Critical Minerals, Defence Demand, and the Quiet Rise of IP Risk in Canada’s Supply Chain Strategy

Critical Minerals are playing an increasingly important role in the Canadian economy, not only as a significant income generator or, undeniably, from a defence standpoint, but the global demand for these resources has shown Canada the need to strengthen it's position as a global mining leader, and increase and refine its abilities to produce and process these critical resources. 

This issue was highlighted in a recent article in Energy and Mines magazine, on the topic of defence spending and Canadian mining entitled “For Critical Minerals, Defence Offers Bankable Growth – And New Challenges”, citing accelerating capital deployment, government offtakes, supply‑chain realignment and the need for Canada to increase its domestic processing ability. From an intellectual property (IP) perspective, however, an important shift may be less obvious: Canada’s critical minerals push is increasingly a technology strategy, not merely a resource strategy. That evolution places IP front and centre for companies operating at the intersection of mining, processing, and defence.

This direction is explicit in federal policy. Canada’s current Critical Minerals Strategy (issued 2022 and progress updated Fed. 2026) prioritizes domestic processing, midstream technologies, and dual‑use applications tied to defence, clean technology, and advanced manufacturing. The implication for the Canadian mining industry is clear: projects are now being assessed not only on what they extract, but on the technology they control and the Intellectual Property rights supporting it.

Processing Technology Is the Strategic Asset

Industry participants consistently emphasize that the real bottleneck in critical mineral supply chains is processing capacity. For example, the above article noted that, “For mining companies, the decisive differentiator is not simply the mineral deposit itself, but the ability to process material domestically.” Federal policy mirrors this view, with emphasis on advancing innovative extraction, refining, recycling, and circular‑economy technologies.

From an IP standpoint, this represents a shift in value creation. Processing plants can embed patentable inventions— new process steps, new machines, and novel system configurations—as well as valuable trade secrets and operational know‑how that may never be patented. These assets may be as difficult to replicate than a mine itself, but may be used to support operations at multiple mine sites.

As a result, investors, lenders, and government offtakers are increasingly considering technology risk (and opportunity) alongside geological risk. An unclear or fragile IP position around processing can therefore undermine project financing, even where the underlying resource is sound.

Public R&D and University Collaboration: Innovation Meets IP Complexity

One feature of Canada’s current approach is its emphasis on collaborative R&D. Federal laboratories, universities, and industry are jointly developing new processing and separation technologies, often with direct government support.

While this model accelerates innovation, it also complicates IP ownership. Canadian universities or industry partners may seek to retain ownership of foreground IP and grant licenses to commercialization partners, frequently with conditions around exclusivity, sublicensing, or changes in control. Background IP from multiple contributors is common, as is joint inventorship — which can further complicate the ownership and exploitation arrangements. Careful planning and monitoring is required for each party to ensure it is getting what it bargained for.

In a defence‑aligned context, these issues become more acute. What begins as a research collaboration can evolve into strategically significant infrastructure. If IP rights are fragmented or poorly aligned with financing and procurement requirements, they can become obstacles to project advancement rather than assets.

Defence Funding De‑Risks Capital — But Rarely Leaves IP Unchanged

Defence‑linked funding and offtake arrangements can function as de‑risking mechanisms for private capital. Federal policy now explicitly links critical minerals to national security and allied defence supply chains, including the use of offtake agreements (including stockpiling arrangements), strategic investments, and designation of certain minerals as security priorities.

From an IP perspective, such support rarely comes without impact. Even where a company retains formal ownership of patents or know‑how, defence or security‑driven funding may introduce government‑use rights, domestic production requirements, or constraints on foreign assignment and licensing.

These conditions are not inherently problematic, but they can materially affect valuation, exit options, and cross‑border operations. IP strategy must therefore be developed in parallel with funding and procurement strategy, not after the fact.

The Critical Minerals Research, Development and Demonstration Program: Funding That Elevates IP Importance

A particularly relevant federal initiative for technology‑driven projects is the Critical Minerals Research, Development and Demonstration Program (CMRDD).

The CMRDD Program is expressly designed to address key technology gaps and advance critical mineral processing, recycling, and circular technologies toward commercial deployment in Canada. It targets projects that move beyond laboratory research into pilot, demonstration, and pre‑commercial scale—precisely the stages at which IP value crystallizes.

For companies working on processing or recycling technologies, the CMRDD Program represents both an opportunity and a responsibility. Public funding at this stage often entails heightened scrutiny of IP ownership, licensing rights, and freedom to operate. Clear documentation of background IP, foreground IP allocation, and commercialization rights is typically essential for eligibility and for downstream financing.  

While the call for new R&D projects is currently closed, expressions of interest are currently being accepted to identify high-potential projects that address key technology gaps and advance critical mineral processing, recycling, and circular technologies toward commercial deployment in Canada.  Companies interested in this program can find full details, including eligibility criteria and application guidance, on the Government of Canada’s CMRDD webpage.

Dual‑Use Technology and IP Optionality

Federal policy increasingly emphasises dual‑use minerals and technologies that serve both the commercial and defence market. While this supports demand certainty, it can narrow IP optionality.

Processing technologies linked to defence supply chains may, in some instances, face constraints on disclosure, patent filing strategy, or downstream licensing. In some cases, companies may need to rely more heavily on trade‑secret protection or carefully sequenced patent filings to preserve commercial flexibility. These outcomes are programme and contract‑specific, but they are becoming more common in the critical minerals space.

From Policy Ambition to IP Execution

Taken together, industry trends and federal programs signal a clear transition: critical minerals projects are now technology‑centric, defence‑aware, and IP‑intensive.

For mining and defence‑aligned companies, IP is no longer a peripheral legal consideration. It is a core component of project finance, government funding eligibility, and long‑term strategic positioning. Those that integrate IP strategy early—particularly when engaging in public R&D and technology demonstration programs—will be better positioned to scale, partner, and secure capital in a security‑conscious global market.

At Marks & Clerk, this intersection of Canadian innovation policy, defence alignment, and intellectual property law is where we help clients turn strategic ambition into bankable reality.