National Defence Committee on Feb. 23rd, 2026

[The Chair, Liberal, Charles Sousa]

Good morning, everyone.

I call the meeting to order.

Welcome to meeting number 25 of the House of Commons Standing Committee on National Defence.

Monsieur Savard-Tremblay, I'm happy to see you all nice and healthy and safe at home. We're very sorry about what took place. It's very traumatic.

I'd also like to welcome a few new members who are here replacing a few others who aren't able to be here today—thank you.

We do have our witnesses before us.

I know we have a number of motions that we wish to address. I've spoken to the vice-chair. We're going to save a little part of the tail end of our meeting to try to manage through the motions. There's also other business that I want to relate in a short while in regard to some travel that's coming forward, as well as some other issues that have taken place that I think you should all be aware of.

Pursuant to Standing Order 108(2) and the motion adopted by the committee on Tuesday, September 16, 2025, the committee is meeting to resume its consideration of the nexus between national defence, national security and the critical minerals sector.

Today's meeting is taking place in a hybrid format, pursuant to the Standing Orders. Members are attending in person and remotely using the Zoom application.

Before we continue, I ask participants to consult the guidelines on the table. These measures are to help prevent audio feedback incidents and to protect the health and safety of our interpreters.

I'd like to remind the witnesses and the members to please wait until I recognize them by name before speaking. If you wish to speak, please raise your hand. For those on Zoom, use the “raise hand” function. The clerk and I will manage the speaking order as best we can. For interpretation, please use your earpiece. If you're on Zoom, use the respective channel.

Again, all comments should be addressed through the chair.

I'd like to welcome our witnesses.

We have Hudson Lester, Nunavut general manager with the NWT and Nunavut Chamber of Mines. He is joining us via video conference. We have Jeff Gaulin, vice-president of corporate affairs with Vale Base Metals. We have Photinie Koutsavlis, vice-president of economic affairs and climate change with the Mining Association of Canada. We also have Michael Gullo, vice-president of policy with the Business Council of Canada.

I do apologize, but please repeat your names when you speak. That way, we all will have an idea of who you are.

I'll proceed with the witnesses' opening statements. You have up to five minutes.

Mr. Lester, why don't we start with you?

[Hudson Lester, General Manager, Nunavut, NWT and Nunavut Chamber of Mines]

Thank you, Mr. Chair.

I'm coming to you from Iqaluit, Nunavut, speaking on behalf of the Chamber of Mines today.

From a chamber perspective, Canada's critical minerals strategy aligns with Arctic sovereignty and defence readiness. The same infrastructure that enables mining, ports, roads, power systems, air access and communications is what allows Canada to operate securely in the north.

Energy security in Nunavut is national security. The chamber supports responsible investment, but in critical minerals, Canada must look beyond simple ownership to long-term control through offtake agreements, financing structures and logistics. If Canada wants to be a reliable supplier to our allies, including NATO, then northern projects must be supported by year-round infrastructure and domestic or allied processing capacity. Trusted ally collaboration should strengthen Canadian sovereignty, Inuit partnerships and northern capacity, not shift strategic leverage offshore.

That's my opening. Thank you, Mr. Chair.

[The Chair, Liberal, Charles Sousa]

Thank you very much, Mr. Lester.

Photinie Koutsavlis, it's over to you. Please state your name properly.

[Photinie Koutsavlis, Vice-President, Economic Affairs and Climate Change, Mining Association of Canada]

Thank you, Mr. Chair. My name is Photinie Koutsavlis. I'm from the Mining Association of Canada.

Members of the committee, thank you so much for the invitation to appear before you today.

Canada produces critical minerals for a wide range of purposes that underpin both our economy and our national security. These materials are foundational to energy systems, transportation, advanced manufacturing, digital infrastructure, clean technologies, and defence and security-related applications. Canada produces more than 60 minerals and metals. It is a top global producer of uranium, potash, nickel, aluminum, palladium and gold, with world-class potential in copper, graphite, lithium, rare earth elements, tungsten and niobium.

The mining sector is already a major economic pillar. It contributed approximately $117 billion to GDP in 2023 and generated $151 billion in exports, and it directly and indirectly employs more than 700,000 Canadians. We also remain the country's largest private sector employer of indigenous people on a proportional basis. Canadian capital markets list roughly 40% of the world's mining companies, making Canada a global hub for mining finance and expertise. This scale matters, because critical minerals are not a niche issue. They are central to economic resilience, industrial competitiveness and national security.

The challenge Canada faces is not a lack of critical mineral resources; it is a concentration risk and an execution risk. Globally, supply chains for many critical minerals remain highly concentrated, particularly in processing and refining. China controls roughly 85% to 90% of global rare earth refining and magnet production, and has expanded export controls and licensing requirements across a growing list of critical minerals. These trends create real vulnerabilities for advanced economies and have sharpened the focus on secure, diversified supply from trusted jurisdictions, reinforcing the importance of strengthening Canada's defence industrial base and its ability to support allied requirements through secure domestic supply chains.

Canada is well positioned to respond, but production and processing trends highlight the need for action. Despite the breadth of Canada's mineral endowment, production of several key commodities critical to defence and advanced manufacturing has declined over the past decade. That includes copper, down roughly 20%, and nickel, down more than 30%.

At the same time, Canada has lost multiple smelting and refining facilities. Despite operating processing facilities across eight provinces, refined output for several key metals is lower than a decade ago, reducing domestic feedstock availability. This matters, because many defence-related critical minerals are recovered through smelting and refining processes, often as co-products, rather than produced directly at the mine.

Budget 2025 represents the most significant effort to date to reverse these trends. It introduces key tools to unlock investment, including the $2-billion critical minerals sovereign fund, the first and last mile fund, expanded exploration tax credits, and changes to the clean technology manufacturing investment tax credit that better reflect Canada's polymetallic geology and support near-term copper projects, alongside funding to support critical minerals processing, allied investment and the development of a stockpiling mechanism. Budget 2025 also supports dual-use infrastructure in northern and remote regions, strengthening logistics and supply chains that serve both economic and security objectives.

Key design and implementation issues do remain. For example, the investment tax credit is of minimal value to brownfield expansions, because qualifying expenses are much reduced at an existing mine site. Including underground development and other Canadian development expenses would be one of the most effective ways to boost near-term output, as these projects already have permits, community and indigenous support, and existing infrastructure, reducing cost and risk. Sudbury is a good example of this. MP Lapointe will be very familiar with that reality.

At the same time, stronger support for earlier stages of the mining cycle is needed to prevent promising discoveries from becoming orphaned projects. Expanding the Canadian exploration expense to cover technical and feasibility studies would help de-risk early-stage projects and strengthen the pipeline of future mines, as these studies are essential, costly and often a barrier to advancing otherwise viable projects.

Secure access to critical minerals is ultimately a national security issue, and it depends not just on stockpiling, but on sustained production, processing capacity, infrastructure and trusted partnerships over time. International co-operation can add real value when it helps reduce concentration risks and bring projects into production.

The G7 critical minerals production alliance holds significant promise and is already moving from concept to execution. Through Canada's G7 presidency, the alliance has begun operationalizing projects by coordinating public and private capital, securing offtake arrangements and reducing concentration risks across trusted partners.

In closing, delivery will determine success. Programs must operate at the speed of business. Permitting timelines must continue to improve, and companies need clarity and predictability to support multidecade investments. International initiatives can reinforce this effort, but they cannot substitute for effective domestic policy and program implementation.

The priority now is execution: implementing budget 2025 measures quickly, accelerating project approval, strengthening infrastructure and translating policy intent into real production. If Canada gets this right, it could strengthen economic resilience and support national security objectives.

Thank you. I look forward to your questions.

[The Chair, Liberal, Charles Sousa]

Thank you very much.

Mr. Gullo, why don't we go to you for five minutes?

[Michael Gullo, Vice-President, Policy, Business Council of Canada]

It's a pleasure to be with you this morning.

As the chair has pointed out, my name is Michael Gullo. I'm the vice-president of policy at the Business Council of Canada.

The Business Council of Canada is composed of 170 chief executives and entrepreneurs of Canada's leading enterprises. Founded in 1976, our mandate is to make Canada the best country in the world in which to live, work, invest and grow.

Before I table my remarks, I would like to congratulate the federal government on tabling its inaugural defence industrial strategy. Many elements of it reflect the recommendations from our 2024 report, “Security and Prosperity”.

Now, here are my remarks.

As you know, Canada is facing a lot of headwinds. Productivity challenges and low levels of business investment persist, and we've lost global market share in many important resources, including critical minerals. At the same time, we know this is a world poised for growth. Rising populations and the rapid growth of the global middle class are creating strong demands for energy and resources, while national security and clean energy applications are driving global demand for critical minerals.

Canada has much to offer, and we know that our allies and trading partners are looking for stable suppliers. Being rich in resources is one thing, but we need structural changes to translate our trade ambitions into action.

This is why the council wrote “Selling to our strengths” last year. It's a road map for leveraging Canada's resources at a time of global uncertainty. Our report calls for a whole-of-government approach to unlock Canada's immense potential and to position the country as a reliable supplier of energy and critical minerals. In an era when the weaponization of resources and supply chains is becoming more commonplace, Canada should seize the moment to trade more with its allies who prioritize national security and responsible resource development.

Our view is that Canada can be a primary supplier of critical minerals to NATO allies. Risks to mineral supply chains are increasing due to foreign price manipulation, export controls, rising military demands and limited inventories. NATO partners are currently overreliant on China's market dominance and powerful ability to exert export controls over inputs necessary for national defence purposes.

As geopolitical tensions escalate, NATO members require a concerted strategy to secure their supply of critical minerals for national security. Canada is home to 12 of the critical minerals listed by NATO, and 10 of the 12 are produced and refined within our country. Canada's mastery of sustainable mining production and finance, stable governance structure and understanding of global markets can position it as an important supplier to NATO allies. As a founding signatory to NATO, we argue that the Canadian government, in co-operation with the private sector, should create a critical mineral reserve for niche metals vital to defence purposes and where there is fragility in supply and market mechanisms.

While Canada holds promise and potential, much work remains to be done to overcome the challenges it faces to develop its resources and move them to market. I offer three recommendations for consideration.

The first is that we require a new vision for how we move our goods to market: 60% of Canada's GDP is reliant on trade, but investments in infrastructure on a per capita basis in Canada lag behind those of our peer countries like Australia and Sweden. We require a national trade infrastructure strategy that brings together all levels of government and the private sector so that we can turn our trade ambition into action through higher levels of investment.

However, we also need to ensure that our supply chains remain responsive to the needs of our customers, those we have now and those we want in the future. As a case in point, Canada experienced 62 work stoppages in the transportation sector alone in 2023 and 2024, involving close to 20,000 workers. Another important point is that Canada is among the worst in the OECD in days lost to labour disruptions. These are difficult stats to come to grips with in a world that expects to receive our goods in a timely and reliable manner.

We also need to ramp up our ability to identify, approve and produce critical mineral projects. Canada is home to the workers, businesses and communities that know how to explore, extract and process critical minerals at scale. We are encouraged at the moment to see governments across the country come together to develop mutual recognition agreements that advance resource and mining projects through “one project, one assessment”.

However, our challenges remain significant. Canada has the third-longest lead time in the world for mining projects, according to a recent report released by S&P Global. Smelting and refining are essential for supply chain resilience and independence, but many of our approval processes pre-empt new builds or even expansions and upgrades.

Canada’s private sector also faces unfair competition from foreign producers that benefit from an intentional, state-directed policy of overcapacity and oversupply, as well as a lack of rigorous labour and environmental standards. In our view, a project deemed to be essential to Canada and its allies' national security interests should benefit from regulatory excellence, including streamlined approval and permitting.

My third point is about the importance of seizing the moment to unlock Canadian innovation. Leveraging our critical minerals and resources can create generational opportunity to drive technological progress and go beyond exporting raw and unprocessed commodities. However, Canada's innovation policy requires a shot in the arm. Our investments in research and development are among the lowest in the OECD, and our research often falls short of commercialization.

Another case in point is that we have less than 1.5% of global patent filings. In the mining sector alone, our patents hover at around 2%, whereas China owns the market at more than 70%.

We're pleased to see BOREALIS referenced in Canada's defence industrial strategy, and it looks like it's poised to be a central piece of the strategy's future success. Therefore, we encourage the government to ensure that its work also focuses on critical minerals.

In my closing remarks, I would like to quote the CEO of Teck Resources, Jonathan Price, who offered sage advice when he spoke at an event in Ottawa earlier this month. He said, “time is short, and the actions we take over the next five years will set the trajectory for the next 50.”

Thank you, and I look forward to hearing your questions.

[The Chair, Liberal, Charles Sousa]

Thank you.

Mr. Gaulin, you have up to five minutes.

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

Mr. Chair and committee members, thank you very much for the invitation to speak with you here today.

My name is Jeff Gaulin. I'm with Vale Base Metals.

I want to start with a simple proposition: You cannot defend your country without critical minerals—not your borders, not your environment and not your economy. National security begins with supply chains: which countries control them and whether they can stand up under pressure.

Critical minerals are certainly an economic advantage for Canada. They attract investment, create jobs and spur regional development, but they also accelerate the energy transition and enable trade optionality. Today, critical minerals are a national strategic asset.

I'll make three points today. The first is that Canadian critical minerals are indispensable to the Canadian Armed Forces, NORAD and NATO. The second is that nickel, copper and cobalt are mission-critical to Arctic sovereignty. The third is that Canada must move with greater urgency to extract more minerals out of the ground from existing brownfield mines. With an expanded tax credit today, we could be producing and processing more minerals tomorrow.

At Vale Base Metals, our mission is to provide mineral security to a world in transition. We've done that from Canada for more than a century. Today, we employ more than 7,000 people in North America's only mine-to-refinery ecosystem. Our teams explore, mine, process and refine copper, nickel and cobalt from eight mines and three refineries, from Labrador to northern Manitoba.

Last year alone, in Canada, we produced 89,000 tonnes of copper, 80,000 tonnes of nickel and more than 3,000 tonnes of cobalt. These three minerals are designated as national security priorities under Canada's Defence Production Act, and for good reason. They are foundational to economic strength, industrial resilience and national defence. That's my first point.

Canadian critical minerals are indispensable to the Canadian Armed Forces, NORAD and NATO. No advanced military capability exists without secure access to critical minerals. These materials are not interchangeable. They are embedded in platforms that can last up to 40 years, and they are required for NATO interoperability.

Canada produces or refines 10 of the 12 minerals NATO considers defence-critical. Canada is the leading supplier of class 1, military-grade nickel to the United States. In practical terms, Canada is the only country that can reliably supply both the CAF and NATO with both nickel and cobalt, from mining to refining, inside a trusted, geopolitically aligned jurisdiction.

My second point is that nickel, copper and cobalt are mission-critical to Canada's Arctic sovereignty. Icebreakers, drones and AI systems in the north—items pushed to their limits under extreme cold, corrosion and remoteness—depend on critical minerals. Copper enables AI to exist in the Arctic, nickel allows it to survive and cobalt allows it to persist. These minerals are Arctic mission enablers. Without them, Canada's ability to defend itself in the Arctic, as well as meeting NORAD and NATO commitments, is weakened.

Furthermore, northern mining operations offer the potential for dual-use infrastructure for roads, ports, airstrips, remote energy systems and people. Our Voisey’s Bay mine in northern Labrador has a deepwater port that could be expanded to support naval operations. A new, longer airstrip could both improve the productivity of that mine and serve as a forward asset for the Canadian Armed Forces. As Canada strengthens its defence infrastructure, such partnerships could open up new exploration while leveraging existing mines. Northern mining infrastructure is security infrastructure.

My final point is that Canada must move with greater urgency to get critical minerals out of the ground. Having minerals in the ground does not secure our future; only producing them does. Everything else flows from that: refining, manufacturing, trade and security.

I have three long-term policy considerations for Canada and for the committee to consider, but let me leave you with this. Despite Canada's extraordinary polymetallic endowment, we are not extracting enough minerals today to keep our refineries competitive. Vale Base Metals mined 80,000 tonnes of nickel last year, yet we still had to import 16,000 tonnes to make our refineries operate efficiently.

Think on that: We had to import nickel to Sudbury, home to the second-largest nickel sulfide deposit in the world. We have been mining in Sudbury for more than 100 years, and we have 100 years to go. We're going to run out of miners before we run out of minerals. With innovative new processing, we can extract more minerals from our waste rock as well as our tailings. Simply put, there is more value and more security to extract from today's mines.

Expanding the investment tax credits to include mine development expenses for brownfield mines would be the fastest and most capital-efficient way to increase mineral output from existing mines, leveraging workers, infrastructure and equipment already in place.

This is not about subsidies. It is about speed, and in the current global security environment, speed matters, because we are already a generation behind and we do not have a generation to wait.

Thank you.

[The Chair, Liberal, Charles Sousa]

Thank you very much, all of you, for your opening statements. I appreciate it.

We're going to start our rounds of questions. The first three will be for six minutes each.

We'll start with Mr. Kibble.

[Jeff Kibble, Conservative, Cowichan—Malahat—Langford, BC]

Thank you, Mr. Chair.

Thank you, panel, for your opening remarks.

The take-away I get from that is about three things. One is that time is short—and I hope we all agree on this—efficiency is key and there's urgency. I certainly heard that message.

I wrote down a lot of questions, and I'm going to jump around to all of you as best I can. I want to start with Mr. Gaulin.

You mentioned that there are two metals we do not produce and that are on the NATO critical list. What are they? Do we have any of them in Canada? Is it that we don't mine them or that we simply don't have them?

I'll start with that.

[Jeff Gaulin]

Thank you for the question.

The two are rare earth elements and beryllium. I'll have to defer to my colleague from MAC about what we have under the ground in Canada. Those are not minerals that we have in our deposits.

[Jeff Kibble, Conservative, Cowichan—Malahat—Langford, BC]

Okay. There are two that we simply don't have.

I'll throw this out to the panel. Do we have a supplier? Where do we get these right now? Should we be stockpiling these critical minerals that we don't have in Canada?

That's for anyone.

[Photinie Koutsavlis]

I could jump in, if that's all right.

I could speak on rare earth elements. We do have very rich deposits of rare earth elements in Canada. It's really more a timing challenge in terms of execution and getting those deposits into production.

We currently have one processing facility in Canada. The Saskatchewan Research Council imports rare earth elements from Brazil and is actually processing that within their—

[Jeff Kibble, Conservative, Cowichan—Malahat—Langford, BC]

Are these the two rare earth...?

[Photinie Koutsavlis]

Those are rare earth elements.

[Jeff Kibble, Conservative, Cowichan—Malahat—Langford, BC]

Are these the two rare earth elements that we don't have in Canada?

[Photinie Koutsavlis]

Rare elements is a grouping of many light and heavy rare earth elements. We have deposits in Canada. The Saskatchewan Research Council has a scale—bench scale and pilot scale—project in processing the REEs, but as I mentioned in my remarks, China controls about 90% of the processing and refining of these products.

[Jeff Kibble, Conservative, Cowichan—Malahat—Langford, BC]

I appreciate that. I want to focus on.... It was beryllium and another mineral.

[Photinie Koutsavlis]

It was beryllium and rare earth elements that we don't—

[Jeff Kibble, Conservative, Cowichan—Malahat—Langford, BC]

It was rare earth elements. Okay.

[Photinie Koutsavlis]

I am not able to speak to beryllium. That's something we'd have to come back to you on.

[Jeff Kibble, Conservative, Cowichan—Malahat—Langford, BC]

It's something that we need to look at.

I'll throw this out to the whole panel if someone wants to speak to it. Being competitive came up several times. For example, we're importing nickel to Sudbury, which seems strange. Could each one on the panel give a point on what's going to make this more efficient? Is it approvals? Is it reduction of the industrial carbon tax that's impacting it? Is it other bureaucracy and red tape? We also heard that it takes multiple years to get projects approved.

Quickly, from each one on the panel, what steps are going to make us more competitive in Canada?

Mr. Gaulin.

[Jeff Gaulin]

I can go first. As I mentioned, the investment tax credit that exists today, the clean technology manufacturing investment tax credit, does apply to limited expenses related to mining.

I'll give you a real example. I can buy a pickup truck, get a 30% discount to drive that around at surface and not have to bring one tonne of nickel to surface, but for the cost of ventilation to keep our workers breathing underground, the electricity to power our equipment underground and even the bolting to protect our drifts underground—our tunnels underground—from collapsing, not one of those expenses is eligible.

The fact is that we have to go further and deeper in Canada with existing mines. Again, we're not running out of minerals, but the cost gets greater with greater depth, and some of those expenses are not eligible.

[Jeff Kibble, Conservative, Cowichan—Malahat—Langford, BC]

As a quick follow-up before I go to the rest of the panel, tax credits seem more like patchwork, helping a little here and a little there. In the example you just gave, wouldn't tax cuts across the board be more efficient? Time is critical right now. For example, the industrial carbon tax could have a huge impact on all of the operations. If you just got rid of that across the board, would that help speed up production and make it more competitive in the world?

[Jeff Gaulin]

Anything that reduces operating or capital costs would be of great help.