The investment gap

Precious metals continue to set new records, fuelled by a weaker dollar, inflationary pressure, global conflict, supply constraints and surging industrial demand. Yet even as critical minerals and rare earths attract growing global investment, Canada’s mining sector still struggles with significant investment shortfalls. According to the Canadian Climate Institute, Canada needs $30 billion in new investment over the next 15 years to meet domestic demand, and $65 billion over the same period to meet global demand. By comparison, $1.9 billion was spent on critical minerals exploration in 2023, up just 7 percent from the year before. At this pace, Canada is barely on track to meet domestic needs, and that is before accounting for rising costs and inflation.

Canada risks losing tens of billions of dollars in economic activity if projects and investment fall short. The strategic risks are even greater. If Canada fails to become a reliable supplier of the materials that modern technology and advanced military systems depend on, it leaves itself and its allies more exposed to China’s growing economic leverage. With the world order in flux, control over these resources will shape the strategic autonomy of Canada and its allies.

A misleading reputation

Canada holds massive reserves and is often seen as a global leader in minerals and metals, but that perception is misleading. Canada excels in a select group of minerals, rare earth elements and precious metals, and those strengths tend to overstate its overall position. In reality, China controls nearly every critical chokepoint in refining and separation. According to the International Energy Agency, China is the dominant refiner for 19 of the 20 energy-related minerals it tracks, with an average market share of around 70 percent, and it refines about 91 percent of the world’s rare earths.

In April 2025, China introduced a strict export licensing system for seven key rare earth elements. The move, a direct response to U.S. tariff increases, quickly exposed how dependent the American tech and defence sectors are on Chinese supply. On its current trajectory, China’s leverage over the technology sector will only grow.

Critical minerals are a defence issue

The war in Ukraine has shown how quickly modern battlefields are evolving. Conflicts are increasingly shaped by three things: innovation, secure supply chains for defence-critical materials, and a strong manufacturing base. Canada is not a global leader in innovation or manufacturing, but it has a unique opportunity to become the leading alternative to China in critical mineral supply chains.

That opportunity also places Canada at the centre of competing powers seeking global influence and military dominance. How Canada positions itself now will determine its standing in the new world order. NATO allies and other like-minded middle powers will look to secure supply chains with Canadian resources, especially as China continues to weaponize supply and raise the cost and risk of Western decoupling.

Pressure from the south

The United States has entered a state of urgency, rushing to secure every resource within its reach. The current administration has been unusually explicit about its intention to assert control over the Western Hemisphere. Its National Security Strategy, released in December 2025, revives the Monroe Doctrine, rejects outside influence in the region and makes access to critical supply chains a priority.

This puts Canada in a difficult position, because any significant alignment with China could trigger a harsh American response. A direct attempt to seize Canadian resources seems unlikely for now. Still, the idea may be tested as the administration probes the limits with Greenland, especially since Canada is already America’s largest minerals trading partner and produces 10 of NATO’s 12 defence-critical raw materials.

Changing the frame

Ottawa still talks about critical minerals and rare earths mainly as a way to meet demand from decarbonization and the green transition, not as a matter of defence and national security. Those points are valid, but the framing drains the urgency from these projects. It also overlooks the reality that Canada faces real foreign threats from Russia, China and, increasingly, the United States.

Canada does not have 20 years to work out the direction of its resources, energy and military. Yet mines in Canada take 18 years on average to get up and running, and that is not good enough. Reducing the risk for private investment will require federal and provincial governments to act decisively, alongside bold partnerships with Europe and other allies.

Canada already has what its allies need. What it lacks is urgency. Treating critical minerals as a national security priority, and not only a climate one, is how that starts.