The obvious backdrop to this is that China has spent the last two decades gaining market share and monopolizing some processes such that it's very difficult to find a product or component that doesn't go through China. In the event of a conflict with China, that would obviously be a huge problem. They have already been willing to weaponize or use export restrictions to harm western economies, and they certainly would do so to a defence industrial buildup if they could.
We need to find solutions to produce these products ourselves in the face of the fact that the free market is not free. The free market is not sufficient because the Chinese are actively manipulating it.
Now you have to get to the question of how we can respond to this. We are a free-market society and generally laissez-faire. However, we're in a situation where, for national security reasons, we must have sufficient supply of these.
On the Canadian side, we mine most minerals, as I think we've all established. It's probably not the mining aspect that is the difficult problem to solve. Of the five phases all the way up to a component that gets put into a fighter jet or a tank, it's the three processes in between and making those work that are difficult.
Companies will make money off of copper, zinc, lead and iron, but it's going to be very hard for them to make money off of refining gallium, for example, which is just a small, niche market where it's very difficult to compete with the Chinese. In Canada, I would say that we have 34 critical minerals, and we not going to do the refining, the processing and the advanced manufacturing of these advanced alloys and minerals.
For me, it is essential that we work with our allies. I'm saying there are five layers, but for some it might be three or four, and for others it might be six. Whatever we produce and refine, we should make sure we know there is someone in the alliance that can take a product and make it into a component for a weapons system on the other side—if it's not us. That is the difficulty in all of this. Normally, the market would be the one to coordinate these things, and we're saying that in this situation, the market is not acting optimally, so governments have to intervene.
That's kind of where we're at.