Jeremy Barretto is a partner at Cassels and serves as chair of the firm’s national regulatory law group.
Canada is currently well-positioned in the global race in supplying the battery metals that will underpin the energy transition and decarbonization.
In 2022, Bloomberg New Energy Finance released its annual battery metal supply chain ranking, with China topping the charts for the third consecutive time and Canada a close second. China currently dominates battery cell manufacturing as well. While Canada does lag in that field, it has an abundance of raw materials and environmental, social and robust governance (or ESG) standards, and recent government and private-sector investments in domestic battery manufacturing have given this country a boost.
But you don’t win a race by going slowly. And that’s what Canada is doing right now – it can take more than a decade to get a battery metals mine approved and built in this country. Our governments need to make urgent changes to the regulatory process so that we can win this global race for battery metals.
Compounding this problem of slow assessments is that the environment is an area of shared jurisdiction in Canada, resulting in the need, on occasion, for both federal and provincial approvals for mining projects.
For example, late last year the federal and Ontario governments approved Generation Mining Ltd.’s Marathon Palladium Copper Project, which will supply metals to the global automotive industry. It is a multiyear process started in 2012 by the project’s former owner, and completed nearly two years after the joint federal-provincial process was restarted in 2021 by Generation Mining. Even after receiving environmental assessment approvals, proponents must complete numerous conditions and additional engagement, and bear the associated costs.
Ottawa considering equity stakes, advancing loans to critical minerals companies
Ottawa vows to cut mining red tape as Canada risks falling behind in global critical minerals race
To its credit, the federal government’s recent Canadian Critical Minerals Strategy indicates that Ottawa is committed to meeting the objective of “one project, one assessment” for major development projects where both federal and provincial impact or environmental assessments are required. Canada also committed to work with other jurisdictions to reduce duplication, and increase efficiency and certainty in the regulatory process.
But there was little detail in the government’s strategy. How does Canada achieve these goals?
First, an environmental assessment’s deadline should result in a clearly defined sprint from the start to the finish. Currently, these time limits can be extended by decision makers, including by using requests for further information to “stop the clock” and delay decisions on project approvals. A key piece of accelerating environmental assessments is to ensure that statutory time limits are treated as maximums and not minimums: The assessment should be completed as quickly as possible instead of using the available time.
As well, in a race, you shouldn’t wait for the starting gun to fire in order to agree on a game plan. When both federal and provincial approvals are required for a mining project, even combining those reviews can come with its own delays; negotiation of an agreement for joint assessments can take more than a year. Instead of project-by-project joint agreements, federal and provincial governments can negotiate enhanced bilateral co-operation agreements that would be in place for every assessment. This approach is consistent with the federal and provincial governments’ past agreements harmonizing environmental assessments, and recent success in achieving child care and health care deals.
Lastly, governments must resolve legitimate historical concerns voiced by Indigenous communities that, while on first glance might seem unrelated, would be key to help streamline critical minerals approvals. If governments fail to address these pre-existing concerns, such as improving water infrastructure on reserve, then these issues will be considered during environmental assessments for mines. Increasingly, Indigenous communities are participating in mining-related environmental assessments as well as financially participating in projects, including through ownership of certain infrastructure associated with mines.
If Canada is serious about more rapidly developing critical minerals projects, then governments should also give serious consideration to whether a tailored process for critical minerals projects is necessary to accelerate multiyear reviews. Canada has already shown that it can customize assessment processes, specific to certain industries. For example, federal pipelines are predominantly regulated by the Canada Energy Regulator. Nuclear energy is regulated by the Canadian Nuclear Safety Commission.
Our federal and provincial governments must prioritize working in partnership together with Indigenous communities to expedite decision-making processes, and show the world how to expeditiously develop battery metals, while still maintaining stringent environmental standards. Canada can win the battery metals race if we put our foot on the accelerator pedal.