In late June 2026, Canada Nickel (TSX-V:CNC) commenced arrangements for a debt financing of up to US$600 million ($857 million). The proposed funding would allow the company to monetise investment tax credits expected from the construction of its Crawford Nickel Project in Ontario, Canada.
CEO Mark Selby says that as Canada Nickel progresses toward a final permitting decision, this financing enables the company to move aggressively on key project components ahead of a final investment decision.
“This bridge financing is central to Crawford’s overall capital structure; it allows us to deploy Canada’s generous investment tax credits available for critical mineral projects in Canada to fund more than half of the equity capital we need to build Crawford.”
Canada offers tax incentives for mining activities, including exploration, in order to reduce the overall tax load for mining companies with local operations.
The country’s critical mineral exploration tax credit (CMETC), introduced in 2022, provides a 30% non-refundable tax credit for specific expenses related to mineral exploration conducted in Canada. It also provides an additional income tax benefit for individuals who invest in mining flow-through shares (FTS). Companies that issue FTSs can ‘flow through’ certain expenses to the share purchaser, with those expenses seen to be incurred by the investor, therefore reducing the investor’s taxable income.
Canada Nickel has announced that the Impact Assessment Agency of Canada has submitted its final impact assessment report for the Crawford Project to the minister of the environment and climate change. The submission advances Crawford to the final stage of the federal impact assessment process.
The company expects a decision within 30 days.
“Canada Nickel looks forward to the minister’s decision statement and to progressing towards a construction decision in 2027,” Selby says.
Crawford is the first mining project in Canada to reach this final decision stage since the federal government updated its Impact Assessment Act in 2019. This milestone follows the project’s designation as a Nation-Building Project by the Canadian Government in 2025, with the additional recognition under Ontario’s One Project, One Process (1P1P) Framework in 2026. The recognition highlights the strategic importance of the project and its contribution to Canada’s economic future.
Crawford is also expected to be the largest nickel sulphide project in the Western world, with a plan to potentially develop a zero-carbon industrial cluster in Timmins, Ontario, where it is located.
What makes the company unique among its peers is its focus on zero-carbon downstream processing, as the company and its subsidiary, NetZero Metals, look to develop a fully integrated downstream processing facility, enhanced by carbon sequestration.
The facility is expected to fill a key gap in the North American market, providing nickel, stainless steel, and alloy material using a low environmental footprint technology.
Canada Nickel has outlined a US$2.5 billion funding plan to achieve its goals, utilising non-dilutive government support with additional equity leverage. In addition to the US$600 million in investment tax credits, the company has secured a US$100 million offtake agreement from Samsung SDI and is pursuing another joint venture with Scotiabank and Deutsche Bank for up to US$200 million.
Additional government funding programs both domestically and globally have the potential to provide up to US$300 million.
On the debt side, the company has received a letter of intent from Export Development Canada for US$500 million, with an additional C$500 million ($506 million) support letter from a leading Canadian financial institution.
Why Canada’s nickel strategy matters
Government funding, tax credits, and offtake agreements of this kind could help make North American nickel exploration, mining, and processing more economically viable compared to established Chinese and Indonesian companies, who have typically led control of the critical metal.
Indonesia holds around 67% of global nickel supply. In a series of successive policy implementations between 2009 and 2019, the government effectively banned the export of nickel ore, requiring the nickel to be processed domestically prior to export. The ban fully went into place in January 2020. China currently controls about 75% of Indonesia’s nickel processing and refining capacity.
Canada, on the other hand, has the potential to be a powerhouse in its own right, currently ranking fourth-largest producer globally at 125,364 tonnes mined in 2024, and an estimated 2.2 million tonnes of reserves.
At the moment, Canada is not processing any nickel domestically, though Canada Nickel plans sit alongside FPX Nickel’s (TSX-V:FPX) proposed Awaruite Nickel Sulphate Refinery in British Columbia. Awaruite’s recently published Scoping Study outlines a 40-year refinery, producing battery-grade nickel sulphate for the electric vehicle sector.
In September 2025, FPX was also awarded C$3.5 million in non-repayable funding from Natural Resources Canada’s Critical Minerals Infrastructure Fund to support the development of its Baptiste Nickel Project.
As Canada looks to establish a fully integrated domestic nickel industry, government incentives are supporting companies across the development pipeline. While advanced developers such as Canada Nickel leverage investment tax credits to fund construction, earlier-stage explorers such as Fathom Nickel (CSE:FNI) can potentially benefit from policies designed to encourage new discoveries and expand Canada’s future nickel inventory. These types of initiatives will help to build a secure domestic source of battery-grade nickel.
Fathom is focused on proving up the ‘high-grade’ magmatic nickel sulphide district in Saskatchewan, with three key projects, Gochager Lake, Albert Lake, and Friesen Lake.
The company recently completed phase two drilling at Gochager Lake, identifying two new nickel-copper-cobalt mineralised zones, as previously reported.
With the drill program now complete, Fathom expects to release the assay results in early August, with next steps to be confirmed then.
Power Metallic Mines (TSX-V:PNPN) is advancing the Nisk Nickel-Copper Sulphide Project as Canada’s next polymetallic mine, with ‘high grades’ of copper, nickel, platinum, palladium, cobalt, gold, and silver.
While Nisk is predominantly a copper and platinum group element (PGE) discovery, the project’s polymetallic nature means nickel remains an important component of its potential future production, adding another source of domestic critical battery metals.
Power Metallic also notes Québec’s tax credits cover about 50% of its exploration and development costs.
As governments move to secure critical mineral supply chains, Canada’s exploration incentives, investment tax credits, and downstream manufacturing support are helping to build an integrated domestic nickel industry, from discovery through to refining.
For companies like Fathom Nickel, Power Metallic, and Canada Nickel, these policies are lowering financing barriers while encouraging new discoveries and project development.
If successful, they could help to position Canada as a leading supplier of responsibly produced, battery-grade nickel at a time when global supply remains heavily concentrated.
Write to Amy Rotman at Mining.com.au
Images: Canada Nickel, Fathom Nickel
