Canadian Critical Minerals Sovereignty Vertical

⚠ This is a flightplan, not a commitment. Flightplans are hypothetical policy proposals modelled in the Ducklings causal simulation. They become projects only when voted into adoption through Consensus. Metrics shown reflect simulation model outputs, not real-world outcomes.

$2.20B CAD

Fiscal Impact

Long-term (5+ years)

Time Horizon

Medium

Implementation Risk

Epoch 100

Continuum Entry

Overview

Capture the processing and manufacturing value-add on Canadian-mined critical minerals rather than exporting raw ore at 5-10% of final product value. Canada mines lithium, cobalt, nickel, graphite, rare earth elements, and uranium — and exports almost all of it as raw concentrate. China processes ~85% of global rare earth elements regardless of origin. The US IRA creates explicit demand for North American processed critical minerals. Canada's rare_earth_value_capture_ratio of 1.1 (raw ore price + 10%) can reach 4.0-5.0 (processed oxides) within 8 years with a sovereign processing investment strategy. Revenue impact: $8-14B/year in new processing revenue on top of existing mining revenue.

Problem Statement

Canada has significant deposits of every critical mineral the 21st century economy requires. critical_mineral_domestic_processing_share is ~5%: Canada exports 95% of mined critical minerals as raw ore or concentrate. The value chain for rare earth elements runs: ore ($10-40/kg) → separated oxide ($100-400/kg) → alloy ($800-2,000/kg) → magnet ($3,000-8,000/kg). Canada participates in the first step and almost nothing else. China controls steps 2-4. The US CHIPS Act and IRA both require North American-origin processed materials for tax credits — this is a $200B+ annual market pull that Canada is not capturing. ev_battery_supply_chain_canadian_content of 8% reflects the same gap: Canada mines the lithium and cobalt but does not process the cathode materials. critical_minerals_processing_revenue of $1.2B/year from a resource base that should generate $12-18B/year is the single most direct expression of Canada leaving money in the ground.

Proposed Approach

Three investment pillars: Pillar 1 — Critical Minerals Processing Crown Equity Fund ($1.2B): federal equity co-investment in domestic processing facilities for the top 6 minerals by value (REEs, lithium, cobalt, nickel, graphite, uranium). 40% equity stake; commercial partners 60%. Processing location preference: northern mining communities, Indigenous partnerships. Pillar 2 — IRA Supply Chain Positioning ($600M): fast-track Environmental Assessment for processing facilities; designate critical mineral processing as Nationally Significant Infrastructure; streamline permits from current 7-12 years to 3-4 years. Align Canadian processing certifications with US IRA domestic content requirements to access US tax credit pass-through on Canadian-processed materials. Pillar 3 — Downstream Manufacturing Anchor ($400M): 10-year offtake contracts from CHIC (F-05 housing steel), CSAIA (D-04 data centre magnets), CSSP (D-02 submarine alloys) to provide demand certainty for new processing capacity. The sovereignty principle: processing must happen in Canada before export. Raw ore export above 50,000 tonnes/year for critical minerals requires federal licence review.

Anticipated Impacts

critical_mineral_domestic_processing_share rises from 5% to 25-35% by Year 5, 45-55% by Year 8; rare_earth_value_capture_ratio rises from 1.1 to 3.5-5.0 by Year 8; critical_minerals_processing_revenue rises from $1.2B to $8-14B/year by Year 8; critical_minerals_raw_export_share falls from 87% to 45-55% as processing scales; ev_battery_supply_chain_canadian_content rises from 8% to 35-45% as cathode material processing develops; fdi_inflows +$4-8B from IRA-motivated US and Japanese investment in Canadian processing; indigenous_community_investment_revenue +$0.8-2.5B as northern processing creates community equity; SYNERGY MAP: D-04 CSAIA uses Canadian REE magnets; D-02 submarines use Canadian alloys; F-05 CHIC uses Canadian steel and wiring; E-01 grid uses Canadian copper — domestic processing feeds every other sovereignty proposal.

Ducklings Simulation

This proposal is active in the Ducklings causal simulation (Epoch 100). The simulation models downstream effects using a BFS cascade engine with strength-weighted, time-delayed edges capped at 3-hop depth and ±25% per-hop limits. Cascade outputs are bounded by variable saturation thresholds.

Domain: Economic Policy | Proposal ID: 202 | Series: E-series

How to Engage

Discuss this flightplan in the Pond forum under Economic Policy. Vote on adoption through Consensus. Adopted flightplans become projects with real-world implementation tracking.

Contact: [email protected]