Recommendations to advance Canada’s battery industry

Batteries are a critical technology in the energy transition and will enable low-cost decarbonization of the transportation and power sectors. Canada, with our abundant critical mineral resources, a legacy of battery innovation and significant recent public investments in battery production, has the potential to establish itself as a world leader.

A robust battery industry would bolster Canada’s innovation economy at a time of industrial and geopolitical transition and safeguard recent investments in the electric vehicle supply chain. Made-in-Canada battery solutions can underpin Canadian advancements in energy storage, artificial intelligence, and national defence – all of which will require the types of batteries we can develop and manufacture domestically.By progressing this industry, Canada can further diversify our trade and support our allies through defence applications of domestic Canadian battery technologies.To help realize this future, Accelerate convened leaders from Canada’s battery industry to develop recommendations for the federal government to help establish the conditions for Canada’s battery sector to develop at pace.

Specifically, we urge:

1

The Minister of Industry in partnership with the Minister of Natural Resources support a National Battery Alliance, convened in coordination with industry, provinces and territories. This Alliance will serve as a strategic public-private coordinating body, with a mandate to deliver a Canadian battery industry roadmap by the end of 2025 that serves a diverse set of stakeholders and lithium-ion battery applications in automotive, energy storage and defence.

Canada has already invested significantly in battery manufacturing and, while attracting gigafactories through foreign direct investment provides an anchor for this industry, Canadians want assurances that these investments will support wider economic goals.A Canadian Battery Alliance would demonstrate that Canada is committed to best international practice and would guide the long-term development of Canada’s battery industry with a focus on ensuring cost-competitiveness, scalability, resiliency, and sustainability of the Canadian battery industry, at all stages of project development, from R&D to construction to operation of industrial facilities.

2

The Ministers of Industry and Finance finalize and activate a financing strategy, as part of Budget 2025, that supports the entire battery supply chain in Canada. The strategy will serve a wide range of stakeholders in research and development, pre-revenue, growth stage and major battery industry players, and in publicly and privately funded entities. This strategy should focus on catalyzing growth domestically across the entire supply chain. It will:

Revise, streamline and implement funding models that support the development of efficient and competitive supply chains, specifically in the refining, processing and transformation of critical battery minerals into precursors and functional materials, and that also complement and support advanced battery research, battery materials production, and battery manufacturing.
Revitalize and leverage Canadian capital markets with finance tools that re-direct capital and headquartering back into Canada, including:

- Extending flow-through shares from mining, where it has driven billions in investment, into downstream projects.
- Extending tax-credits, tax-deferrals, and additional capital gains allowances to those who invest in Canadian listed battery and energy sector companies.
- Collaborating with Canadian investment regulators to eliminate predatory and manipulative trading practices that harm the capitalization and stunt the growth of earlier stage companies.

Empower government officials with discretionary authority to approve fast-track funding for battery projects, targeting decisions within 120 days of submission.

- Use quarterly or bi-annual public performance reviews, based on KPIs and milestones, to evaluate disbursement speed and economic impact of the financing strategy.

Implement government procurement policies that prioritize Canadian-made battery products that source from Canadian supply chains, providing a stable market for domestic manufacturers.
Adapt funding programs to ensure funds are available earlier in project development timelines, and to support cashflow needs in advance of meeting milestones, aiming at providing support when it matters most.
Launch a pilot investment fund under the Venture Capital Catalyst Initiative, prioritizing startups in the battery ecosystem to develop stronger integration between Canada’s venture capital and battery industries.

3

The Minister of Industry complete a National IP Strategy for Batteries that includes targets for patent and broader intellectual property development, funding for Canadian scale-up projects, and measures to support partnerships between major battery industry players and Canadian innovators. It will:

Launch a patent incentive fund to accelerate filings.
Match Canadian start-ups with global battery leaders for co-development grants.
Encourage knowledge and technology transfer from advanced battery jurisdictions, including within existing battery investments.
Track and report on IP development benchmarks with a goal of reaching 1000 new Canadian patents in battery technology by 2035.

4

The Ministers of Industry and National Defence launch a Defence Battery Innovation Stream to fast-track battery supply chain development within Canada. This program will increase Canada’s commitment to the defence of our borders and sovereignty and contribute to our commitments with our allies.

A strong battery industry and defence battery R&D pipeline will support Canada’s military, including the priorities of securing the Arctic and increasing military self-sufficiency. Increases in battery performance, longevity, cold weather capabilities, and different material make-up of batteries are all potential benefits for Canadian Armed Forces operations. Furthermore, the Defence Battery Innovation Stream would position Canada as a supplier of battery materials and battery technology to our allies. The EU, for example, is seized with modernizing and strengthening its military and security posture. Canada can be an important ally in this effort.