This article was published by the International Energy Agency on Feb. 4, 2026.
By Milosz Karpinski, Energy Analyst
Eléonore Carré, Junior Energy Security Analyst
Already a mining hub, Canada could play a big part in diversifying global mineral supply chains
Since 2023, the IEA has been conducting Critical Mineral Reviews – in-depth country reviews of critical mineral policies and security that have served as part of the Agency’s pioneering work to ensure secure mineral supply chains. The latest Critical Minerals Review of Canada shows that at a time of increasing concentration risks, including from export controls by the dominant supplier, Canada has the potential to contribute to the development of secure, diversified and competitive global supply chains for critical minerals.
Canada can serve as a major supplier of key critical minerals. It has abundant reserves of many of the critical minerals necessary for energy technologies; a well-developed, stable regulatory framework, including strong environmental, social and governance standards; and it is investing throughout the value chain, from midstream refining and processing to downstream manufacturing sectors. This sets Canada apart from many other countries, which typically have only part of the critical minerals value chain within their jurisdictions. Access to low-emissions energy sources such as hydro and nuclear power can also serve as a competitive advantage in the development of its critical minerals sector.
Canada’s slate of existing and announced projects could enhance its role as a major global supplier of nickel, lithium, graphite, cobalt and rare earth elements. Mining of copper, cobalt, lithium, nickel and graphite is already widespread across several provinces and territories, with 56 active projects in 2024 – and Canada already covers, or aims to cover, multiple stages of the supply chain domestically. It also has the potential to significantly scale up production capacity. Canada’s lithium reserves, for instance, could supply around half of cumulative global demand from 2030 to 2050.
Canada, which hosts about half of the world’s publicly listed mining and exploration companies, is already a major centre for the global mining industry. Though mineral mining takes place in every province and territory, British Columbia, Ontario, Quebec and Saskatchewan account for about three-quarters of total exploration spending domestically and 85% of total capital expenditure. Large urban cities such as Toronto and Vancouver are also recognised as global hubs for mining and mineral exploration, financing and corporate services.
The manufacturing of technologies that use critical minerals is gaining momentum, but challenges remain
The IEA’s Review found that Canada also has the strong potential to grow its manufacturing base for renewable energy technologies, batteries and battery components, and other strategic applications, underpinned by its abundant low-emissions power and critical mineral resources. Since 2020, Canada has attracted large-scale investments in electric vehicle and battery supply chains from a range of foreign companies, including NextStar Energy, LGES-Stellantis joint venture, Volkswagen/PowerCo, Ultium CAM, GM-POSCO joint venture, EcoPro BM, and Solus Advanced Materials/Volta Energy Solutions Canada. However, not all of these projects have been realised. In September 2025, the Quebec government also announced that it was ending funding for the Northvolt battery manufacturing facility after the collapse of its parent company in Sweden.
Developing Canada’s capacity to manufacture technologies that use critical minerals requires overcoming challenges such as infrastructure gaps, high capital costs and competition from established producers. Stronger international cooperation resulting in commitments on the sustainable development of minerals could be a key enabler, supporting Canada’s international competitiveness in these sectors.
Additionally, while domestic production is set to help meet demand for some minerals, such as mined nickel, further progress is needed to serve requirements for others as the country builds its downstream technology value chain. The continued participation of global companies in Canada’s domestic critical minerals ecosystem is essential for the country to further grow its role in these supply chains globally.
Critical mineral supply chains can provide jobs and economic opportunities for local communities if skills gaps are addressed
Canada’s mining and services sector accounts for over 300 000 jobs, but the labour market for critical minerals is tight and demand for skilled workers is increasing while the current workforce is ageing. The country’s critical minerals sector accounts for over 110 000 direct and indirect jobs, with a half in extraction, processing and related services.
Due to declining enrolment in mining-related post-secondary education, the talent pipeline is shrinking. Mining-related jobs in rural and remote areas may not be attractive to younger workers, and there have been challenges in recruiting and retaining workers from underrepresented communities. Canadian industry estimates that the mining sector will need to hire between 100 000 and 220 000 employees by 2033 to replace retirees and fill new positions to meet baseline production targets.
Several Canadian initiatives aim to help institutions and employers train and reskill workers to meet growing demand driven by the expansion of the critical minerals sector, including the Sectoral Workforce Solutions Program, the Indigenous Skills and Employment Training Program, and the Skills and Partnership Fund. These programmes support efforts to anticipate future skills requirements, including by developing targeted skills trainings for workers. Partnership opportunities with provinces and territories, Indigenous-led organisations, and other stakeholders, including universities, colleges and specialised training institutions, are underway to create greater awareness and understanding of the minerals and metals sector, or what sometimes called “mineral literacy.”
Public funding programmes play a crucial role in strengthening Canada’s critical minerals sector
To develop the full critical mineral value chain in Canada, providing public financing using a variety of policy tools remains crucial.
Canada’s Critical Minerals Strategy, launched in 2022, has been supported by nearly CAD 4 billion1 in public funding, covering multiple stages of the value chain, from geoscience and exploration to mineral processing, manufacturing and recycling. This includes support for infrastructure, research and development (R&D), technological deployment, and international collaborations, including through the Strategic Innovation Fund and the Critical Minerals Infrastructure Fund. In addition, Canada offers a range of tax and non-tax incentives to bolster the development of domestic mining and processing, such as the Flow-Through Shares (FTS) and Mineral Exploration Tax Credit initiatives, as well as investment tax credits to support investments in mining, processing, recycling and downstream manufacturing. Several provinces also provide complementary or independent initiatives alongside federal programmes.
Canada’s federal budget for the 2026 cycle proposes to create the First and Last Mile Fund, which would absorb the Critical Minerals Infrastructure Fund and leverage existing funding to provide up to CAD 1.5 billion in support through to the 2029-30 fiscal year. The recent budget also proposes to create a CAD 2 billion Critical Minerals Sovereign Fund, which would make strategic investments in critical minerals projects and companies, including equity investments, loan guarantees and supply agreements.
Enhancing alignment among federal, provincial and Indigenous authorities will be key to unlocking Canada’s critical mineral potential
Canada boasts a highly organised administrative structure that oversees the entire critical minerals value chain in the country. Multiple government agencies are responsible for critical minerals policies, including Natural Resources Canada; Innovation, Science and Economic Development Canada; Department of National Defence; Department of Finance Canada; Global Affairs Canada; and Environment and Climate Change Canada.
However, the status of Canada as a federal state creates some natural complexities. For example, mining activities fall under the jurisdiction of provincial and territorial governments, each with their own specific laws and regulations. While certain responsibilities are shared between the federal government and provinces and territories, each jurisdiction may have distinct mining, environmental, and occupational, health and safety legislation and regulations.
In addition, Indigenous Peoples in Canada are rights-holders with constitutionally protected rights and title, supported by diverse and continually evolving governance systems. Many Indigenous Peoples have surface and/or sub-surface rights based on traditional use and occupancy, which may also be codified through treaties and other instruments, and their active participation is essential to the development of critical mineral projects. Respectful engagement and ongoing partnership with Indigenous authorities not only upholds legal obligations but also contributes to long-term project success, social licence to operate and inclusive economic development.
Companies must comply with federal, provincial, territorial and Indigenous governance frameworks. While this system reflects Canada’s commitment to inclusive and responsible resource development, it can appear complex from the perspective of industry and investors. To address this, the federal government has established the Major Projects Office to streamline regulatory approvals and coordinate financing for projects of national interest – including those in the critical minerals sector. By adopting a “one project, one review” approach through collaboration with provinces and territories, with a commitment to a two-year regulatory review window for projects of national interest, the Office is designed to drive transformative change in Canada’s regulatory and decision-making process, strengthening investor confidence in Canada’s critical minerals industry.
Recycling could add to Canada’s critical minerals output
Canada’s Critical Minerals Strategy aims to advance circular solutions and enhance access to, and the recovery of, minerals and metals contained in alternative sources. These include mining and industrial waste, by-product streams, and post-consumer scrap, supported by robust recycling infrastructure and secondary supply markets. According to estimates from Natural Resources Canada, by 2035, recycled lithium, nickel and cobalt could meet approximately 5-10% of the demand for EV battery production in Canadian factories.
While Canada lacks a standalone strategy dedicated to critical minerals recovery, circular economy approaches, including through recycling and reprocessing, feature prominently among federal funding and support programmes.
Canada is leading efforts on international collaboration to secure critical minerals supply chains
Canada is leveraging its leadership in the critical minerals sector to build international partnerships through various channels. A Critical Minerals Action Plan was one of the key outcomes of the G7 Leaders’ Summit under Canada’s G7 Presidency, committing G7 countries to actions on building standards-based markets, mobilising capital, investing in partnerships and promoting innovation. As part of G7 activities, the Canadian government also led efforts to deliver a Roadmap to Promote Standards-Based Markets for Critical Minerals and to set up a Critical Minerals Production Alliance to identify and support strategic minerals projects. At the G7 Energy and Environment Ministers’ Meeting in Toronto in October 2025, Canada announced 26 new investments, partnerships and measures to accelerate and unlock CAD 6.4 billion of critical minerals projects under the Critical Minerals Production Alliance.
Canada is also a key and active partner of the IEA’s Critical Minerals Security Programme, which supports countries as they work to strengthen their resilience against potential disruptions and diversify their mineral supply chains.
Together with Canada’s longstanding mining expertise, innovation capabilities and strong commitment to sustainable and responsible development, this leadership not only supports the country’s economic development and security, but also positions Canada as a leading global contributor to the expansion of responsibly produced critical minerals.
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