Natural Resources Committee on Oct. 27th, 2025

[The Chair, Liberal, Terry Duguid]

Good afternoon, colleagues.

Let me call this meeting to order and start by acknowledging that we are on the unceded territory of the Algonquin Anishinabe nation.

Welcome to meeting number nine of the Standing Committee on Natural Resources.

Today's meeting is taking place in a hybrid format, pursuant to the Standing Orders.

I would like to make a few comments for the benefit of witnesses and members. For those participating by video conference—we have two witnesses joining us by that means today—click on the microphone icon to activate your mic, and please mute yourself when you are not speaking. Also, at the bottom of your screen, you can select the appropriate channel for interpretation: floor, English or French. Those in the room can use the earpiece and select the desired channel.

I will remind you that all comments should be addressed through the chair.

Pursuant to Standing Order 108(2) and the motion adopted on Thursday, September 18, 2025, the committee resumes its study of the development of critical minerals in Canada.

Let me welcome our witnesses on the first panel this afternoon. From the Helium Developers Association of Canada, we have Richard Dunn, executive director, who is joining us via Zoom; and Chris Bakker, co-chair, who is also joining us via Zoom. Joining us in person, from the Mining Association of Canada, we have Pierre Gratton, president and chief executive officer; and Photinie Koutsavlis, vice-president of economic affairs and climate change. Finally, from Vale Base Metals, we have Jeff Gaulin, vice-president of corporate affairs; and Spencer Page, manager, corporate affairs, U.K., EU, and international affairs. Spencer, you get around.

Each of you will have five minutes or less for your opening remarks.

Mr. Dunn, you have the floor for five minutes.

[Richard Dunn, Executive Director, Helium Developers Association of Canada]

Thank you, Chair.

Thank you, committee members, for the opportunity to address you today.

Helium is a critical mineral that is central to Canada's economic, defence and digital ambitions. However, the sector is at risk and requires targeted support.

Amending the Income Tax Act to designate helium as a mineral resource and make it eligible for standard tax measures would be the single most effective action the government can take. The case for supporting Canada's emerging helium sector is strong. As Heather Exner-Pirot noted in her presentation to the committee last week, worldwide demand for helium is growing, given its fundamental role in a range of high-tech applications, including semiconductor and fibre optic manufacturing, quantum computing, space flight, nuclear energy and MRIs.

Global economic development requires secure and resilient critical mineral supply chains. This is especially true now for helium, as growing Russian helium supplies are saturating the market and driving commodity prices down, while at the same time increasing end-user security of supply concerns.

Canada holds the world's fifth-largest estimated helium resource. Extracted from deep, relatively unexplored reservoirs in western Canada using world-class Canadian drilling expertise, helium development offers significant potential. Saskatchewan's plan alone targets supplying 10% of global demand, while generating thousands of jobs and hundreds of millions in annual investment. Manitoba and Alberta have significant helium opportunity as well.

However, Canada's helium sector, driven by entrepreneurial, small-cap Canadian companies, is struggling. Uncompetitive tax treatment, compared to what is provided for other critical minerals in Canada—notably helium's exclusion from standard depreciation schedules and from the flow-through shares program—is proving especially impactful in this low-price environment.

Exploration and development activity has slowed to a crawl. Investor confidence has fallen, and, increasingly, helium companies are looking to the U.S., given preferential tax treatment and investor sentiment. Meanwhile, domestic volumes remain too small to justify liquefaction facilities, so final processing of Canadian helium occurs in the U.S., further raising security of supply concerns amid growing U.S. helium demand, as well as ongoing trade tensions.

Competitive depreciation is a core tool in Canada's economic tool box to attract investment. However, helium is provided only a goodwill depreciation, which is the weakest depreciation category available. While other critical minerals are typically depreciated against taxes over a six-year period, helium projects are depreciated over a 40-year period. That is a major competitive disadvantage, and it is clearly unfair, given that helium projects typically have an operating life of under 15 years.

Helium is also excluded from Canada's proven flow-through shares program. Flow-through financing supports roughly 70% of Canadian mineral exploration and is specifically designed to help junior companies raise the capital needed for early-stage, grassroots exploration, which is precisely the support the helium sector needs. Without access to flow-through shares, risk capital has shunned helium, resulting in Canadian helium companies struggling to secure the funding needed to advance their opportunities.

Consistent with the precedent set in budget 2023 for lithium from brine, the straightforward solution is to amend the Income Tax Act to include helium as a defined mineral resource. The provinces of Manitoba, Saskatchewan and Alberta have all submitted multiple letters of support for the proposed tax measures for helium, recognizing the strategic importance of growing the sector, the modest investment that is shared between federal and provincial governments and the substantial value generated for governments and their citizens.

In closing, the Kananaskis G7 communiqué recognized that to strengthen and diversify critical mineral supplies, governments must remove barriers to investment and implement measures that reduce investor risk and attract private capital. Amending the Income Tax Act to designate helium as a mineral resource and make it eligible for standard tax measures will achieve those goals for Canada's helium sector. In doing so, it will unlock private investment, stimulate jobs and economic growth, enable domestic liquefaction, increase security of supply and position the sector as a reliable helium supplier for Canada and its allies.

Thank you. We look forward to your questions.

[The Chair, Liberal, Terry Duguid]

Thank you, Mr. Dunn.

Mr. Gratton, you have five minutes or less.

[Pierre Gratton, President and Chief Executive Officer, Mining Association of Canada]

Thank you, Mr. Chair.

I appreciate the opportunity to speak to you today about critical minerals.

I also want to begin by recognizing that we are gathered today on the traditional and unceded territory of the Anishinabe Algonquin nation and acknowledge the hundreds of indigenous nations across Canada on whose traditional lands our industry operates and with whom we have strong partnerships.

Before getting into specifics on critical minerals, it’s important to acknowledge the extraordinary circumstances we find ourselves in as an industry and country since the focus on opportunities related to critical minerals emerged just a few years ago. Around that time, during the first Trump administration in January 2020, the Canada-U.S. joint action plan on critical minerals was launched, with the goal of advancing “both countries' common interest in strengthening North American critical mineral production needed for defense, aerospace, clean energy, communications and other key industries.”

Today, the focus on Canada-U.S. collaboration on critical minerals has largely been displaced by the unprecedented attack on the rules-based order related to trade and to our North American partnership. U.S. tariffs have increased downward pressure on already declining investment, threatening key Canadian sectors.

While we are in a very different place in terms of our economic position, particularly in regard to our relationship with the United States, advancing Canadian critical—and all—mineral production is now even more of an imperative than it is an opportunity and essential to boosting economic resilience and diversifying Canada’s trade.

Adding to this urgency is the fact that Chinese influence over the global critical minerals market continues to deepen. Beyond earlier restrictions on gallium and germanium, China now imposes licensing requirements or selective bans on graphite products for battery anodes, antimony, tungsten, tellurium, bismuth, indium and several rare earth elements.

China also maintains roughly 85% to 90% of the world’s rare earth refining and separation capacity and dominates the production of rare earth magnets and other downstream components. It also has a large influence on commonly used metals like nickel and cobalt, through international investments in Indonesia, the DRC, Zambia and elsewhere. These actions highlight the strategic risk posed by China’s control of downstream processing. For Canada and its allies, this concentration underscores the urgent need to expand mining production and build and diversify refining, recycling and magnet-manufacturing capacity outside of China.

The good news is that Canada’s mining industry is already diversified in terms of trade and global outlook and ideally positioned to play a central role in recalibrating our economy and providing an anchor for diversified trade relationships to deliver long-term economic resilience and prosperity to our country.

I also want to underscore that while we are facing unprecedented actions by the United States in terms of tariffs on the Canadian economy, the minerals and metals sector has been largely untouched by these. Why? It is because the United States, notwithstanding its desire to shore up its manufacturing sector, needs our metals in order to do so.

We are also in a situation where we have a strong and rising demand for many mineral and metal products, and that demand is expected to increase in the decades to come.

We're also at a moment when there is unprecedentedly high public support for mining. In our most recent survey, we saw the largest percentage of Canadians being supportive of the mining sector that we have seen in the last 15 years of surveying Canadians, at 82% of public support. I also saw a recent survey that put mining at the top of a long list of sectors that gave Canadians confidence about the future.

I raise all of this because I honestly believe—and I said so before the Vancouver Board of Trade last week when I addressed them—that this is mining's moment. I think there is a coalescence of all sorts of factors that really lend themselves to a strong focus on building and growing our mining sector at this point in time.

The committee motion that launched this study also rightly referenced indigenous rights. Central to the ability of our sector to deliver for Canada, and more important than ever, will be the need to maintain responsible mineral production and prioritization of relationships with indigenous communities. This approach is fundamental to moving forward and cannot and will not be compromised, because we know that any attempt to do so, including rushing or circumventing the constitutional duty to consult, will only set us back.

To deliver for Canada, we need to retool, address declines in key areas and ensure that aspirations related to the mining industry and committed to in the recent election campaign are effectively implemented and delivered at the speed of business. Otherwise, investment and opportunity will go elsewhere.

What do we need to do? First—

[The Chair, Liberal, Terry Duguid]

I'm going to ask you to finish up, Mr. Gratton. There will be lots of opportunities with questions.

[Pierre Gratton]

Sure.

There are a few key issues that we want to share with you. The first is addressing the clean manufacturing investment tax credit. Many of you may be familiar with the copper threshold issue, because we've been talking about it for two years. The ITC needs to be amended, because our deposits are polymetallic. Setting a threshold at 90% critical mineral content is too high and won't stimulate new investment. You also need to expand the ITC to include other minerals and metals. The previous government focused only on battery metals. We need to expand it to defence.

Thank you.

[The Chair, Liberal, Terry Duguid]

Thank you, Mr. Gratton.

We're going to Monsieur Gaulin.

You have the floor for five minutes.

[Jeff Gaulin, Vice President, Corporate Affairs, Vale Base Metals Canada]

Good afternoon.

My name is Jeff Gaulin.

I'm vice president of corporate affairs for Vale Base Metals.

We provide mineral security to a world in transition. At Vale Base Metals, we are stewards of nickel, copper and cobalt reserves around the world. We are based in Canada, but we are also in Brazil and Indonesia. Our refineries here in Canada, as well as in the U.K. and Japan, serve our allies in Asia, in Europe and, yes, even in America. Our combination of geology and geography, grounded and centred here in Canada, allows us to deliver a reliable and responsible supply of minerals through today's global volatility to produce the products of the future.

From artificial intelligence and data centres to robotics and defence systems, as well as energy and telecommunications infrastructure, critical minerals are foundational to Canada's economic resilience, our national security and our global competitiveness. You can count on us to keep Canada secure, sovereign and sustainable.

In Canada, we employ more than 7,000 Canadians to explore, mine and refine critical minerals in Manitoba, Ontario and Newfoundland and Labrador. We operate the only fully integrated mining complex in all of North America. Our mineral abundance and our rich heritage in developing it responsibly makes Vale Base Metals a Canadian champion and a global connector in a fractured world. We are Canadian by choice.

Demand for critical minerals is growing exponentially in a world where price and supply volatility are now the norm. The International Energy Agency reports that demand for key minerals continues to surge. Supply for refined materials is highly concentrated in China, which is suppressing prices for minerals such as lithium, graphite and nickel. Projects face regulatory uncertainty. Trade agreements are under attack, and the threat of export restrictions is on the rise. In short, critical minerals are being weaponized.

In response, Canada can be a secure global supplier.

Canada's presidency of the G7 gives it a unique opportunity to expand markets such as Germany, as well as other EU countries, which today are reliant on minerals that originate in Russia and are refined in China. This is not simply a matter of finding a match between Canadian supply and global demand. I have been to London, Washington, Dubai, Brussels and Berlin to advocate for more Canadian access to those markets, but supply chains abroad are not going to change easily or quickly without change here at home. Building new supply relationships takes time, coordination and the sharpening of our competitiveness to make Canadian minerals more attractive to foreign markets.

I propose four recommendations for the committee's consideration.

One, position Canada as a supplier of choice for NATO. Canada should aggressively pursue NATO defence and adjacent infrastructure spending in exchange for preferential, long-term, secure and reliable access to critical minerals at a premium. Canada has applied to join the security action for Europe program, SAFE, which is basically the EU's defence procurement club. If accepted, Canada will join the U.K. as the only non-EU members of the club and will be the club's leading critical minerals producer. Canada could leverage such a membership by integrating Canadian minerals into SAFE's procurement. This would give Canada a competitive advantage to provide the EU with critical minerals, both for defence-related procurement and for strategic economic infrastructure such as LNG, pipelines, data centres and AI.

Two, increase the availability of capital. Canada should expand the eligibility criteria of the investment tax credits to make eligible mine development expenses to spur the investments that increase our mineral output fast. Canada should also work with G7 credit institutions, such as the U.K. Export Finance, to encourage the financing and use of Canadian critical minerals in our allies' supply chains. Canadian pension funds should be encouraged to invest more into Canadian natural resources, particularly critical minerals.

Three, elevate global standards. Canada should lead, through the G7 critical minerals production alliance, the implementation and enforcement of traceability standards. Canada should also get our allies to revisit the rules of origin to reflect the real risks of the minerals in their supply chains.

Four, secure a global workforce. Finally, Canada should compete for top global mining talent, for we are more likely to run out of miners than we are to run out of minerals. Naturally, we should develop a domestic workforce as best we can, but as a country we should also compete to recruit and retain the best in the world and turn the world's best miners into Canadians by choice. Priority review and recognition should be made for work visas and immigration applications within the critical minerals industry to support Canada rapidly becoming a more secure, sovereign and sustainable global supplier of choice. Becoming more competitive will speed our access to market. That is essential for Canada's prosperity, resilience and national security.

Critical minerals are not just valuable rocks. They are the bedrock of Canada's industrial, trade and defence strategies, now and for a generation.

Thank you.

[The Chair, Liberal, Terry Duguid]

Thank you, Mr. Gaulin.

Thank you all for your presentations and for your recommendations, which I know the committee will consider carefully.

We're going to go on to our first round of questions and comments.

We're going to start with Mrs. Stubbs for six minutes.

[Shannon Stubbs, Conservative, Lakeland, AB]

Thank you, Chair, and thank you to all of our witnesses for being here.

As always, there are too many questions and answers and too little time.

Richard Dunn, you have reinforced, mentioned and warned in some degree or another, as have all the witnesses, about Russia's growing helium supply. Of course, helium is one of Canada's critical minerals.

I wonder if you believe that the current federal government policy framework has done enough to ensure that Canada's allies are not dependent on authoritarian regimes for a critical mineral that is so essential to semiconductors, MRIs and other defence applications, given the inextricable link between resources and economic and national security and sovereignty in Canada.

[Richard Dunn]

Thank you for your question, MP Stubbs.

Certainly we think that much more needs to be done. As mentioned, in order to get the playing field level, we strongly recommend providing standard tax measures for helium in Canada to develop the resource. This, as I mentioned, is especially important in a time of a low-price environment when we see Russian helium saturating the market.

It's not just Canada or Canadian producers that see this imperative; it's our partners. It's our allies in Asia, for example. We're seeing Japanese companies getting very concerned about increasing reliance on Russian helium and the partnership that Russia has with China, which has potential for weaponization.

Whether it's Japan, Taiwan or Korea, there's significant helium use in semiconductor production. Japan, for example, has listed helium as a critical material for its semiconductor supply chain. Without helium, you don't make semiconductors. Of course, the implications there are enormous with respect to economies on the digital side and also for defence applications.

Absolutely, we are seeing increased Russian influence in low prices and concerns around supply security. To counter that, to build up a resilient Canadian supply chain in helium, we believe that the recommended tax measures—the fair tax parity, if you will—should be provided to helium. From there, we'll be a strong domestic supplier that's also able to supply our allies' needs, whether it's in Japan, the EU, etc.

[Shannon Stubbs, Conservative, Lakeland, AB]

Canada officially developing and being able to export its helium resources would certainly provide support to our allies in Europe and to countries like Japan and Taiwan, which counterbalance authoritarian, imperialist, hostile regimes in both of those regions.

I wonder if you also have a comment to make on the fact that all liquefaction facilities are currently based in the United States. Do you think that poses a strategic vulnerability for Canada?

[Richard Dunn]

Absolutely. Canadian production of helium is somewhat stalled at this point, given investor sentiment and the inability of companies to raise adverse capital. The helium is produced as a gas at local facilities. It's finished up as a liquefaction for use around the world for transport, etc.

Now, the limited scale of Canadian helium production, at this point, doesn't justify these central liquefaction facilities. There are facilities in the U.S.—Montana and Colorado, etc.—where all Canadian gas is sent for liquefaction.

This increases the operating costs, and once the helium gas is in the U.S. for liquefaction purposes, it's subject to restrictions in terms of coming back to Canada for Canada's helium needs. Is this a possibility? Well, with the trade tensions we've seen, absolutely. Also, helium consumption in the U.S. is dramatically increasing as a result of the repatriation of the chips—fab shops—and also the dramatically increased space flight.

What we see is that, where the U.S. likely is to become a net importer of helium within the next three to four years, once Canadian helium is in the U.S. for liquefaction, there's some risk that it won't actually be able to come back to Canada for Canadian needs.

[Shannon Stubbs, Conservative, Lakeland, AB]

I only have 30 seconds. I was going to invite Pierre and Jeff to comment quickly on the comparable differences between the complications of the permitting processes and the amount of time it takes to get a mine from concept to production here in Canada, importantly juxtaposed against Canada's biggest mining competitors around the world. Please answer if you have time. We may have another chance.

[The Chair, Liberal, Terry Duguid]

We'll come back to that.

[Shannon Stubbs, Conservative, Lakeland, AB]

Okay.

[The Chair, Liberal, Terry Duguid]

Mr. Malette will have the floor next for the CPC. I'm sure he'll be happy to ask that question or have folks respond.

We're on to Mr. Guay for six minutes.

[Claude Guay, Liberal, LaSalle—Émard—Verdun, QC]

Thank you very much, Mr. Chair.

Mr. Gaulin, the first question is for you. By the way, thank you very much for employing 7,000 Canadians.

You are a global corporation. When you're deploying capital within Vale, what would be the number one and number two things that would make Vale's board of directors or executive team deploy more capital in Canada? If you don't mind, would you answer both for mining and for refining and processing? I would be really interested.

[Jeff Gaulin]

Thank you for the question.

We operate seven mines in Canada and three refineries, including North America's only cobalt refinery.

The opportunity for Canada is that we are a safe, secure, rule-of-law jurisdiction. That's great. We have labour peace. We have infrastructure. We have talent.

However, as a mature industry—some our assets have been around in excess of 100 years—the cost of doing business is quite high. First, we have to look at our rate of return here versus elsewhere. Second, what is the time to get a project not only permitted but complete into market? The third is geopolitics. Once it's built, will you be able to keep and serve markets? I think there are elements of that where Canada could increase its competitiveness, but also elements where Canada is a global leader and globally competitive today.

[Claude Guay, Liberal, LaSalle—Émard—Verdun, QC]

Thank you very much.

Mr. Gratton, you represent the industry in general. As part of this study, the committee is trying to determine the type of infrastructure that your members need in order to access foreign markets.

Have your members made any requests of this nature regarding the infrastructure needed?

[Pierre Gratton]

I would say yes and no. It all depends on the type of company and where it's located. The companies that operate in northern Canada need all types of infrastructure, including power transmission lines, ports and roads. In Vancouver, they need a larger port system. The needs vary depending on the location of the different companies and their products. A gold mining company will find it easier to transport its products than a company that mines nickel, coal or iron.

It depends on many factors, but one thing is certain. Infrastructure and investment will be needed to mine in certain parts of Canada. In northwestern British Columbia, there are proposals to expand the power transmission system. This would allow for large‑scale copper projects to proceed. There are similar things in eastern Canada, so it varies greatly.

[Claude Guay, Liberal, LaSalle—Émard—Verdun, QC]

As you said, each mining company has different needs, depending on the location. As a government, how can we ensure that requests cover multiple mining operations at the same time and avoid proceeding on a case‑by‑case basis?

Bear in mind that there are a number of mining companies in the northwest, in Saskatchewan, in the Saguenay region of Quebec and in the Labrador Trough region. However, they don't seem to come to us as groups to ask for infrastructure. Each company has specific needs.

Do you have any suggestions for ways to combine all these requests to make it worthwhile for Canada to invest in helping a significant number of mining companies?

[Pierre Gratton]

Some of the regions that you listed have a high concentration of companies. The Labrador Trough region, northwestern British Columbia, Grays Bay in Nunavut and Ontario's Ring of Fire are examples of regions with needs. Your government's idea of the first and last mile is a good one. We expect to hear more about this around November 4.

This is an example of how companies can approach the government with concrete projects to help it meet their infrastructure needs.

[The Chair, Liberal, Terry Duguid]

You have just 10 seconds.

[Claude Guay, Liberal, LaSalle—Émard—Verdun, QC]

Thank you very much.