On Tuesday, Ottawa announced during the presentation of its annual budget a 30% tax credit for the manufacture of clean technologies and the extraction, processing or recycling of critical minerals.

A way for Canada to accentuate a shift that is already well underway. In two years, the country has recorded more than $ 18 billion of investments in the electric battery sector, giving a boost to the country's automotive industry, devastated since the departure in recent decades of many factories to Mexico, cheaper.

The latest announcement came from Volkswagen, which will build its first battery plant outside Europe in the province of Ontario, becoming the first new automaker to set up shop in Canada in 35 years.

"This is not just a new chapter. It's almost a new book we're writing about the auto sector in Canada," Industry Minister Francois-Philippe Champagne said after the announcement in early March.

Aerial view of the Sayona factory, in La Corne, Canada, July 20, 2022 © Handout / SAYONA / AFP

Several other heavyweights in the sector have also chosen Canada to establish themselves on the North American market, such as the manufacturer Stellantis, associated with the Korean LG, the French tire manufacturer Michelin, the American General Motors...

"Canada has moved from fifth to second place in the world in terms of our battery supply chain," Prime Minister Justin Trudeau boasted recently, referring to the latest ranking by the research firm BloombergNEF, which places Ottawa just behind Beijing.

The country owes this position to its "significant raw material resources" and green supply chain, the report says.

"Manufacturing the greenest vehicle in the world is really our intention to attract more investment," said Minister François-Philippe Champagne, at a time when many countries want to emancipate themselves from the stranglehold of China, which produces 75% of the world's lithium batteries.

- The advantage of critical minerals -

For specialist Sarah Houde of Propulsion Québec, a company that supports players in the sector, Canada's main argument is that it is "one of the only countries in the world that has all the minerals necessary for the production of batteries".

Used batteries at the Lithion plant in Montreal, Canada, January 17, 2023 © Mathiew LEISER / AFP

According to the International Energy Agency, demand for essential minerals could quadruple or even increase six-fold by 2040.

"Being close to the main market but also to the source of supply is essential for us," explains Brett Lynch, CEO of the Australian mining company Sayona, which has just set up in Quebec to develop one of the first lithium extraction projects.

Another reason, and "probably the most important", lies in Quebec hydroelectricity, adds the leader.

"Nowhere else on this planet is there such generous, cost-effective and low-polluting green energy," he said. According to provincial data, 99% of the energy produced in Quebec is clean.

- A circular economy -

The government is also investing in the recycling of electric batteries in order to develop a circular production chain.

Several plants are already in place in Canada that recycle 95% of the strategic metals present in a battery while using "97% less water than extraction and refining per ton of battery material" and polluting less, says Louie Diaz, of recycling company Li-Cycle.

The other asset of the Canadian industry is its access to the billions announced by Washington for electric vehicles, batteries and renewable energy projects.

An employee of Sayona in La Corne, Canada, July 20, 2022 © Mathieu Dupuis / SAYONA / AFP

Li-Cycle thus benefited in February from a conditional investment from the Pentagon of 375 million US dollars (346 million euros).

But these American investments also remind us how much Canada, whose financial impact is much less than its neighbor, will have to maintain a "sustained, accelerated pace," says specialist Sarah Houde, if it does not want to "be taken by surprise by other countries".

© 2023 AFP