Op-Ed: What Canada’s Sovereign Wealth Fund, Defence Industrial Strategy mean for miners  

Two recent federal initiatives – the launch of the Canada Strong Fund, Canada’s first national sovereign wealth fund, and the federal government’s Defence Industrial Strategy – together signal a material shift in how mining projects may be financed, prioritized and regulated going forward.   

These initiatives reflect an increasingly strategic view of critical minerals as national assets, not just commodities, with implications across capital markets, project development, supply chains and governance. Cassels is focused on what mining companies and industry participants need to know about these developments and how they intersect. 

Sovereign capital for projects of national interest 

The Canada Strong Fund (the Fund) was announced on April 27, 2026 as Canada’s first sovereign wealth fund, with an initial endowment of C$25 billion to be invested over three years, and a mandate to invest in major projects of national interest in partnership with the private sector. The federal government has identified critical minerals as a priority sector for early investment. 

Unlike grants or tax incentives, the Fund is intended to operate as a long-term investment vehicle, with the ability to recycle returns into future projects. 

The Fund will be situated within an ecosystem of federal financing and other support tools, like the Canada Infrastructure Bank, Export Development Canada, Canada Growth Fund, Business Development Bank of Canada, Canada Indigenous Loan Guarantee Corporation and other government programs, and the work of the Major Projects Office in streamlining processes for priority projects under the Building Canada Act. 

Meaningful equity participation by the federal government is now a real possibility, particularly for large, capital‑intensive critical minerals projects. Federal participation may increasingly take the form of equity investment or partnerships, not just loans, grants and tax incentives. 

By sitting alongside existing federal finance tools and other supports, the Fund enables more efficient, stackable government capital, allowing projects to align equity investment, debt, and regulatory support within a coherent financing pathway. 

For issuers, the Fund will function more like a strategic/financial sponsor than a subsidy provider, which will be helpful for de-risking projects, providing project credibility, closing funding gaps and accelerating timelines.  Companies should be prepared when considering access to the Fund to demonstrate disciplined capital allocation, a credible pathway from equity investment to project-level financing and have a solid basis for why the project is capable of supporting long-term institutional capital. Project narratives should be aligned to the Fund’s stated priorities (e.g., mining/critical minerals, infrastructure adjacency, advanced manufacturing linkages) and should articulate strategic rationale in plain terms (jobs, resilience, supply chains, trade diversification). 

While further details of the Fund will be published in the coming months, mining companies should anticipate and be prepared to address enhanced diligence expectations (including relating to Indigenous engagement, permitting status, procurement/supply chain, and execution capability), increased scrutiny on how projects align with broader policy objectives and potential sensitivities around foreign ownership, and should consider and stress-test potential implications of public capital against long-term strategic objectives.  

Having projects “Fund ready” will be critical as capital allocations from the Fund start to be considered.  

Defence Industrial Strategy: Critical minerals as a security priority 

In February 2026, the Government of Canada also announced the launch of a sweeping Defence Industrial Strategy (the Strategy), aimed at strengthening Canada’s defence industrial base, securing critical supply chains, and ensuring long‑term military and economic resilience. An overview of the Strategy is here. 

Among the five pillars of the Strategy, securing supply chains for critical minerals features prominently.  The Government has indicated it will bring forward plans to expand the production, processing, stockpiling, and procurement of defence-critical minerals, while supporting coordinated action with allies through initiatives such as the G7 Critical Minerals Production Alliance and NATO-led efforts.   

With Canada producing 10 of the 12 NATO-identified defence-critical raw materials, there is significant opportunity for mining companies and industry participants that can align their capabilities to support delivery of the Strategy. 

What this means for mining companies 

The Strategy explicitly elevates critical minerals from commercial inputs to national security assets, tying mining, processing, and supply reliability directly to defence readiness and allied commitments. Projects producing defence‑relevant minerals will be assessed not only on economics, but on strategic importance. 

Companies should expect execution readiness to matter now more than ever. Defence alignment does not favour speculative projects. Companies that can demonstrate advanced permitting, credible development timelines, scalable production, and strong governance will be far better positioned to benefit from defence‑linked demand and capital. 

The Strategy reinforces a clear policy preference for Canadian‑based production and processing, or integration with trusted allied supply chains. Projects dependent on non‑allied refining or jurisdictions of concern face increasing commercial and policy risk.  

Projects that demonstrate credible paths from mine to processing to end‑use, particularly in Canada or allied jurisdictions, are more likely to align with federal priorities and attract preferential policy support and procurement attention. 

Looking ahead 

The Canada Strong Fund and Defence Industrial Strategy together mark a redefinition of mining – particularly critical minerals mining – as strategic industrial and security infrastructure. For mining companies, the opportunity is significant, but so is the need for careful planning.  Companies that proactively align project strategy, governance and capital planning with these initiatives will be better positioned to access capital and de‑risk projects. 

More information on the Fund is in previous Cassels Comment. 

Jennifer Wasylyk, is Cassels’ Deputy Managing Partner, and Carla Potter, is a partner with Cassels’ Banking and Specialty Finance Group