, infrastructure and expertise.
This article was originally published in Energy and Mines Magazine (September 2025)
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