Canada has big ambitions to build one of the world’s powerhouse supply chains for EV and battery technology. In 2022, the government released its Critical Minerals Strategy—a road map toward making our country a leading global supplier of materials needed for renewable energy and high-tech products. It’s backed by $3.8 billion in industry supports, such as mining research and infrastructure, and new roads into remote but mineral-rich areas. In 2024, we’re going to learn if all these efforts are paying off—or if we need to redouble them.
The opportunity is enormous. The number of EVs on the road is rising quickly. In 2017, fewer than one per cent of new vehicle registrations in Canada were for EVs; by the third quarter of 2023, that figure was 13 per cent. But other countries are also in the running to become major players in the EV business, leaving Canada in a high-speed race.
We’re starting from a good position, at least. In 2022, GM opened its first full-scale Canadian EV plant in Ingersoll, Ontario. Four companies have recently invested in massive battery plants in Canada: E-One Moli in Maple Ridge, B.C.; Volkswagen in St. Thomas, Ontario; Stellantis in Windsor, Ontario; and Swedish battery developer Northvolt, which announced a $7-billion plant east of Montreal. Northvolt chose Quebec in part because of its access to abundant, clean hydroelectricity. We also have the sixth-largest proven reserves of lithium in the world, as well as significant amounts of other minerals that are critical in battery cell production, like nickel and cobalt. Altogether, Clean Energy Canada’s research shows that our country’s EV supply chain could support up to 250,000 jobs by 2030 and add $48 billion to the economy annually.
But in 2024 and beyond, we’ll need to address our weak spots, and fast. For example, we need to improve the efficiency of permitting and impact assessments for major mining projects. This must be done in environmentally and socially responsible ways, with the support of remote and Indigenous communities. We also need to address the huge expense of extraction. We struggle to mine and refine lithium because most of our reserves are found in hard rock, and are often located in remote areas, inaccessible by road. That makes them costlier to extract, so even with our abundant reserves, nations like Brazil and Portugal produce more lithium than we do, despite having smaller reserves.
This year, we’ll see if our bottleneck can start to clear with government support. The Critical Minerals Strategy includes $1.5 billion in funding for infrastructure investments in our mineral supply chain, with a focus on high-priority deposits like lithium, graphite, nickel, cobalt and copper. I anticipate more companies setting up in Canada, but a boom won’t happen overnight; in fact, it will only happen if EV and battery facilities can get the right workers with the right skills. Fortunately, there’s already headway on this. The B.C. government is creating a college program for EV technicians, and the federal government recently funded a national program, to be delivered through colleges, so workers can upgrade their skills for emerging fields like clean tech.
This year will also give us a better sense of how much governments will support homegrown clean tech and battery companies. I want to see them fund Canadian startups like Nano One Materials and E3 Lithium, which make materials for lithium ion batteries, and battery-recycling companies like Lithion Technologies and LiCycle, which prevent battery cells from going to landfills. The key will be to balance foreign investment with Canadian companies.
Luckily, EVs appear to be a rare subject on which the major political parties see eye to eye, probably because of the huge economic benefits they bring. Ontario secured enough money to attract the Volkswagen and Stellantis gigafactories because Doug Ford’s Progressive Conservatives partnered with the federal Liberals, and that’s encouraging. But collaboration like this could be in jeopardy in 2024 if EVs become politicized. Already, Donald Trump has said EVs will destroy the auto industry. If EVs become a flashpoint in the culture wars, we’ll all lose.
The federal government wants every car sold in Canada to be an EV by 2035. That can happen; the industry is enjoying a network effect now that they’re becoming widespread. As people see others driving EVs, they’ll become more common, more accepted, more normal. Competition between brands will lower prices. Canada now stands on the precipice of a remarkable economic opportunity. If we lean into it, we’ll all get to share in the spoils.
This post first appeared on Maclean’s the Year Ahead 2024.
