U.S. offers cash to Canadian critical minerals projects during Biden's visit
There was a pot of gold at the end of President Joe Biden's jaunt to Canada. It's going to Canada's mining sector.
The U.S. military will deliver funds this spring to critical minerals projects in both the U.S. and Canada. The goal is to accelerate the development of a critical minerals industry on this continent.
The context is the United States' intensifying rivalry with China.
The U.S. is desperate to reduce its reliance on its adversary for materials needed to power electric vehicles, electronics and many other products, and has set aside hundreds of millions of dollars under a program called the Defence Production Act.
The Pentagon already has told Canadian companies they would be eligible to apply. It has said the cash would arrive as grants, not loans.
On Friday, before Biden left Ottawa, he promised they'll get some.
The White House and the Prime Minister's Office announced that companies from both countries will be eligible this spring for money from a $250 million US fund.
Which Canadian companies? The leaders didn't say. Canadian officials have provided the U.S. with a list of at least 70 projects that could warrant U.S. funding.
Biden also said Canadian semiconductor projects would be eligible for access to another Defence Production Act program.
"Our nations are blessed with incredible natural resources," Biden told Canadian parliamentarians during his speech in the House of Commons.
"Canada in particular has large quantities of critical minerals that are essential for our clean energy future, for the world's clean energy future.
"And I believe we have an incredible opportunity to work together so Canada and the United States can source and supply here in North America everything we need for reliable and resilient supply chains."
Canada has also promised billions of dollars to the sector. One participant at a recent Pentagon briefing in Washington said the U.S. funding would reassure potential private-sector investors that a given project has U.S. military backing.
It's not clear which types of jobs these projects would create in Canada.
Biden may have triggered some cringes in Canadian political circles when he appeared to suggest the value-added transformation jobs from this future sector would go to the U.S.
He cast it as an ideal partnership: Canada would extract the minerals, Americans would build things with them.
"You guys – we don't have the minerals to mine, you can mine them," he said. "You don't want to produce, I mean, turn them into product."
Cut the red tape, mining sector says
Another unknown is how quickly this sector will grow in Canada, and whether it can ramp up in time for this country to become a major player in providing raw materials for growing fleets of electric vehicles.
Some business groups have told the Canadian government it must speed up permitting times or risk seeing this window close for Canada.
The Mining Association of British Columbia, for example, has proposed numerous measures to alleviate what it called interminable delays.
"The permitting and authorization processes that regulate mining projects are too cumbersome, untimely and inconsistent with the urgent need," it said in a recent briefing paper.
The federal government has acknowledged this issue and has promised to speed things up.
"It cannot take us 12 to 15 years to open a mine in this country. Not if we want to achieve our climate goals," Environment Minister Jonathan Wilkinson said late last year.