Canada's Mining Dilemma: Rich in Resources, Lagging in Growth

OTTAWA, ON – May 13, 2026 – Canada's mining sector remains a cornerstone of the national economy, contributing $111 billion to the GDP in 2024, yet it faces a critical juncture where vast potential is being throttled by stagnant growth and mounting competitiveness pressures. A new report from the Mining Association of Canada (MAC), "Facts & Figures 2026," paints a picture of a powerful industry at risk of falling behind, urging immediate government action to streamline project development and attract investment.

The report highlights the industry's immense economic footprint. The mining sector, encompassing everything from extraction to downstream manufacturing, accounted for 3.6% of Canada's economy in 2024. It provided direct employment for 438,000 people and supported another 272,000 indirect jobs, meaning one in every 31 Canadian jobs is connected to the industry. However, these impressive figures mask a troubling trend: the sector has seen almost no real growth in nearly two decades, with its inflation-adjusted GDP in 2024 lingering at the same level as in 2007, a period during which the broader Canadian economy grew by a third.

A Stagnant Giant in a Booming Market

Despite strong global commodity prices and surging demand for minerals, the MAC report reveals a concerning decline in the production of several key commodities over the past decade. Output of copper has fallen by 23% and nickel by a staggering 44% since 2015, while iron ore production has dipped 6%. This decline raises serious questions about Canada's long-term ability to supply its allies with the materials essential for defence, energy, and advanced manufacturing.

"Canada has the minerals and metals the world needs, strong environmental and labour standards, and significant untapped potential," said Pierre Gratton, President and CEO of the Mining Association of Canada, in the report's release. "The challenge now is execution. Canada must improve the efficiency and predictability of project approvals, strengthen trade-enabling infrastructure, and attract investment if we are to compete globally and meet growing demand from allies for responsibly produced minerals and metals."

There are bright spots. Gold production has surged, elevating Canada to the fourth-largest producer globally, with exports averaging $4.3 billion per month in late 2025 amidst geopolitical uncertainty. The nation also remains a world leader in potash and uranium. Projections for future growth in critical minerals like lithium and graphite are positive, but the industry's overall stagnation points to systemic issues hampering its ability to capitalize on a historic opportunity.

The Critical Minerals Crossroads

The challenges facing Canada's mining sector are unfolding against a backdrop of intense geopolitical competition for critical minerals. These materials—including lithium, graphite, cobalt, and rare earth elements—are the building blocks of the global green transition, essential for electric vehicle batteries, wind turbines, and solar panels. Global demand is projected to nearly double by 2040.

This surge has exposed the vulnerability of global supply chains, which are heavily dominated by China. Beijing controls over 60% of the world's refining capacity for critical raw materials and has demonstrated its willingness to use this dominance as a strategic lever, imposing export controls on key minerals like graphite, gallium, and germanium in recent years.

This reality has spurred Western nations to seek out secure, reliable, and responsibly sourced alternatives. With 34 minerals deemed crucial for the energy transition and vast untapped reserves, Canada is uniquely positioned to fill this role. In response, Canada launched the G7 Critical Minerals Production Alliance in June 2025, an initiative aimed at fostering resilient supply chains among trusted partners. As of October 2025, the alliance had spurred measures expected to accelerate $6.4 billion in Canadian critical minerals projects, including securing offtake agreements for graphite and scandium.

Ottawa's Multi-Billion Dollar Gambit

The federal government has acknowledged the urgency, rolling out a series of ambitious policies and funds under its $3.8 billion Critical Minerals Strategy. Budget 2025 introduced significant new measures, including a $2 billion Critical Minerals Sovereign Fund to make direct equity investments in strategic projects and a $1.5 billion "First and Last Mile Fund" to address crucial infrastructure gaps in the supply chain.

Furthermore, Ottawa has expanded tax incentives, making 12 additional minerals like manganese, molybdenum, and tungsten eligible for the Critical Mineral Exploration Tax Credit. The government's Major Projects Office has also prioritized five critical mineral mines, including the Crawford and Matawinie projects, for accelerated federal coordination, with these projects alone projected to generate over $60 billion in economic activity.

The success of these initiatives, as MAC points out, will depend entirely on the speed and effectiveness of their implementation. The industry is advocating for further measures, such as making feasibility studies eligible for exploration tax credits, to further accelerate development.

The Permitting Puzzle and Indigenous Partnership

At the heart of the industry's competitiveness challenge lies a complex and often lengthy regulatory process. Mining projects in Canada must navigate multiple layers of provincial and federal approvals, a system that industry leaders argue creates uncertainty and delays investment. MAC's report calls for improved coordination between governments to reduce duplication while maintaining high environmental standards and respecting Indigenous rights.

Some provinces are already moving to address this. Ontario, for example, passed its "Protect Ontario by Unleashing Our Economy Act" in 2025, introducing a "One Project, One Process" framework designed to cut permitting timelines for advanced mining projects by up to 50%.

Beyond regulatory reform, the future of Canadian mining is inextricably linked to its relationship with Indigenous communities. The industry is already one of the largest private sector employers of Indigenous peoples, providing over 22,600 jobs in 2024. There are more than 500 active agreements between mining companies and Indigenous communities across the country.

This relationship is evolving from transactional impact-benefit agreements towards more profound equity partnerships, where communities hold a direct economic stake in projects. This shift aligns with the federal government's commitment to advancing reconciliation and ensuring Indigenous peoples are meaningful partners in resource development, a key pillar of its Critical Minerals Strategy. As Canada strives to unlock its mineral wealth, ensuring these projects deliver shared prosperity and respect Indigenous rights will be as critical as the minerals themselves.