Critical minerals are essential to the industries that drive our economy. They are vital to our everyday lives, from mobile phones to solar panels, and electric vehicle batteries to medical and healthcare devices. Global demand for critical minerals is skyrocketing and Canada is well-positioned to leverage its natural resources to be a leader in this space.
The Government of Canada is committed to supporting a strong domestic critical minerals ecosystem, and for Canada to become a vital part of this growing global industry. To support the implementation of the Canadian Critical Minerals Strategy, Budget 2022 proposed $1.5 billion in targeted funds for the development of critical minerals projects supported through the Strategic Innovation Fund (SIF). These funds aim to prioritize innovative critical minerals projects with manufacturing, processing, and recycling applications.
To maximize the benefits for Canadians from the investments made in the critical minerals industry, projects must:
- target 1 or more of the 31 minerals Canada has identified as "critical", with priority given to the 6 most significant minerals: lithium, graphite, nickel, cobalt, copper, and rare earth elements
- promote the integration of multiple segments of the critical minerals value chain, including the processing, refining, materials manufacturing, recycling, and reuse of critical minerals in Canada
- add value to Canada's natural resources by developing highly-innovative projects that grow Canada's critical mineral industries, such as the integration of first-in-class technologies or development of new processing capacity
- strengthen Canada's competitive position in critical minerals markets with investments to develop new industrial capacity to produce the materials needed for strategic manufacturing sectors, including automotive and digital communication industries
- align with 1 or more of the areas of focus for critical minerals investment, while ensuring connections into value chains with high potential for national integration
- demonstrate the financial and technical capability needed to successfully complete the project, including appropriate financial statements, engineering design, and feasibility studies
Areas of focus for critical minerals investments
Critical minerals projects selected for investment will be expected to develop a greener and more competitive economy through the development of critical minerals projects supporting 1 or more of the following focus areas:
Clean technologies, including batteries and zero-emission vehicles (ZEVs)
Under this focus area, investments will support the critical minerals and materials required to manufacture technologies necessary for clean power generation, energy transmission and storage, zero emissions vehicles (ZEVs), and any product that reduces negative environmental impacts through efficiency improvements or sustainable resource use. This focus area will assist Canada in achieving its 2030 and 2050 climate goals.
Under this focus area, investments will support production of the critical minerals and materials required to manufacture the technologies required for clean power generation, energy transmission and storage, ZEVs, and products that reduce environmental impacts through energy efficiency improvements or more sustainable resource use. This focus area will assist Canada in achieving its 2030 and 2050 climate goals.
Investment considerations for clean technologies include:
- projects that grow Canada's capacity to support the global transition to net-zero
- investments towards the 6 critical mineral supply chains prioritized in the Canadian Critical Minerals Strategy
- the processing, manufacturing, and recycling of critical minerals for sectors that hold significant potential to support clean growth, including:
- electric vehicle batteries and permanent magnets
- clean energy systems, such as wind turbines and thin-film solar panels
Under this focus area, investments will expand the production of new materials, advanced alloys, and other critical mineral inputs needed to grow Canada's strategic manufacturing capacity, including support for industrial productivity, product innovation and mineral circularity (recycling, reusing and recapturing of minerals). These value-added investments, focused on the processing and production of manufacturing inputs, are expected to support economic diversification by attracting new industries, creating high-quality job opportunities, and increasing Canada's international exports.
Investment considerations for advanced manufacturing include:
- prioritization of the domestic processing and recycling of critical minerals that add value to Canada's economy and are needed across strategic manufacturing sectors, including automotive, aerospace, defence, and healthcare
- production of the innovative materials and industrial inputs required to create new products and technologies, enhance manufacturing processes, and enable more efficient, sustainable, and cost-effective ways of working
Information and communications technologies (ICTs) and semiconductors
Under this focus area, the investments will support the production of the advanced materials necessary for the development and modernization of ICTs and semiconductor value chains. These value chains power a broad range of advanced technologies that are essential for today's society. The funding for ICTs and semiconductor projects will support the critical minerals processing, recycling and materials manufacturing required to produce the inputs needed to grow Canada's digital economy.
Investment considerations for ICTs and semiconductors include:
- a focus on projects that produce the critical minerals inputs required to develop next-generation ICT infrastructure
- targeting opportunities to grow niche areas within the semiconductor value chain, including high-purity materials and the inputs required for the manufacturing of sensors and microelectromechanical systems, as well as compound semiconductors
- development of critical minerals processing and materials manufacturing capacity to incentivize manufacturing industries that require the integration of new digital technologies, including:
Project Prioritization Criteria
Projects will undergo a comprehensive evaluation to ensure their alignment with specific prioritization criteria. The evaluation includes the following factors:
- support for domestic value chains: creating integrated supply chains in Canada by connecting upstream resources with mid- and downstream processing, manufacturing, and recycling activities
- net-new industrial capabilities: developing new critical minerals capabilities in Canada without offsetting losses ('net-new')
- significant private sector interest: funding should work alongside private sector investments
- advanced stage projects: prioritizing projects that have undergone sufficient front-end engineering design to demonstrate strong project viability
- supporting circularity and enhancing supply security: increasing production of critical minerals in Canada by utilizing waste sources from industries and by recycling end-of-life consumer products
- strategic to Canada and its key partners: strengthening Canada's industrial sectors by developing new processing, materials manufacturing, and recycling capabilities for critical mineral supply chains that are highly concentrated in international markets
Our investment decisions will also be guided by the following considerations:
- maximize project value: ensuring project viability by bringing together funding partners from a range of public and private investors
- collaborative funding approach: working with provincial and territorial governments, Canadian industry, Indigenous groups and, where appropriate, other governments to support the development of Canadian critical mineral value chains
- optimize funding contributions: exploring all available funding tools to reduce risk associated with highly-innovative projects, and make efficient use of available supports across federal programs
Interested in applying?
Follow the instructions online on how to apply to SIF.
Before applying, SIF offers the opportunity to meet with you for a consultation where you will be invited to present your project. During this consultation process, we will provide you with guidance on how your project may align with the program's critical minerals investment priorities.
You will be able to showcase your project by describing:
- project activities, including its location, scope, supply chain integration, timeline to commercial operations, and costs
- project planning, including any feasibility studies, engineering design, and associated infrastructure requirements, such as road, rail, and grid connections
- how your project aligns with the Canadian Critical Minerals Strategy
- how your project integrates innovative technologies or processes (such as developing intellectual property, new materials or products, or starting first-commercial deployments or adoption of new technologies in Canada)
- what benefits your project will bring to Canada
- information about the current stage of development of a project, including the level of secured financing, signed supplier agreements, industrial or technology partners, and other government support
This consultation will help to ensure your organization is prepared to complete the other steps in the application stage of the process.
Investment tax credits
Budget 2023 contained a range of initiatives geared towards building a clean and prosperous economy of the future. Among these initiatives is a series of Investment Tax Credits (ITCs), presented in Chapter 3: A Made-In-Canada Plan: Affordable Energy, Good Jobs, and a Growing Clean Economy. The ITCs are for investments made towards strengthening Canada's competitiveness in global clean economies and accelerating the transition to net-zero. ITCs range in support from 15% to 60% and may be applied to specific investments into clean electricity, clean hydrogen, clean technology adoption, clean technology manufacturing, and carbon capture utilization, and storage.
Once you apply to SIF for a critical minerals project, you will be asked to calculate the estimated impact of the ITCs for your project. For SIF to assess your project application, you must share your results and the methodology of your calculations. SIF will also factor in any direct assistance provided by other programs and financial institutions, including provincial programs, as it relates to the scope of the project.