BMO forecasts expanded Canadian mining investment driven by critical mineral demand

Canada’s mining sector is positioned to attract a larger share of global capital, according to a new outlook from BMO Global Metals and Mining. The bank attributes this potential growth to rising global demand for critical minerals, a resurgence in corporate development spending, and supportive government policies. These factors are creating opportunities that extend beyond traditional extraction to include processing and downstream production. The analysis suggests that the country can leverage its established industrial base to capture more investment in the coming years.

This perspective is presented ahead of the Canada Investment Summit, scheduled for September 14 and 15. The event aims to convene major global investors and business leaders with the goal of catalysing one trillion dollars in total investment in Canada over the next five years. Matthew Murphy of BMO Global Metals and Mining noted that the federal government has identified critical minerals as a key area for attracting this capital. The summit serves as a platform to align private sector interests with national strategic objectives, highlighting the sector’s importance to the broader economic landscape.

Canada already holds significant positions in the global mining hierarchy. The country is the world’s largest producer of potash and the second-largest producer of uranium. It also ranks as the fourth-largest producer of gold and the fourth-largest aluminum refiner. This established base is supported by global mining expertise and leadership, as well as government regulators who aim to develop the industry domestically. These existing strengths provide a foundation from which the sector can expand its influence and output in the global market.

Corporate capital allocation plans are also showing signs of recovery. As of 2025, companies have planned approximately C$120 billion in spending on projects included in Natural Resources Canada’s 10-year Major Projects Inventory outlook. This figure represents an increase of C$50 billion compared to the 2018 outlook. However, it remains well below the peak of the previous cycle, which reached approximately C$220 billion in real 2026 dollars. This gap indicates substantial room for further growth in investment levels across the industry.

BMO Equity Research forecasts that annual Canadian development capital expenditures will rise by more than 11 percent over the next two years. Mining companies covered by the bank are expected to spend C$350 billion on operating costs, sustaining capital, and growth projects to produce metals and minerals in Canada over the next five years. This spending is intended to reinforce Canada’s position as governments seek more secure supplies of commodities essential to energy, defence, and advanced manufacturing. Miners are increasingly considering the country for new development capital, driven by these strategic needs.

The bank recommends that investors shift their focus from upstream activities towards downstream investment to make end-to-end production in Canada a reality. For this shift to occur, future mining investments need to focus on domestic copper smelting and refining, by-product capture, battery precursor materials, and rare earth separation. Other specific materials smelting and production are also identified as key areas. This approach aims to create more complete domestic supply chains and reduce reliance on external processing capabilities.

Infrastructure remains a key area for investing in mining, but it now has the potential to unlock new mining districts and generate new opportunities across the country. Projects ranging from gold, nickel, and lithium are being considered in regions from British Columbia to Ontario’s Ring of Fire and Nunavut. BMO recommends developing niche critical-mineral supply chains, which may require government intervention where market economics alone are insufficient. Targeted price supports could be needed for some commodities, while capital and regulatory backing for vertical integration could help companies develop more profitable downstream portions of the supply chain.

These measures could address challenges facing critical-mineral projects, including volatile prices, limited domestic processing capacity, and competition for investment capital. Infrastructure financing may provide another route to expanding the industry. Separating infrastructure investment from mine development could attract specialized infrastructure funds, reduce the cost of capital, and free miners to direct more money toward production capacity and downstream facilities. This structural change could improve the overall efficiency and profitability of the sector.

BMO also suggests that Canadian pension funds, which manage C$4.5 trillion in assets, are under-allocated domestically. There is an opportunity for mining infrastructure investment through these funds. Alignment between pension funds and the mining sector could allow for more competitive risk-adjusted returns domestically, while helping to finance the infrastructure and mining capacity needed to unlock new districts. Canada has generated successful mining companies both in and outside the country for years, including Agnico Eagle, Glencore, and BHP. Investment in the country’s mining sector has always been filled with opportunities and is now opening up to more.

For investors gathering at the Canada Investment Summit, BMO’s analysis suggests the opportunity is broader than financing individual mines. Reaching Canada’s investment ambitions will require capital across infrastructure, mineral production, processing, and other downstream industries. With the increasing alignment of government, regulators, and citizens, the Canadian mining sector can offer highly competitive risk-adjusted returns. Selected projects will develop mining proving grounds and support R&D projects that accelerate the progression of technologies from laboratories to testing and demonstration.