Canada Could Be a Critical Minerals Powerhouse
Think about the smartphone in your hand. It’s an essential part of modern life, packed with versatile features and incredible computing power. What many Canadians don’t realize is that smartphones depend on resources found right here in Canada: copper, lithium, tin, cobalt, rare earths and more.
These are among the 34 rare-earth minerals that the federal government has designated as critical—vital to our economy and crucial for technologies needed in our transition to a low-carbon future. While we’re world leaders in extracting these resources, we fall short when it comes to capturing their full economic value. Instead of manufacturing the high-tech products that rely on these materials, we mine the raw minerals, ship the bulk of them abroad and then buy back the finished goods at a premium.
We don’t manufacture smartphones here. Instead, we import major brands from countries like China, Japan and South Korea. Canada exports more than $60 billion of critical minerals annually. Meanwhile, the global smartphone market alone is valued at $750 billion. It’s a missed opportunity, lost through decades of economic complacency. We largely take the easy route—selling our critical minerals overseas for a quick profit—while other countries reap most of the economic rewards.
In contrast, the Asian countries we import our smartphones from took a very different path to economic success. After the Second World War, they transformed their agrarian economies into global materials and manufacturing powerhouses through long-term, export-focused industrial strategies. South Korea, for example, didn’t become an economic juggernaut overnight. As recently as the 1960s, it was one of the poorest countries in the world. But through a sustained effort, it built domestic champions like Samsung—now a global powerhouse in everything from electronics to shipbuilding.
Where’s our Canadian Samsung, or Hyundai, or LG? Nowhere to be found. This complacency goes beyond smartphones to other important modern technologies that rely on our critical minerals, like electric vehicles and the infrastructure used to power artificial intelligence—processors, servers and data centres. As a result, we depend on other countries to supply us with even the most basic consumer goods. This dependency makes our economy incredibly vulnerable, as the ongoing trade war with the United States has made abundantly clear.
To end this economic complacency, we can’t simply mine and ship most of our critical minerals. We must build a domestic supply chain that transforms our critical minerals into finished products—right here, within our borders. Our ultimate goal should be nothing less than becoming a leading manufacturer of the technologies of the future. The federal government has outlined as much in its Critical Minerals Strategy, announced in 2022. But this strategy was backed with a paltry $4 billion. That’s nowhere near enough. Realizing these ambitions demands hundreds of billions in investment, guided by a cohesive national strategy that spans decades and transcends election cycles.
In formulating this national strategy, we can draw inspiration from countries like China and South Korea. Some might argue that Canada’s relatively small domestic market makes establishing a complete critical minerals supply chain unrealistic. But South Korea—despite having a population comparable to ours—developed industrial strategies that produced globally dominant companies. Not only do these companies meet domestic needs in key economic sectors, but they also sell their products to markets around the globe.
We need to match the level of support that the South Korean government provides to companies like LG, Hyundai and Samsung. Canadian companies and investors will be reluctant to build domestic critical mineral and materials processing plants or manufacturing facilities if they don’t see stable and consistent policy backing. One-off investments or isolated initiatives won’t cut it. We need coordinated, policy-driven subsidies, tax incentives and public-private partnerships designed to create fertile ground for Canadian start-ups to sprout and thrive.
In 2023, the federal government granted billions in subsidies to Volkswagen to support an EV battery plant in southern Ontario that’s expected to become operational in 2027. But imagine if that money had gone to funding Canadian firms to research, manufacture and sell batteries that were just as innovative—or even better. The government funding is clearly there. With a national strategy, it could be directed to truly serve Canadian interests and send a clear message to domestic scientists, entrepreneurs and investors: if you build here, you’ll have the infrastructure, talent, clean energy and market reach to succeed.
Next, we can take an ambitious page out of China’s playbook by creating hyper-focused manufacturing and resource processing hubs. Since the 1980s, the Chinese government has invested countless billions in developing new cities that function as dedicated economic zones. One of the earliest and most successful examples is the city of Shenzhen, which has transformed from a market town with less than 100,000 people into a sprawling metropolis of nearly 18 million. Currently, it’s a hot spot for international trade and home to one of the world’s largest stock exchanges.
This strategic investment continues today. Take Unicorn Island, an upcoming 166-acre tech hub in southwestern China, designed to accommodate 70,000 researchers, workers and residents. It’s set to function as an incubator for next-generation tech giants in fields like IT and digital entertainment. These hubs become innovation ecosystems where research, production and workforce development coexist and support each other.
Canada is vast, and our resources are spread out, but we can still concentrate our efforts where they’ll have the most impact: focusing on AI infrastructure, electric vehicles and renewable energy, for example. These hubs could also be strategically located near critical resources—minerals, human and energy, infrastructure—to minimize transportation costs and input and output costs and streamline processing. By clustering related industries and educational institutions in the same area, we can build our own integrated economic ecosystems. This model doesn’t just generate jobs; it builds economic strength and fosters a long-term culture of innovation. We won’t just be making the smartphones of today—we’ll be inventing and exporting the groundbreaking technologies that define the future.
But making this national strategy a reality won’t be possible unless we rethink how we see ourselves as a society. For too long, Canada has defined itself as a supplier of raw materials, a country that digs things up and sends them out. But that’s not how you build a durable, innovative economy. We need to adopt the same mindset that South Korea embraced in the 1960s: relentlessness in the pursuit of building value at home.
Canadians must recognize that establishing a complete domestic critical minerals supply chain isn’t just an economic opportunity—it’s a strategic imperative. We’re not just competing with China or the United States. We’re battling our own complacency, the mindset that says we can’t do it. We can’t afford to keep seeing ourselves solely as the miner. We need to become the manufacturer, too.
Ian M. London is the executive director of the Canadian Critical Minerals & Materials Alliance
