A stark new report has raised a profound national security alarm in Canada, suggesting the country's vast wealth of critical minerals could be weaponised against it by foreign states. The analysis, published by the Institute for Peace and Diplomacy, argues that Canada's strategic resources, essential for modern technology and defence, could paradoxically become a tool for its own coercion.
The Looming Threat of 'Resource Annexation'
The central thesis of the report is deeply concerning. It posits that adversarial nations, through strategic investments and control over key mining projects, could gain enough leverage to effectively hold Canada hostage. This form of economic and political pressure is described as a potential "functional annexation," where a country's sovereignty is compromised not by military force, but by control over its critical resources.
The report specifically highlights the outsized role of state-owned enterprises from nations like China within Canada's mining sector. While foreign investment is crucial for developing these capital-intensive projects, the study warns that when such investment is tied to geopolitical rivals, it creates a dangerous dependency. The concern is that these foreign entities could prioritise their home country's supply chains during a crisis, leaving Canada and its allies vulnerable.
Canada's Strategic Vulnerability
Canada is not just any resource nation; it sits on some of the world's largest reserves of minerals like lithium, cobalt, nickel, and rare earth elements. These are the building blocks for everything from electric vehicle batteries and smartphones to advanced weapons systems. As the global race for these resources intensifies, Canada's deposits have become a focal point of international interest.
However, the report criticises the Canadian government for a fragmented and reactive policy approach. Current reviews of foreign investments, conducted under the Investment Canada Act, are seen as too narrow, focusing on immediate national security threats rather than long-term strategic vulnerabilities. The authors argue that a transaction-by-transaction review process fails to see the bigger picture of cumulative control being established over an entire sector.
The study points to past controversies, such as the 2022 order for three Chinese companies to divest their stakes in Canadian critical mineral firms, as evidence of the existing problem. Yet, it contends such actions are merely treating symptoms rather than devising a comprehensive national strategy.
Calls for a Sovereign Strategic Resource Policy
In response to these identified risks, the report issues a series of urgent recommendations. It calls for nothing less than a fundamental shift in how Canada views and manages its mineral wealth.
The primary proposal is the creation of a new 'Sovereign Strategic Resource Policy'. This policy would actively prioritise Canadian economic security and the resilience of supply chains for its democratic allies, notably through partnerships like the Canada-U.S. Joint Action Plan on Critical Minerals Collaboration. The goal would be to ensure these resources benefit Canada's national interest first and foremost.
Further key recommendations include:
- Establishing a Critical Minerals Security Council to provide coordinated, high-level oversight across government departments.
- Reforming the Investment Canada Act to assess the aggregate level of foreign control in the sector and consider the strategic intentions of state-owned investors.
- Creating a dedicated federal agency or crown corporation to act as a principled investor in key projects, safeguarding them for national purposes.
- Leveraging Canada's pension funds to invest in domestic critical mineral supply chains, aligning national savings with national security.
The underlying message is clear: Canada must stop treating its critical minerals as mere commodities and start viewing them as foundational assets for its future security and prosperity. The time for ad-hoc responses is over, the report concludes. Without a coherent, proactive strategy, Canada risks trading short-term investment for long-term strategic subordination, allowing its greatest natural wealth to become its most significant vulnerability.
