Good morning, Mr. Chair and committee members. Thank you for the opportunity to speak to you today.
I'll focus my remarks on three areas: critical minerals, investment tax credits and nuclear energy.
There is widespread consensus in the resource sector that we are not competitive enough in attracting investment in this country and that Canada's businesses, workers and economy have suffered as a result. While we enjoy a tremendous natural resource endowment, our regulatory and policy environment is inefficient and cannot support the investment and activity required to meet our net-zero goals.
According to NRCan's major projects inventory, the value of projects planned or under construction in Canada since 2015 has fallen by 31%, from $711 billion to $520 billion. This does not account for inflation either.
Critical minerals are the foundation for a transition from an energy system based on fossil fuels to one based on renewables and electrification. The International Energy Association has suggested that we need six times more critical mineral production by 2040 to meet our net-zero goals. For some minerals, like lithium, graphite, cobalt and nickel, it's more than 20 times as much. EVs and electricity networks make up the bulk of this demand.
We are nowhere near increasing mining production enough, globally or domestically, to meet net-zero goals. In fact, in 2022, world mining production was less than it was in 2019.
Far from rapidly increasing mineral production, we have plateaued. Global mining capital expenditures are about two-thirds of their peak, which was in the last commodities boom in 2012. Global mining finance, debt and equity is about one-third of the peak, which was in 2013. The reasons for this include a decline in ore grades, high costs of capital, volatile commodity prices, growing regulatory burdens, supply chain pressures and an aging workforce.
Similarly, in Canada, despite strong rhetorical support, critical minerals production is actually declining, not growing. Natural Resources Canada released its annual mining projection results in mid-April, confirming that we produced less copper, cobalt, nickel, zinc, uranium and platinum-group metals in 2022 than we did in 2019.
Canada has tremendous geological potential, but we are not realizing it. Most of our allies are net mineral importers, not exporters. They are depending on us to be a reliable and growing source of minerals, and we are not stepping up.
Next are investment tax credits. ITCs are the most important tool of the Inflation Reduction Act for stimulating investment and growth. To compete, the Canadian federal government has committed to developing ITCs for clean technologies in its last three budgets, but as of today, none are in force. While draft legislation has been published for CCUS and clean technologies, the ITCs for hydrogen, clean manufacturing and clean electricity remain conceptual. These are of limited use to firms or investors considering projects in Canada.
Delays in finalizing the terms and conditions of each ITC through law effectively freeze capital and diminish Canada's ability to achieve its emissions reduction targets. There is also a perception in the business community that Canada's ITCs are overly complex and inconsistent with the objective of using tax policy to attract higher levels of investment. Clawback provisions, different phase-out schedules, narrow and confusing eligibility criteria, knowledge-sharing requirements and high-level auditing risk are just some of the provisions discouraging investment.
Not all is lost. The nuclear sector in Canada shows what's possible when Liberals, Conservatives, the provinces and the federal government have common goals, as well as a regulator that actually supports rather than frustrates development. Canada is emerging as a global leader in the development of advanced reactors as well as in continuing to commercially develop its iconic CANDU technology. We are leveraging our incredible uranium reserves and nuclear expertise not only to decarbonize domestically and help advance the energy security of our allies in eastern Europe and elsewhere, but also to build a globally competitive supply chain around nuclear engineering, advanced manufacturing and services.
Although the Impact Assessment Agency, the IAA, has the regeneracy and regulatory burden, the Canadian Nuclear Safety Commission itself is world class and actually provides a competitive advantage to our nuclear industry as it develops new reactor models. With that example in mind, there is much more to be done to achieve our clean energy plans. Working Canadians and industry share a goal of a strong economy and a healthy environment, but we will not have either unless our policy and regulatory environment improves.
Thank you for your time.