National Defence Committee on March 9th, 2026

[Cheryl Gallant, Conservative, Algonquin—Renfrew—Pembroke, ON]

Drawing from your RIM experience with secure technologies, what specific barriers have prevented Canada from scaling domestic defence tech champions that rely on our critical mineral resources, and what concrete changes to R and D funding, tax policy and procurement would you urge this committee to recommend?

[Jim Balsillie]

We've had a naive and sentimental conception that this is some kind of free market globally, when in fact these are all public-private frameworks advancing their companies globally. We leave our companies at the altar while favouring foreign companies to come here, take them over and capture all the value.

We need a proper assessment of spillovers for where we support and where we buy—the nature of foreign investment. I'm not against it, but you have to manage it for spillovers, just as every country does, and no one more than the U.S., the EU and Australia. We then have to be creating institutional infrastructure of standard setting with our companies, which we do not do, intellectual property for our companies, which we do not do, and sovereign compute with data strategies for our ecosystems, which we do not do.

There has been an inattention to how 92% of the world works, and then we wonder why we don't do better. It's a self-inflicted wound way of thinking that's made us a prisoner.

My one recommendation is to create capacity for how these things work, and understand that there are institutions, technocracies and cross-cutting ways that you can begin to capture. This is not about money. This could be reoriented in less than a year if we actually attuned to how the game is played globally.

[The Chair, Liberal, Charles Sousa]

Thank you, Mr. Balsillie.

Thank you, Ms. Gallant. I appreciate that.

Ms. Romanado, you have up to five minutes.

[Sherry Romanado, Liberal, Longueuil—Charles-LeMoyne, QC]

Thank you very much, Mr. Chair. Through you, I'd like to thank the witnesses for being here.

Before I begin, as this is my first intervention today, I want to say my thoughts are with the cadets and family members of those affected by the accident in Sainte-Rose-de-Watford, Quebec. I want to say a special thank you to the first responders. We lost a cadet over the weekend in a tragic bus accident, so my thoughts are with their families.

My thoughts are with the accident victims.

My first question is for Dr. Mykytczuk.

You referenced research and the importance of research in this domain. I'm not sure if you're aware that as part of the defence industrial strategy, we've created BOREALIS, which is “modernizing Canadian defence and national security innovation by accelerating the delivery of advanced technologies”, “aligning federal innovation efforts toward mission needs” and “connecting partners from government, academia, and industry”.

Essentially, what we'll be creating are what we call DISHs, or defence innovation secure hubs. They're intended to “provide secure, mission-oriented environments that support sustained collaboration” across three pillars and “enable research, development, and experimentation activities aligned with defence and security needs.”

I understand that Laurentian University has some expertise in this regard. What are your thoughts on how applied research programs and testing facilities that scale new mineral recovery technologies from laboratory discovery towards industrial deployment can help build the domestic capabilities needed for secure and resilient critical mineral supply chains?

[Nadia Mykytczuk]

Thank you for the question. I'd like to combine it with some of the suggestions that Mr. Balsillie just made in terms of having a strategy.

Applied research doesn't happen in a vacuum. Institutions across Canada, whether they are government research labs or academic ones, have often operated in silos. I'm very happy to hear about BOREALIS and DISH. I think this will help create regional centres of excellence that hopefully can then be connected across the critical mineral spectrum and across the supply chain by having a strategy that links expertise.

These are multidisciplinary problems, whether they are for electrification or for defence production technologies. There are a lot of synergies between those knowledge bases and the capacity, but there need to be overarching strategy and guidance to ensure that quick pivots can be possible in these applied research centres, whether for deploying a decarbonization technology, for battery production, for surveillance or for another deployment.

[Sherry Romanado, Liberal, Longueuil—Charles-LeMoyne, QC]

Thank you.

My next question is for Dr. Exner-Pirot.

You mentioned one of the mines in Yukon. You mentioned that because of a lack of electricity, it had to reduce production, if I understood correctly. Could you elaborate a bit more on the importance of perhaps investing in dual use? My colleague referenced it as well.

As you know, Canada has made a commitment to reaching a 5% GDP target by 2035, which would incorporate 1.5% GDP that could be used for dual use: both for defence and for civilian use. Could you elaborate a bit on how we could perhaps leverage that to make sure we are providing the resources we need in Arctic exploration and mining?

[Heather Exner-Pirot]

Any operation needs communication infrastructure, transportation infrastructure and energy infrastructure. The military needs that, mining companies need that and communities need that. The more you have it, the cheaper it can get, and you can reach some scale and it's better for everybody.

Especially when we're talking about doing more basing and having more operations in the military, even just the NORAD sites themselves can be very energy-intensive if you're trying to capture a lot of data, if that's what you're doing. Obviously, the more data you capture, the more energy you're using and the more data you can capture.

Everyone is looking at ways to increase energy infrastructure, but it's obviously very expensive. As Mr. Boyd said, the more we can leverage each other's energy infrastructure and use it for these multiple uses, the more that everyone can share in the scale.

We're obviously focused on transmission quite a bit, but that can be very expensive in the north because you're looking at very long lengths and maybe long distances from the generating facilities. Another option that mining operations are considering is trucking in LNG. Yukon is moving towards some of that. Diesel is very versatile and very useful, but obviously it is also expensive and quite polluting, so microreactors are looking like a potentially very good medium-term solution.

The American military is moving forward. I think they'll have a test microreactor at the Eielson Air Force Base in Alaska. Most people think that's probably a very good fit. The extent to which the Department of Defense can advance that and do some testing and some of the first-of-a-kinds for microreactors would be very beneficial and useful for mining companies and communities.

[The Chair, Liberal, Charles Sousa]

Thank you very much.

Mr. Bezan, you have five minutes, sir.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

Thank you, Mr. Chair.

Thank you, witnesses, for your great testimony today. It's really important as we're talking about how we continue to drive forward with our sovereignty and defence capabilities and how critical minerals tie into that.

As mentioned, the Conservative leader, Pierre Poilievre, has talked about wanting to do more with leverage. Mr. Balsillie talked about leverage as well. Other witnesses also mentioned that we need leverage in what we bring to the table. We don't want to be just hewers of wood and drawers of water. We have to move forward and create extra jobs, as well as provide extra value not just to our Canadian economy but in what we actually bring to the table—not just the raw resources.

My question is for Mr. Balsillie, Professor Mykytczuk and Professor Exner-Pirot.

We're talking about how we need to do more on the defence research side, how we need to own the IP and how that cross-pollinates with the critical mineral sector. We have in Canada 10 of the 12 critical minerals on the NATO list. As I think one of the witnesses said, we have an amazing endowment. Let's talk about how we capitalize on that and how we actually turn it into leverage that can be used in our conversations on everything from defence, security and trade to how we drive forward in being a leader in the world rather than a follower.

Defence Research and Development Canada is a research organizations, and I think we need to talk about bringing in some of that skill set, as well as how that goes back into our universities, which are producing the next generation of employees.

[Jim Balsillie]

I'm happy to respond to that.

The defence industrial strategy reads like it was written in the 1970s. I'm very pleased that they're going to buy from Canadian companies. The money is going to be spent. There are absolutely no systemic strategies to capture the value from that. We've done this for decades. We do all this great research and don't get the economic benefits from it. First of all, we don't generate the IP, as we should. We don't maintain control of it, and we don't have strategies to insert that into the rules for what value is.

It's very simple. If somebody has the patent for a left-hand drive car and somebody has the patent for a right-hand drive car, and if they set the rules for a right-hand drive car, then the person who owns that gets really rich, and the person who owns the other gets steak knives. Setting the standards is very political. This has to be an integrated....

By the way, if you've ever looked at the USMCA, it substantially governs how we're allowed to participate in standards and how we're allowed to manage our IP and data. We're shackled in many of those rules, to put us into a low value-added position.

These are all examples of frameworks where others use them to expand their wealth, power, leverage and security. We have not attended to that, and the chickens have come home to roost.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

That's what you are really referring to. The EU, the U.S. and especially China have taken away Canada's ability to have, one, sovereign control of it and, two, financial benefit from owning it.

[Jim Balsillie]

We don't know that the battle is going on. We've abdicated from it. I'm simply saying to build the expertise right at the centre of the PCO—an economic council, an economic secretariat—and start being front-footed. We have all the potential to be much greater, but we cannot be stuck in 1970s thinking. I could multiply the information I've shared with you today, and it would all go back to the same point.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

Would other witnesses want to comment?

[Heather Exner-Pirot]

Yes, I would love to jump in here.

At the end of the day, we're talking about our defence industrial supply chain. This has economic implications, but we have to be able to defend ourselves, fight in wars and protect ourselves and our alliance.

Canada has only 43 million people. We will never have a totally sovereign, independent defence supply chain. We depend on being part of an alliance. The best thing we can do within that alliance to be that good player and get leverage and influence is provide some raw materials to that alliance so that the defence supply chains in the United States and Europe can ramp up in the event of a conflict.

If there's a war of attrition, China would win today, so it's very important that we have latent capacity. Then we could ramp up quickly, and we could be the arsenal of democracy and make sure there are the raw materials to fight a protracted war.

To my earlier point, we did go through a period in Canada where we did not allow financing for defence companies. We have not been allowing research for military purposes. I see that we've changed it on the financing side, which is good. We want our defence companies to be able to access loans and lending, but I still think we are not there yet on the research side. We haven't changed our mindset to wanting to create researchers who can do research that is used for military offensive purposes, which we need in this country to be able to fight wars.

[The Chair, Liberal, Charles Sousa]

Thank you both.

Mr. Malette, you have up to five minutes, sir.

[Chris Malette, Liberal, Bay of Quinte, ON]

Thank you, Chair.

Mr. Boyd, during a recent visit to Australia, Prime Minister Carney welcomed Australia into the critical minerals production alliance, which was an initiative launched under Canada's G7 presidency in 2025 to expand critical minerals production and processing capacity and to diversify supply chains from mine to market. Both Canada and Australia hold vast reserves of critical minerals that are key to defence.

Further to the discussion we had on the last line of questioning, how will the new critical minerals agreement between Canada and Australia strengthen co-operation in securing reliable supplies of strategic minerals? In your view, what impact could this partnership have on diversifying and reinforcing defence supply chains among allied nations?

[Sean Boyd]

If you think about Canada and Australia, they both have important endowments of critical metals and deposits. The key behind all this is to find the deposits that currently make economic sense to develop. You can decide, “Oh, these metals are important”, but unless you have those deposits in the right places and can make an economic case that they need to be developed, you're not going anywhere.

Those alliances would allow us to share information, but we already share information at the industry level among mining companies. We already share those technologies. It's going to come from both Canada and Australia understanding they have the endowment, and then from working together in partnership with the government on selective strategic infrastructure to make regions within both countries investable for investors.

That's the bottom line. We forget about all this. I've spent time in Washington. They're gung-ho. They're going to do this. They're going to do that. They're going to put capital here. The missing link in all this is having deposits in the right place that make economic sense, and having the skills to develop them.

The key, again, is processing. Canada was a leader in mining and processing when we had the Falconbridges, Norandas, Incos and Alcans running refineries and building mines. We need to get back to that type of mindset. It may be 1970s thinking, but that's going to underlie the start of the value creation chain.

In terms of what we do after that, I would agree with Mr. Balsillie, Nadia and Heather. Start to capture the technology and research that will allow us to take advantage of and improve the economics.

[Chris Malette, Liberal, Bay of Quinte, ON]

My next question is for Ms. Mykytczuk.

How should Canada balance the urgency of developing critical minerals with environmental stewardship and indigenous partnership? It's something that hasn't been top of mind in our discussions today.

[Nadia Mykytczuk]

Thank you for bringing that important aspect to the forefront.

Certainly, globally, everybody looks to Canada to lead an environmentally sustainable and equitable reconciliation with first nations. As has already been outlined by some of the other witnesses, we simply can't meet the demands of decarbonization and defence by leaving a massive environmental legacy. Having capacity, technologies, zero-waste mining, equitable mining projects and partnerships with equity ownership by first nations is entirely within the realm of possible and doable in Canada. That has to be at the forefront of discussions on new projects.

In our case, when we're looking at tailings reprocessing, we're absolutely able to have that win-win-win if we think strategically not only in extracting that value but also in reducing and removing environmental liability so communities don't have the long-term impact of mineral development.

[Chris Malette, Liberal, Bay of Quinte, ON]

Do I have time for one more question, Mr. Chair?

[The Chair, Liberal, Charles Sousa]

Yes, go ahead.

[Chris Malette, Liberal, Bay of Quinte, ON]

Thank you.

My next question is for Dr. Exner-Pirot.

In your view, should Canada define economic security within the context of critical minerals and defence supply chains?

[Heather Exner-Pirot]

We should define it and prioritize the economic value of minerals. I think gold is extremely important to the Canadian economy, even though it's not a critical mineral.

In the context of defence spending and the defence industrial supply chain, it's clear to me that we should be focusing on things we would need if we had to quickly ramp up the defence supply chain for NATO. Usually, what you need for military applications is a very small portion of the market. You don't need the global nickel supply chain or the global copper supply chain. You need a small portion of that to feed your defence supply chain.

In terms of defence spending, what you could classify as NATO spending to get to the 5%.... Beyond the minerals on the NATO mineral list and the things China has put export restrictions on, let's make sure we have some minimum capability in processing and using those things.

[The Chair, Liberal, Charles Sousa]

Thank you, Heather.

Thank you, Mr. Malette.

Monsieur Savard-Tremblay, you have two and a half minutes, sir.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot—Acton, QC]

Thank you, Mr. Chair.

Mr. Turgeon, we have heard you advocate for eco-friendly practices and such.

Now I'm going to ask you a tough question. You talked about a more modest or somewhat less ambitious approach. Given China's enormous power, can we really do that? Wouldn't we be condemning ourselves to an uneven playing field?