National Defence Committee on March 23rd, 2026

[Cristina Pekarik]

I'm not going to comment specifically on the project, because I'm not sufficiently familiar with it to offer anything right now. I can follow up in writing. Certainly Canada's federal government has set up some measures in order to participate in an equity participation, taking an equity stake in some of these projects. That is a potential role for the government.

There is another role the government could take, which is this: When it comes to those very critical minerals, there could be, when we're talking about processing and refining, a role for government to have a minimum processing requirement within Canada. This is because we are trying to build out, as opposed to shipping offshore, to try to build our processing and refining capacity. That could potentially be a strategic role for government to take, and this could be done under the Defence Production Act. Without pretending to be an armchair lawyer, I'd say that this is potentially something that can be done.

[Tim Watchorn, Liberal, Les Pays-d'en-Haut, QC]

I'm going to continue along the same lines.

In Quebec, we are fortunate to have a copper supply chain through Glencore, which owns the Horne Smelter and the CCR refinery. If the provincial government in Quebec decided not to make the investment, do you think the federal government should get involved in saving the entire copper industry in Quebec?

[Cristina Pekarik]

There is a potential role, and certainly that seems to be what the Defence Production Act was envisioned to do, the defence imperative, which is exclusively a federal responsibility. Of course, because it's resource management, the constitutional division of powers ideally makes it a partnership. There's room for collaboration and for this defence imperative to have more work done at the Council of the Federation and at the Energy and Mines Ministers' Conference. These are critical forums for building this co-operation.

[Tim Watchorn, Liberal, Les Pays-d'en-Haut, QC]

Thank you, Mr. Chair.

[The Chair, Liberal, Charles Sousa]

Mr. Savard-Tremblay, you have six minutes, please.

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

Thank you, Mr. Chair.

Ms. Pekarik, thank you for being here and for your presentation. We'll read your document with interest.

We know that getting projects built in the north is not easy. It's not next door. So distance is already a challenge. In addition, population density is low. There are probably additional costs because of the distance. Similarly, the infrastructure might not be as well‑developed as it could be, but correct me if I'm wrong. There is also the climate, which means that the north is not accessible to everyone.

Does all of this mean that there are real and significant obstacles to the development of the critical minerals industry in that region?

[Cristina Pekarik]

Yes, there are obstacles, but there are also opportunities. Canada's geological endowment is unparalleled. However, research going back 10 years, which was completed by the Mining Association and PDAC, indicates that the cost of commissioning a project in the north can be up to two and a half times more expensive to complete. Canada had committed earlier to a number of commitments for infrastructure development. We've seen a recent articulation of further commitments to infrastructure development.

When it comes to infrastructure, as with the mine project reviews themselves, we see delays. We're going to have to get at this definition and measures to expedite. In terms of getting at infrastructure development, as an example—you touched on this point—it needs to happen in a timely way. We have commitments from the federal government for resourcing infrastructure development, which are getting delayed or stranded because there isn't the execution on getting those infrastructure developments done. Yes, it's very important, but execution is critical.

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

Let's say we have a 10-year horizon. What investments would be needed to achieve those objectives?

[Cristina Pekarik]

I wouldn't be able to quantify this. It would depend on the basket of projects, on which projects are approaching final investment decisions and which are getting through the assessment and regulatory processes—and, to backtrack, on what priorities and opportunities are being identified by NRCan through the screen they're applying. It's very specific, but there are nodes and there are areas that are already identified. Certainly, in Yukon, we have specific areas in the east, in the west, in the gold fields and in the Casino mine project, which is a potential copper-molybdenum-tungsten project. This has become much more strategic, given the current defence imperative.

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

I understand that there's an opportunity, but we also know that a number of countries produce at a lower cost, including China, which is a major systemic rival. Can we really anticipate that production would be competitive? Would that be reasonable and feasible?

[Cristina Pekarik]

It's going to be critically important for us to look at not just escorting projects through our existing assessment and regulatory systems to make gains where we can, because we can control only what we can control. The federal government has control over how it fulfills its management function in relation to assessment processes, and provinces and territories manage it in relation to resource management, so making gains....

A lot of things can be done that are not particularly new. We are already seeing some effort to have an equivalency. Right now we have two assessment processes: the federal process and the provincial process. Making equivalencies so that you have only one assessment process: This is something that's known and that can and should be done. In the Yukon, we have only one assessment process, but our timelines are no better; perhaps they even scale upwards compared to other parts of the country. We have to manage for things like scope creep on projects and have pre-assessment timelines—“time is money”—that add to our being able to execute in a timely way and be competitive.

Another recommendation that I have provided is to further ask the Parliamentary Budget Officer to do a sensitivity analysis on that bundle, that pipeline of projects, which looks at how sensitive those projects are to investment. It's very much to your question about tax measures, the capital cost allowance, or about taxes, excise taxes and things like the industrial carbon tax. How do we compare, for instance, to Australia, to other investment destinations, where we're also looking for partnerships on critical minerals supply? We also, of course, are competitors, with places like Australia, for investment dollars. In some areas—you mentioned China—we are not going to compete because of our labour standards and so on.

[The Chair, Liberal, Charles Sousa]

Thank you.

Ms. Gallant, go ahead, please.

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

Ms. Pekarik, Canada has never been able to achieve the economy of scale to make processing here profitable. What do you see that has changed?

[Cristina Pekarik]

It will depend on our production and potentially on our ability to incentivize investment and do the research and development. One of your previous witnesses talked about the investments in research and development, as well as opportunities for reprocessing. Those are the kinds of things that potentially allow us to get us to sufficient scale for refining and processing.

Those strategic investment arrangements with our allies in the minerals partnership, which includes a 12-nation partnership that Canada was a lead on, are a strategic place to look for those kinds of opportunities.

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

Earlier, we had Mr. Balsillie, who said that the real financial benefit is the IP developed for extraction and processing.

Do you know if any defence and research development in Canada is working on the IP for extraction and processing?

[Cristina Pekarik]

I listened to Mr. Balsillie's testimony.

This is a more universal issue with Canada protecting IP. Mr. Balsillie is very well placed, through lived experience, on the consequences of not having a strong IP.

IP is integral. Protecting our IP for refining and processing, and for the scientific and technological development that precedes it, is critical to the whole ecosphere.

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

What is the strategy to build the capacity for Canadian scientists to develop the IP?

Are we going to ship it back to China or the United States for pennies and then pay millions to get it back, or are the regulatory restrictions going to change?

[Cristina Pekarik]

I'm sorry, Ms. Gallant. I missed the first part of your question.

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

What is the strategy to build the capacity for Canadian scientists to develop IP? Are we going to continue doing what we've always done, which is getting the ore, shipping it to China and paying more to get it back?

[Cristina Pekarik]

To the extent that we're able to capture—through IP protection measures, potentially through processing requirements under the Defence Production Act and through producing—enough that we can attract the investment, the investment becomes attractive for processing and refining. Those are the kinds of strategies that will position us for processing in Canada.

It was observed this morning that we are exporting the raw material to China for processing and then importing the finished product.

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

What physical evidence is there that anything is really going to change from the way things are being done now?

[Cristina Pekarik]

Part of my recommendation for building this defence fiscal capacity anchor is about signalling and working with the Major Projects Office, for instance, to get through a number of critical changes to accelerate our pathway. It is a multipronged, multistep process. It's ensuring the accountability is being met to a defence imperative as opposed to the current context that we have experienced.

Over the last 10 to 15 years, for instance with review processes, the timelines were always built out. They now have to scale back, and our competitors are setting the benchmark. The United States, for instance, through changes to NEPA, is scaling the scope of investment and downstream permitting to be very specific to the project, whereas we have things that have grown out in which we have multi-year research programs being conducted on a multitude of things, with tens of thousands of pages for submissions.

I understand that the United States is looking at 150 pages for submissions. That's a very different universe from the multi-year research programs and tens of thousands of pages of documentation that we currently experience.

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

Are you aware of any permits for critical minerals extraction that have been issued in the last year?

[Cristina Pekarik]

No, I'm not familiar with the full universe across Canada, so I can't answer that question.

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

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