Canada Federal Budget 2021: Zimtu’s Outlook


On April 19th, 2021 Canada’s finance minister The Honourable Chrystia Freeland presented the Canada federal budget for the fiscal years 2020-21 and 2021-22 to the House of Commons. Conservative, Bloc Quebecois and Green MPs voted against the budget. However, the Federal NDP supported the budget in a House confidence vote, thereby assuring its passage.

Like our largest trading partner to the south, Canada is highlighting federal infrastructure spending to ‘build back better’ following the COVID-19 pandemic. Commitments include a $1B increase to Canada’s Universal Broadband fund, a $1.9B reinvestment in the National Trade Corridors Fund, and $6B for indigenous infrastructure, northern roads and alternative energy.

At the same time, Canada is also increasing support for battery supply chains and ‘electrification’ goals to meet global climate change challenges. To that end, the government committed $9.6M over three years to create a Critical Battery Minerals Centre of Excellence at Natural Resources Canada, and an additional $36.8 million over three years to Natural Resources Canada, for federal research and development to advance critical battery mineral processing and refining expertise.

The Canada Federal Budget also announced the investment of $5B over seven years, starting in 2021-22, in Innovation, Science and Economic Development Canada’s Net Zero Accelerator, a strategic initiative fund to rapidly expedite decarbonization projects with large emitters, scale-up clean technology and accelerate Canada’s industrial transformation across all sectors.

At Zimtu, we are cautiously optimistic that such support for Canada’s ‘green economy’ and northern economic development will put added emphasis on several equity holdings such as Commerce Resources and Saville Resources, who are currently developing critical mineral and industrial mineral projects in Inuvik, northern Quebec. Both companies are developing mineral deposits deemed essential to Canada’s economic security and required for Canada’s transition to a low-carbon economy.

Saville Resources principal asset is the Niobium Claim Group Property, situated within the central Labrador Trough, Quebec. The Property consists of 26 contiguous mineral claims, encompassing an area of approximately 1,223 hectares, and is considered prospective for niobium, tantalum, phosphate, and fluorspar. The Niobium Claim Group includes the Miranna Target, where prior boulder sampling in the area has returned 5.9% Nb2O5 and 1,220 ppm Ta2O5, as well as the Mallard Prospect where drilling has returned wide intercepts of mineralization, including 1.36% Nb2O5 over 4.5 m, within a larger interval of 0.80% Nb2O5 over 31.5 m (EC19-174A). In addition, drill intercepts of fluorspar at the Mallard Prospect include 26.1% CaF2 over 32.4 m (EC10-033) and 39.8% CaF2 over 6.6 m (EC10-040).

Commerce Resources Corp. is focused on the development of the Ashram Rare Earth and Fluorspar Deposit located in northern Quebec, Canada. The company is positioning to be one of the lowest cost rare earth producers globally, with a specific focus on being a long-term supplier of mixed rare earth carbonate and/or NdPr oxide to the global market. The Ashram Deposit is characterized by simple rare earth (monazite, bastnaesite, xenotime) and gangue (carbonates) mineralogy, a large tonnage resource at favourable grade, and has demonstrated the production of high-grade (>45% REO) mineral concentrates at high recovery (>70%) in line with active global producers. In addition to being one of the largest rare earth deposits globally, Ashram is also one of the largest fluorspar deposits globally and has the potential to be a long-term supplier to the met-spar and acid-spar markets.