Canada and Japan
Natural Partners
Frank Des Rosiers
Assistant Deputy Minister
Strategic Policy and Innovation
July 2023

Natural Partners
Canada and Japan have a long history of close bilateral relations andshared values.

•Largest source of bilateral foreign direct investment from Asia••

Bilateral Relationship is a comprehensive and strategic partnership
focused on: ​Enhancing Economic Prosperity, ​• Addressing Climate Change and the Environment, and• Supporting Energy Security ​••Natural Resources and Energy are key to achieving
these objectives. Canada’s Indo-Pacific Strategy is rooted in this reality.

23Abundant Resources
NATURAL GASHYDROPOWER• 4th largest producer• 6% of world exports• 45% of production exported• 3rd largest hydro producer• 9% of world generation

CRUDE OIL

RENEWABLES• 4th largest producer• 3rd largest proved reserves• 8% of world exports• 9th in wind power capacity• 8th in liquid biofuels

CRITICAL MINERALSNUCLEAR• Leading producer of minerals andmetals; has all the minerals
needed for EVs/batteries (e.g.
nickel, cobalt, copper, lithium)• 2nd largest uranium producer• 6th in nuclear power• Tier 1 Nuclear Nation

Canada is a reliable supplier of energy and minerals

4Geopolitical Context
GeopoliticalContext• Current geopolitical context places energy andmineral security as a top priority forgovernment and business leaders.

o Need to secure reliable supplies of energyand mineralso Need to pursue action to meet net zerogoals
o Canada is committed to strengthening ties withJapan and other allies

Energy &MineralSecurity

ClimateChange

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Canada’s Competitive Advantage
Canada’s resource sector starts
from a position of strength:• Abundance of naturalresources• Innovation• Skilled labour• Clean power• Access to markets• Trade agreements• Competitive tax regime• Transport corridors

Targeted Programming• Programming to support clean energy
decarbonization projects, and to develop innovative
clean technologies

Strategic financing• Innovative financing and investment tools to attract
private capital and accelerate deployment of key
technologies

Investment tax credits• Refundable tax credits for investments in:• Clean Hydrogen• CCUS• Clean Electricity• Clean tech and clean tech manufacturing

Carbon Pricing andRegulatory Framework• Ensures there is a price incentive to reduce GHG
emissions and innovate. Requires reductions incarbon for certain activities and products

In response to US Inflation Reduction Act, Canada introduced several measures in Budget 2023.

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Canada’s Investment Tax Credits
Budget 2023•••

a set of clear, predictable investment tax credits
low-cost strategic financing
targeted investments and programming

Clean Hydrogen•

15-40% refundable tax credit of eligible
project costs, and a 15% credit for equipment

CCUS•

37.5-60% refundable invest tax credit

CleanTech•

Reduced Tax Rates for Zero Emission
Technology Manufacturers•

Clean Electricity•

30% refundable tax credit

Reduced corporate income tax rates (7.5% and4.5%)

15% refundable tax credit

CleanTech Manufacturing• 30% refundable tax credit

Budget2023's investment tax credits
are worth $60B over 10 years.

Other measures:• Canada Infrastructure Bank
• Canada Growth Fund
• Strategic Innovation Fund
• Clean Fuels Fund• National Supply Chain Strategy• Business Innovation and Research through CanadaInnovation Corporation• Contract for Difference7CRITICAL MINERALS / BATTERIESSTRATEGY▪ Critical Mineral Strategy released in Dec 2022

• Prioritizes lithium, graphite, nickel, cobalt, copper and rare earthelements▪ Canada seeking leadership across all segments of battery
supply chain

KEY BATTERY PROJECTS▪ PowerCo (VW): Batteries for EVs ($7B)▪ Stellantis/LGES: Batteries for EVs ($5B)▪ Ford Canada: EVs ($1.8B)▪ Umicore: Cathode active materials and precursors ($1.5B)▪ GM Canada: EVs ($1.0B)▪ BASF: Cathode active materials▪ POSCO/GM: Cathode active materials ($500M)▪ Vale: First North American nickel sulphate project▪ Lion Electric: Battery packs for e-buses ($185M)▪ Nouveau Monde Graphite signed an offtake and partnershipagreement with Panasonic Energy and Mitsui (2022)

Canada’s 31 Critical Minerals

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HYDROGEN / AMMONIASTRATEGY

PROJECTS▪ Hydrogen is a key pillar in decarbonizing global▪ Several multibillion projects actively pursued in both West andenergy system• Canada is 4th largest hydrogen producer•Leader in innovative hydrogen and fuel cell technologies(R&D).

▪ National Hydrogen Strategy launched in 2020
▪ Advantages for exports to Asian markets:
••••
•
•

Abundant and cheap natural gas feedstock
Suitable geology for CCUS
Shorter shipping times from West Coast to Asia
Clean electricity
Innovation
Skilled workforce▪ Multiple partners involved to seize opportunities(production / use)

East Coast ($29B)▪ FIDs expected by late 2023 (export markets to Asia / Europe).

▪ Itochu, Gentari, Inter Pipeline plans to manufacture and sell▪
▪
▪
▪

ammonia to Japan by 2027 ($1.6B)
Shell, Mitsubishi produce low-carbon hydrogen ($1B)
ATCO, Kansai Electric Power hydrogen supply chain between
Canada and Japan (2027)
Hydrogen Canada export hydrogen to Japan ($1B)
Northern Petrochemical export hydrogen to Japan by 2026 ($2.5B)

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9OIL & GAS
PROJECTS▪ LNG Canada• Phase 1 (80% complete, start-up in 2025 (14 MT) • Mitsubishi – 15% stake• Phase 2 under consideration (additional 14 MT)▪ Woodfibre LNG : start-up in 2027 (2.1 MT)▪ Cedar LNG : pre-construction phase (3 MT)

LNG Canada – Phase 1, Kitimat, BC (80% complete)

Trans Mountain Expansion (TMX)

STRATEGY• Will expand Canada’s pipeline infrastructure, increasing
oil export (890k b/d).

▪ Canada is on track to export LNG to Asia by 2025

• ​Once completed, will provide market diversification inAsia.

910 10NUCLEAR
STRATEGY▪ Canada is a tier-1 nuclear nation▪ Canada is the world's second largest producer of Uranium and the world'slargest exporter▪ NRCan and METI collaborate closely under the Canada-Japan Energy Policy
Dialogue, incl. on Atomic energy

PROJECTS

Ontario Power Generation SMR project(Darlington, Ontario) - Operational by 2028

•Ontario Power Generation’s SMR Project (Darlington, Ontario)• North America's first SMR, operational by 2028
• 300 MW – GE Hitachi technology•

Successful large-scale refurbishment of nuclear reactors (Ontario)

11Working as natural partners: together, lots can be achieved!

ありがとうございます
Frank Des Rosiers
Assistant Deputy Minister
Strategic Policy and Innovation
Natural Resources Canada