Madam Chair and members of the committee, thank you for the invitation to appear before you this afternoon.
I want to begin by recognizing that we are gathered today on the traditional and unceded territory of the Anishinabe Algonquin nation, and I acknowledge the hundreds of indigenous nations across Canada on whose traditional lands our industry operates and with which we have strong partnerships.
I'll begin by saying that I agree with much of what the previous witness spoke about. She set a nice overall global context for the situation in which Canada finds itself. I'm going to zero in specifically on the issue of value-added in the critical mineral space and provide just a bit more context to what that looks like at this current time.
Mining is foundational to Canada's economy. In 2024, our sector contributed some $111 billion to GDP and directly employed almost 440,000 people, with direct and indirect employment reaching 710,000 people. Our exports total $152 billion, representing 21% of Canada's exports. Our industry also remains the country's largest private sector employer of indigenous people on a proportional basis.
However, in inflation-adjusted terms, the mining sector's contribution to GDP has remained essentially unchanged in nearly two decades, while the broader Canadian economy has grown by one-third. We have lost momentum in the production and reserves of several important minerals. This is not a recent development. Between 2015 and 2024, copper production declined by 23%, nickel by 44% and iron ore by 6%. Proven and probable reserves of the most major base and precious metals have declined over the longer term, with zinc reserves down approximately 94% from their 1997 high.
The Government of Canada has established a strong policy foundation through successive budgets, the Canadian critical minerals strategy, investments in enabling infrastructure, and stronger partnerships with trusted allies to start to turn this around. More recently, measures such as the productivity mega deduction have been announced to help reverse this trajectory and support increased mining production.
We welcome these measures, but we must be clear about timelines. New policies do not translate into new output overnight. Given the lengthy development and construction timelines for mining projects, it will take several years before these results translate into increased production. At the same time, our processing capacity has been shrinking. Between 2016 and 2024, we experienced a net loss of seven non-ferrous metal and smelting refining facilities, including closures in Flin Flon, Thompson, the Gaspé, Bathurst and Timmins. Refined production of cobalt, copper, nickel and zinc has declined by 23%, 25%, 54% and 22% respectively over the past decade.
Each closure and decline represents processing capacity Canada no longer has. The market for global processing capacity is highly competitive. Capacity lost in Canada does not disappear from the market. It moves to jurisdictions that continue to invest in it, most notably China, which now controls most of the global refining in the world.
The result is a tight market. Canada's copper smelting and refining capacity is now concentrated, for example, in two aging capital-intensive facilities. If Canada wanted to build a new copper smelter today, we would largely need to draw on Chinese intellectual property and have the Chinese come and build it for us, because Canadian smelting technology has not meaningfully advanced in a century.
Canada's opportunity extends beyond exporting raw materials. As we seek to diversify our trade beyond the United States, our minerals and metals are globally traded commodities of growing strategic importance to allied economies. Expanding domestic processing lets Canada capture more of that value at home, but realizing this opportunity begins with producing more. Canadian smelters and refineries depend on a reliable supply of domestic feedstock. Without increased production from new mines and expansions at existing operations, we will struggle to preserve our current processing capacity, let alone grow it.
To turn Canada's mineral potential into reliable supply, we must focus on execution. This requires a competitive fiscal framework that mobilizes private capital, predictable and timely permitting and modern transportation, electricity and communications infrastructure, particularly in northern and remote regions. It also requires measures to preserve, modernize and expand Canada's domestic processing capacity.
Lastly, I just note that our reach extends well beyond what comes out of the ground. Our expertise, technology, equipment and services that support mining operations do so around the world, making Canada's mining supply and services sector the third largest globally. This is a competitive ecosystem that we can build on to increase production, expand domestic processing and grow our exports.
Thank you. I look forward to your questions.