Natural Resources Committee on Oct. 27th, 2025

[The Chair, Liberal, Terry Duguid]

Thank you.

We are on to Monsieur Simard.

Mr. Simard, you have the floor for six minutes.

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Mr. Chair.

Mr. Gratton, in your remarks, you spoke about the current window of opportunity for the mining sector. This window of opportunity can be easily explained by our trade disputes with the United States and by the necessary energy transition.

Now, how can we turn this window of opportunity into mining projects that get off the ground?

Mr. Guay spoke to you about the need to meet infrastructure needs, which are partly but not exclusively the government's responsibility. We already discussed the northern corridor project, which would connect Ontario to a deep-water port in Saguenay. The major challenge lies in funding this type of infrastructure. Of course, there could be government involvement. However, do you know of any user‑pay infrastructure projects in the mining sector with different funding arrangements?

Can we be more flexible when it comes to infrastructure? How can we engage different partners such as the government, indigenous communities or companies?

It's good to have a window of opportunity, but we still need to take advantage of it. I would like to hear your opinion on this topic.

[Pierre Gratton]

I have a good example for you. It's the Red Dog mine in Alaska, a zinc mine owned by the Canadian company Teck Resources. I think that it started production 30 years ago.

At first, the mine didn't have any infrastructure at all. The government at the time, with the help of the Infrastructure Bank, built a port and a road to serve the mine. The mine paid for access to these two pieces of infrastructure. This has paid off significantly 30 years later. As a result, the company has been able to move forward with its mining project.

Let's take another example. A number of critical mineral projects in Nunavut are somewhat similar to zinc and copper mining projects. We're familiar with these projects. They have been around for 60 or 70 years. The projects are still there, but nothing has been built given the lack of infrastructure. Yet there are a number of mining projects. If they were served by a port and a road, as in the case of the Alaska mining project, this infrastructure would make it possible to carry out projects in Nunavut. The road and port project in Grays Bay could help a number of mining projects move forward. That's what it takes. A zone or a region where a number of projects are under way at the same time, with the potential for multiple clients, such as in northwestern British Columbia or the Labrador Trough.

Other northern regions, such as Val‑d'Or, could use infrastructure to transform the economic situation of gold and copper mining projects.

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Mr. Gratton.

I appreciate the critical threshold for projects around infrastructure. I think that we can show this aspect in the committee's study.

Mr. Gaulin, we've spoken before. If I remember correctly, we've already spoken about the much‑discussed issue of tax credits for clean technology manufacturing. I think that you wanted to extend the production line a bit further to include minerals.

I would like you to tell the committee how this extension of the tax credit could benefit clean technology manufacturing.

[Jeff Gaulin]

Thank you for the question.

In our opinion, the challenge is straightforward when it comes to the investment tax credit. Right now, I can buy a pickup truck, for example, and receive a 30% tax credit. However, none of the underground infrastructure—such as lighting, electricity and infrastructure used to keep mines safe—is eligible for tax credits.

If we want to expand the production of critical minerals, if we want to find new markets for our Canadian products and if we want to speed up the development of clean technology for the energy transition, we must increase the growth of Canadian critical mineral production. In my opinion, the quickest and easiest approach is to entice private companies to invest capital in these projects and to increase or modify this tax credit.

[Mario Simard, Bloc, Jonquière, QC]

I know that I'm out of time, Mr. Chair.

I just want to ask Mr. Gaulin whether he can provide a written explanation of the answer that he just gave us so that it can be included in the analysts' report.

[The Chair, Liberal, Terry Duguid]

Thank you. That is a great idea and something I was going to say. You beat me to it.

Thank you, all, for that first round of questions and comments.

We'll now go on to our second round. We're going to start with Monsieur Malette for five minutes.

[Gaétan Malette, Conservative, Kapuskasing—Timmins—Mushkegowuk, ON]

Thank you.

Monsieur Gratton, if we look at mining from a global perspective, Canada arguably possesses one of the world's most abundant chests of resources, yet we seem to fall behind many countries when it comes to our mining operations.

In your experience, why is this the case?

[Pierre Gratton]

I'll give you a history lesson.

Successive provincial and federal governments spent the last several decades taking our sector for granted and forgetting just how essential we are to this country. In the last five years, everyone has woken up. Governments of all stripes have woken up across the country and said, “Oh, what just happened here? We need more mining.” That's welcome. That's why I think it's mining's moment. It's not just Canada. The world has woken up to the fact that we need the things that make the things we rely on in our daily lives. Mining has been such a central industry for this country for so long that I can see how governments took us for granted. That's not necessarily to be critical. We were very big and kept growing. Then we started to slow down and people weren't really noticing. Now we are here.

Things are starting to turn around. We have to look at the gold sector, which has gone from the fifth to the fourth spot overall, worldwide, in the last few years. We've increased our production of gold by 31% at a very good time to be producing gold. We have more mines coming on stream, so our production is going to increase this year and next. We can do the same for copper. We can do the same for nickel. We can do the same for all the critical minerals we need, with the same focus and discipline.

Gold has the advantage of having prices that attract a lot of exploration and development. With the right tax incentives—my colleague just mentioned them—for development costs underground, we can increase our production of nickel and other critical minerals in the very short to medium term.

We can do this. We just need to now turn our attention to what's required.

[Gaétan Malette, Conservative, Kapuskasing—Timmins—Mushkegowuk, ON]

Thank you.

Monsieur Gaulin, you're with an international company. What has your company's experience been with the mining approval process in Canada compared to other jurisdictions you operate in?

[Jeff Gaulin]

As mentioned, we are a mature miner in Canada. We recently brought the Voisey's Bay underground expansion to our surface mining, but many of our mines are deep underground and have been for quite some time.

The mining approval process in other jurisdictions can sometimes move faster, but not always with the same degree of certainty. When you get your permit, will you actually get to build? We operate in other jurisdictions, such as Brazil and Indonesia, where you may be promised your permit in time, but your ability to build, to have access to the infrastructure and to get to market may then be questioned.

I think what we're seeing around the world—it's certainly in Canada, but it's also a contagion around the world—is an acceleration of mine permitting, responsibly. The EU has done that. The United States is doing that at a rapid pace. That is something we should keep our minds and attention on. Ten years ago, the United States was Canada's number one customer for oil and gas; it became our number one competitor. Mining faces the same existential threat from the United States.

I would applaud any motions that accelerate mine permitting in Canada, because we are going to need more minerals for all of the above. This is something that shouldn't be restricted to just a few projects. It should be for all responsible projects.

[Gaétan Malette, Conservative, Kapuskasing—Timmins—Mushkegowuk, ON]

Thank you.

[Pierre Gratton]

May I just add something here?

There's a saying in the industry that I heard a long time ago that is worth mentioning here. Canada is often said, within our sectors, to be one of the best places to operate a mine and one of the worst places to develop it.

We need to change the second part. There are steps we're seeing across the country to do just that. We don't have to become the best or the fastest in the world, because we already have that first one down, as Jeff mentioned, but we have to get better at that second half of the equation.

[The Chair, Liberal, Terry Duguid]

Thank you, Mr. Gratton.

We're going to go on to Mr. Hogan for five minutes, and then to Monsieur Simard for two and a half minutes.

[Corey Hogan, Liberal, Calgary Confederation, AB]

Thank you, Mr. Chair.

Thanks to all of our witnesses for being here.

I want to talk about the overall market environment for critical minerals. I think we can all absolutely agree that there's a place for robust industrial policy and smart interventions by Canada and the provinces. Of course, we also want a free market with supply and demand and price signals.

There are a couple of problems that come to mind for me. The first problem is domestic. Mr. Dunn, you identified unequal treatment of critical minerals. Second, I think we have an international challenge. First, it's a race, as you mentioned, Mr. Gaulin. Second—and this has been touched on by many witnesses—not every nation wants a free market. There are interventions in an otherwise operating free market. I'll get to that if time allows.

Mr. Dunn, I was pretty compelled on first exposure that helium should be treated like other critical minerals from a flow-through and ITC perspective. I want to give you the chance to elaborate on that and inform the committee as to whether there are other areas where treatment is uneven or where we should take extra care to make sure that we're not distorting the market and creating other unevenness throughout.

[Richard Dunn]

Thank you, MP Hogan.

The uncompetitive tax treatment that helium receives is a real problem. Not having access to the standard tools.... Certainly, Canada recognizes that depreciation is a big deal in terms of attracting investment. You can see this through Canada's accelerated investment incentive, which focuses on competitive depreciation rates. As well, flow-through shares are responsible for 70% of financing for nascent exploration. These are key tools that Canada has in its economic tool box that, currently, helium doesn't have access to.

With that, it could go further—critical mineral exploration tax credits, ITCs—but at this point, just getting tax parity and getting the basic tax treatment right is important to get the industry on a level playing field.

To carry on with your question around what the next step would be.... Once we've established the industry production, getting the company solid, the next step—in answer to MP Stubbs' question around the reliance on U.S. liquefaction—would be, after getting the production up in Canada, to look at establishing liquefaction infrastructure in Canada. From there, we can reliably meet Canada's needs and also start to export liquid helium to our allies.

To answer your question, I would say that the next step would be to attack measures that would incentivize liquefaction, once we get tax parity for the producers.

[Corey Hogan, Liberal, Calgary Confederation, AB]

Your comments about allies lead naturally into my second question.

Not every government wants that free market. We have a lot of geopolitical rivals that are happy to see prices low if it serves their interests by depressing investment in these critical minerals across the western world. How do we address that in a minimally impairing sense to make sure that we still have a free market that is sending price signals?

I'll say that one of my concerns.... Yes, absolutely, let's talk about price floors. Let's talk about the various tools that are available to us—purchases by governments to stockpile—but how do we make sure that we're not making an overall uneconomic decision? I want to combat their uneconomic decisions; I don't want to create our own uneconomic decisions.

Mr. Gaulin, you're a natural launching point for that one.

[Jeff Gaulin]

Well, we can't out-China China. It's simple. We don't have the wallets to do that, but when the United States government invests $400 million in one company for equity, for offtake and for price floors, you don't live in Adam Smith land anymore. The invisible hand is visible, and for select critical minerals, the market is not transparent and the market is not efficient, so the ability to rely.... I'm a child of free trade, and I would have loved to see that continue, but we don't live in a world where that is necessarily the global market for these types of commodities.

I do think some of these measures have to be time-bound to provide us and Canada with a first-mover advantage. As I outlined in my remarks, we can be the provider of choice to places like NATO, the G7 and the like because we are established. We can get them out of the ground faster and we can therefore sustain an incumbent position with some of these customers.

I'll give you an example. We sell 70% of our nickel to the United States. That is a good relationship and has been since before World War II. We sell less than one shipment a year to Germany. If you think Germany is overreliant on Russia for natural gas, wait till you see what it does for nickel in its military, because 99% of its nickel comes from Russia.

These are not conditions that will just be magically changed overnight entirely at free market. There will need to be some industrial intervention, as we are in this period of realignment and transition.

[The Chair, Liberal, Terry Duguid]

Thank you, both.

Mr. Simard, you have two and a half minutes.

[Mario Simard, Bloc, Jonquière, QC]

Thank you.

Mr. Gaulin, in your opening remarks, you made four recommendations.

You spoke about the defence and strategic investment aspect. You referred to the Security Action for Europe program, or SAFE. This program will provide €150 billion for defence projects, which also involve critical minerals. This committee has heard on a few occasions about NATO's desire to set price floors for certain critical minerals to help mining projects get started.

I've been here since 2019. I've heard about many initiatives. However, I've yet to see any of them come to fruition. So I remain somewhat cautious. That said, I would still like to hear your thoughts on this particular window of opportunity, where the mining sector could be called upon to meet certain national defence and security needs. Aren't there possibilities here?

How could Canada help meet the needs of certain European partners?

[Jeff Gaulin]

Honestly, it would be easier for me to answer this question in English.

[Mario Simard, Bloc, Jonquière, QC]

No problem.

[Jeff Gaulin]

One thing that's been quite exciting about the critical minerals sector is that, in addition to the base types of technologies that we provide, there are two massive future industries to support. One is clean energy, which may or may not include EVs, but certainly we're talking about renewable energy and mobile batteries, etc. And at the same time—at least in our company, but also with many other critical minerals—they have long gone into defence applications.

We see both as growth industries over the next 20, 30 or 40 years. It's just a matter of what your percentage of growth is. The opportunity for us is not to pick one or the other, but absolutely to produce more minerals for all applications around the world. In our historical trading relationship for our critical minerals—we produce mostly nickel, but also copper and cobalt, and some days we're a gold miner who happens to pull nickel out of the ground—these have been essential for the American industry.

I'll give you a perspective. We have five nickel mines in the city of Sudbury, and we invite any and all members of the committee to come visit. There is one in the entirety of the United States, and it does not have a refinery. It has to send that to Canada to be refined. This has been a good bilateral relationship for a number of years.

Our opportunity not only to supply the world's biggest market, but to add new markets such as the European Union, is immense.

[The Chair, Liberal, Terry Duguid]

Thank you.

We're going to go on to Mrs. Stubbs for five minutes and end up with Mr. Danko for five minutes to wrap up this second round of questioning.

Mrs. Stubbs, go ahead.

[Shannon Stubbs, Conservative, Lakeland, AB]

Thank you, Chair.

Mr. Gratton, you have said this, and of course, we agree with you: “Canada must foster a more efficient investment and regulatory environment.” You also said, “For the federal one, that involves an impact assessment, an environmental assessment, and that takes several years.” You've also warned, as you have again here today, “The timelines that it takes to get mines through both federal and provincial processes present a real risk to [Canada's] ability to take advantage of this opportunity.”

I noted, too, the comment that Mr. Gaulin made about the risk in operations in places like Indonesia or Brazil, where you may get an approval yanked after you have it. I would just alert the committee that this is, of course, precisely the concern with Bill C-5, because allowable in Bill C-5, which is a problem I tried to fix, is the ability for the federal government to take a project off the national list, even once it has made it.

There still remains great uncertainty for junior explorers and producers in Canada and for major mature mining operators, such as the ones that your organization represents. It is a fact that, in 2024, a survey of mining executives found no Canadian jurisdictions among the top five, globally, for mining investment, and Canada does have the second-slowest approval times in the OECD. That goes to your point about needing to improve the way in which Canada develops mines.

These facts, as they are, include the fact that it takes 23% longer than in Australia and 38% longer than in the United States to get a mine approved and operating in Canada. I wonder if Pierre and Jeff have comments in terms of the policy levers that tip Canada over into an uncompetitive position, given the kinds of challenges there are for our amazing Canadian miners, such as geography, geology, access to land, climate and uncertainty in policy. These are some things that tip the scale for some of our international competitors.

Maybe you want to give some best practices among international competitors that Canada could adopt to fix this issue of developing mines in Canada.