Supply chain woes in construction have sent prices skyrocketing and disrupted countless projects.
The federal budget aims to boost spending on specific sectors, including minerals and semiconductors as well as invest in improvements to the nation’s entire supply chain network.
Digging into the mineral sector
“Critical minerals are central to major global industries like clean technology, health care, aerospace and computing,” reads the budget. “They are used in phones, computers and in our cars. They are already essential to the global economy and will continue to be in even greater demand in the years to come. Canada has an abundance of a number of valuable critical minerals, but we need to make significant investments to make the most of these resources.”
Ottawa noted its investments will contribute to the development of a domestic zero-emissions vehicle value chain, including batteries, permanent magnets and other electric vehicle components. The investments will begin Canada’s Critical Minerals Strategy.
The budget is also looking to de-risk mining projects for investors as risks can often include remote locations, changing prices and lengthy regulatory processes.
These items include:
- Up to $1.5 billion over seven years for infrastructure investments that would support the development of the critical minerals supply chains, with a focus on priority deposits.
- $79.2 million over five years on a cash basis for Natural Resources Canada to provide public access to integrated data sets to inform critical mineral exploration and development.
- The introduction of a new 30 per cent Critical Mineral Exploration Tax Credit for specified mineral exploration expenses incurred in Canada and renounced to flow-through share investors.
Additional funding will go towards promoting sustainable mining practices including working with Indigenous groups.
Ottawa also intends to spend more than $50 million to support projects as they move through the complex mining regulatory processes.
Semiconductors, also referred to as microchips, are another focus of the budget. These are used in cellphones, computers, cars and countless other products that utilize computing technology. Budget 2022 will spend $45 million to engage with stakeholders, conduct market analysis and support projects that will strengthen Canada’s semiconductor industry.
B.C. underscores infrastructure importance
B.C.’s catastrophic floods from late last year had a significant impact on federal officials. The budget stated the flooding “reinforced the importance of our highways, railways and ports as the backbone of our transportation system.” The budget noted officials are working to develop a National Supply Chain Strategy.
Budget 2022 proposes to provide $603.2 million over five years for Transport Canada, including:
- $450 million to support supply chain projects through the National Trade Corridors Fund.
- $136.3 million over five years to develop industry-driven solutions to use data to make supply chains more efficient.
- $16.9 million over five years to cut red tape, including working to ensure regulations across various modes of cargo transportation work effectively together.
“These investments will help lower prices for Canadians; make our supply chains stronger; improve the ability of Canadian businesses to export their goods abroad; and deliver essential goods to our communities,” reads the budget.
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