2023 federal budget cements 'industrial policy' for critical minerals

The federal budget tabled by Finance Minister Chrystia Freeland builds on the critical minerals strategy announced in December, experts say.

Measures in Tuesday’s federal budget aimed at bolstering government’s critical minerals strategy are potentially valuable to B.C.-based exploration firm FPX Nickel Corp.

FPX is just working on pre-feasibility engineering for a possible nickel mine on its Baptiste claim, 60 kilometres northwest of Fort St. James, and is perhaps a year away from submitting an application for environmental assessment, said CEO Martin Turenne.

The federal budget’s introduction of a 30-per-cent clean technology manufacturing tax credit that would apply to the purchase of equipment used in mining critical minerals would help the company’s financial picture, Turenne said.

“That’s something that could have a real significant and positive impact on the economics of a project like ours.”

Nickel is one of 50 so-called critical minerals, elements that are important to the development of renewable energy, battery technology and electronics for the transition away from fossil fuels that were highlighted in a federal mining strategy unveiled by Natural Resources Minister Jonathan Wilkinson last December.

FPX has already seen benefits from that critical minerals strategy as recipient of $725,000 from a federal research, development and demonstration fund, which Turenne said helped raise the profile of the company’s still preliminary proposal.

Generally, Turenne characterized the additional budget measures revealed Tuesday as incremental to what Wilkinson announced last December, but other mining advocates still view them as important.

“The centrepiece is that clean technology manufacturing tax credit,” said Michael Goehring, CEO of the Mining Association of B.C. “That is very helpful and should serve to help eligible miners in British Columbia and Canada to attract investment in projects.”

“We now have federal industrial policy (for critical minerals),” Goehring said. “That’s what it is.”

To Goehring, the other important initiative unveiled by Finance Minister Chrystia Freeland on Tuesday was a 15-per-cent tax credit for investors in renewable electricity.

That is a measure aimed at increasing the amount of renewable power on Canada’s electrical grid and create incentives to strengthen power interprovincial power transmission, but Goehring said clean power is an important consideration for proposed mines.

In addition, the critical minerals strategy that Wilkinson outlined last December included a commitment to expediting the permitting process for new mines in the critical-mineral category, and the budget called for an effort to have a structure to do that by the end of 2023.

Goehring said B.C. already has an agreement, signed in 2019, establishing a single environmental assessment for both provincial and federal decision-making processes. The budget, however, will require the principle to be extended across the country.

One area where Goehring said the mining sector would like to see more done is on the assistance being offered to Indigenous communities to participate in environmental assessments and development of mining projects.

The critical minerals strategy offered support to First Nations that want to acquire equity stakes in mining projects, which has “opened the door to this,” but B.C. and Canada need to increase support to build the technical capacity of Indigenous communities.

“So they can engage with government and industry on a more level playing field,” Goehring said.

The next mine to be built in B.C. will be primarily a gold mine, and the next two proposals closest to approval are also precious-metals focused mineral deposits that won’t qualify for critical minerals benefits, although they will be a big boost to B.C.’s economy.

However, there are another four development projects that will be next in line for either environmental approval or final investments that are focused on critical minerals including copper, nickel and the rare-earth element niobium, Goehring added.

“On the whole, the federal budget  recognizes the strategic importance of critical minerals and the measures in the budget strengthen B.C.’s and Canada’s ability to build a strong critical mineral supply chain in Canada and across North America,” Goehring said.

1. 

   $1.4B gold-and-silver mine to start construction in B.C., one of few metals mines in a decade

2. 

   This Week in History, 1858: "Gold discovery confirmed" on "Frazer's River" by American newspaper, setting off Fraser River Gold Rush

depenner@postmedia.com

twitter.com/derrickpenner