Fasken’s lawyers are producing a series on the role of critical minerals in energy transition from a Canadian perspective, bringing fresh insights on issues of mining, energy, environmental, Indigenous, climate change, tax, and national security. In the first and second instalments of this series, we examined the role of the Canadian federal government and of the Province of Québec. In this third instalment, we examine the initiatives taken by the Province of Ontario, the most active mining jurisdiction in Canada.
The Province of Ontario has not yet developed a concrete plan respecting critical minerals, but with the aim of doing so, it has released a Framework Discussion Paper on Critical Minerals. 
Ontario’s Draft Critical Mineral List:
- Exploration Potential: Antimony, Beryllium, Bismuth, Cesium, Fluorspar, Manganese, Molybdenum, Phosphate, Rare Earth Elements, Tantalum, Tin, Titanium, Tungsten, Vanadium and Zirconium
- Advanced Mineral Projects: Barite, Chromite, Graphite, Lithium, Magnesium and Niobium
- Producing: Cobalt, Copper, Indium, Nickel, Platinum Group Elements, Selenium, Tellurium and Zinc
- Currently Processing Only: Uranium
Citing the World Bank Group report, Minerals for Climate Action: the Mineral Intensity of the Clean Energy Transition, the discussion paper states that production of graphite and lithium would need to increase by almost 500% by 2050 to meet prospective demand.
The discussion paper also cites a report from the European Union, Study on Future Demand and Supply Security of Nickel for Electric Vehicles Batteries, which indicates that the demand for nickel used for automotive electrification is expected to grow globally from the 92 kilotonnes used in 2020 to 2.6 megatonnes in 2040. The paper adds that Ontario produces the lowest carbon nickel in the world and that nickel not mined in Ontario contributes to increased carbon emissions.
Ontario is already a producer of several critical minerals identified in other jurisdictions as being in high demand such as nickel, gold, copper, zinc and the platinum group elements.
In 2019, Ontario produced over $10 billion worth of minerals, accounting for 22% of Canada’s total mineral production. There are currently 40 mines operating in Ontario and critical minerals are produced at ten of them.
As we noted earlier, Ontario is already a producer of nickel, copper, zinc, platinum group elements, cobalt, selenium, tellurium and indium. Other critical minerals have been produced in the past or occur in deposits that are currently being developed for possible future production, including barite, chromite, fluorspar, graphite, lithium, magnesium, niobium, phosphate and uranium.
Among the key areas of focus for a critical mineral strategy, the discussion paper emphasizes supporting partnership opportunities with Indigenous communities:
Ontario believes that the responsible development of natural resources will continue to build stronger, healthier, and more prosperous communities across Ontario. Collaborating on resource development projects can advance reconciliation and can support Indigenous communities, industry and other partners to work together towards a shared understanding of local projects, and broader initiatives that support skills training, capacity building and improved economic development opportunities.
Ontario believes that local communities should benefit from resource development activity and is committed to working with First Nations and Métis organizations to make that happen. An Ontario critical minerals strategy would support Indigenous communities in proximity to resource development to further participate and share in the various benefits of responsible resource development, helping to build stronger, healthier and more prosperous communities across Ontario.
The development of the strategy will consider, in conversation and partnership with Indigenous communities, how communities can:
- Meaningfully participate in and benefit from the economic opportunities and jobs provided by sustainable resource development.
- Be part of collaborative relationships with the private sector to optimize those benefits.
Across Ontario, ministries continue to work on initiatives towards reconciliation and are committed to creating real and positive change, working together with Indigenous communities. 
Ontario has created a draft critical minerals list that includes the following four categories:
1. Exploration potential: Critical minerals that have demonstrated exploration potential in Ontario.
2. Advanced mineral projects: Critical minerals that have a reasonable prospect of being developed in Ontario in the near-term (within five years).
3. Producing: Critical minerals that are currently being commercially produced by operating mines in Ontario
4. Processing: Smelting and refining of ores, concentrates and other intermediate critical mineral/metal products that were not originally mined in Ontario. 
Interestingly, the discussion paper states that Ontario’s proposed list of critical minerals should be aligned with the lists of other jurisdictions in order “…to better position the Province to collaborate with businesses and other levels of government to capitalize on the growing global demand for critical minerals.” 
Tax Credit | The Ontario Focused Flow-Through Share Tax Credit
This tax credit helps stimulate mineral exploration in Ontario by improving access to capital for small mining exploration companies. Flow-through shares provide shareholders with a refundable tax credit of five per cent of eligible Ontario mineral exploration expenses. Many Ontario mineral exploration companies rely on this tax credit, which has made several exciting discoveries in Ontario possible.
Ontario also plans to enhance investments and mineral exploration and development.
One initiative is to help mining companies manage energy costs through a program known as the Northern Industrial Electricity Rate (NIER) Program, which helps northern Ontario’s largest industrial electricity consumers, including mining companies.
The program has existed since April 1, 2010 and has been extended for several successive terms by the Ministry of Northern Development and Mines (MNDM). Since inception to completion of the most recently renewed term, the program has provided approximately $796 million in electricity rebates to eligible large industrial companies located in Northern Ontario. The NIER program was renewed on April 1, 2017 for a five-year term which ends on March 31, 2022.
Qualifying participants are provided with an electricity cost rebate of two cents per kWh of electricity. New applicants are required to directly own and control eligible facilities located in Northern Ontario, that consume a minimum of 50,000 MWh of electricity per year. Participation is subject to the preparation and implementation of an energy management plan (EMP) in which participants detail steps to be taken to improve electrical efficiency and sustainability. EMP’s detail opportunities for energy cost reduction and the potential for self-generation, describing investments made in adaptive technologies, the reduction of greenhouse gas emissions and ongoing measures undertaken to improve energy efficiency.
Ontario also plans to reduce average electricity costs for medium and large industrial commercial employers through a Comprehensive Electricity Plan. Beginning on January 1, 2021, the province removed certain costs from industrial electricity bills, resulting in average savings of 14% for qualifying metal ore mining employers. This initiative is in addition to other programs to provide cost relief to eligible companies.
Regarding regulatory and policy reform, the discussion paper states that Ontario will explore policy, regulatory and legislative approaches to reduce regulatory burdens and improve regulatory certainty to advance critical minerals exploration and development and the province, while respecting Aboriginal and treaty rights.
Finally, on the issue of supply chain and manufacturing opportunities, the discussion paper states that the province will explore opportunities to advance Ontario’s competitive advantage for critical minerals on the national and international stages. The discussion paper singles out electric batteries:
An Ontario critical minerals strategy would also advance Ontario’s competitive advantage on the national and international stages by highlighting the potential to create supply chains within the province. Ontario’s geography, resource development expertise, mineral processing capacity and manufacturing ability could be leveraged to keep large sections of supply chains right here in Ontario. This includes extracting and processing minerals to create components for electric vehicle batteries that could be manufactured in Ontario. Linking the mineral sector with innovation and manufacturing sectors is an essential part of a successful critical minerals strategy. Ontario’s critical minerals strategy will also help inform other key government initiatives that promote economic development in the province.
To date, clean technology is one area the Ontario government has focused investment, including a recent $295 million matching investment with the Government of Canada to retool Ford Canada’s Oakville Assembly Complex. Coupled with other announcements, like General Motors Co nearly $800-million investment to bring production of the BrightDrop EV600 electric vehicle to its CAMI manufacturing plant in Ontario, these and other steps are crucial to securing future investments across the battery electric vehicle (BEV) supply chain. 
The Ontario government is looking for output from stakeholders on the discussion paper. The date for the release of the strategy is unknown.
One little side-note is the requirement in the Ontario Mining Act, s.91(1) which provides that “all lands, claims or mining rights patented, leased or otherwise disposed of under this or any other Act or by any authority whatsoever are subject to the condition that all ores or minerals raised or removed therefrom shall be treated and refined in Canada so as to yield refined metal or other product suitable for direct use in the arts without further treatment”. With respect to critical minerals, Ontario could use this provision to its advantage to ensure further processing in Ontario, or, if in another province, then an agreement with that province for reciprocal processing of critical minerals from that province in Ontario.
In the next instalment of this series, we will examine what British Columbia has done to catalyze the exploration and production of critical minerals.
 Available online:
[Ontario Framework Discussion Paper]
Also available in French:
 Ontario Framework Discussion Paper, page 13
 Ontario Framework Discussion Paper, page 14
 Ontario Framework Discussion Paper, page 15
 Ontario Framework Discussion Paper, page 25