The North America Brief is a compilation of stories and links on the United States and Mexico’s relationship with Canada’s Prairie provinces focusing on stories and topics not always “on the front page” of mainstream media. This is trial run for the brief; we welcome your feedback as we test the idea. 

In this issue: Saskatchewan seizes the moment, Lithium fever is spreading, Big bucks for American ag and more.  

On Energy… 

Saskatchewan seizes the moment: Substantial progress has been reported on a $55 million ‘first-of-its-kind in North America’ rare earth processing facility being developed by the Saskatchewan Research Council and funded by the Government of Saskatchewan. The quick build of the facility counters perceptions from recent LNG export frustrations that Canada may be unable to seize opportunities in new energy arenas. The facility, the first of its kind outside China, lays the foundation for a Rare Earth Element (REE) supply chain, the Saskatchewan Research Council reports. Canadian Chamber of Commerce President Perrin Beatty said “showcasing Saskatchewan as the continental hub for value-added rare-earth products sends a message – that Canada can provide global markets with the essential building blocks for a low-carbon future.” The facility will be partially operational by 2023 and up and running by 2024. 

In the context of North America, this is huge news: In June, the U.S. planted a flag with a $370 billion cash injection into climate and clean energy (Inflation Reduction Act). The investment will support numerous kinds of energy projects and Canadian stakeholders and governments are looking for the right lanes in which to swim. While Saskatchewan’s facility is a great start, more is needed according to a recent RBC report which notes that “Canada’s green investment lags other major economies” and that to meet Net Zero targets, Canada needs to spend $60-80 billion annually on green investments. In the Carbon, Capture, Utilization and Storage pool, Alberta and Saskatchewan companies are still waiting for the investment tax credit that the feds promised in April. 

Keeping pace with the energy boom: Scott Crockatt (Business Council of Alberta) says a solution for Canada will come from “a long-term, continent-wide, coordinated policy approach to energy and the environment,” as reported in the Calgary Herald.   

Lithium fever is spreading from Manitoba to Mexico: SnowLake Lithium in Manitoba plans to be the “world’s first completely electric lithium mine.” In Leduc Alberta, the oilfields are no longer drilling for oil, but lithium. Thanks to Calgary-based E3 Lithium, extraction technology used to get lithium from oilfield brines is ramping up. Meanwhile in Mexico, ever since lithium became nationalized project development has been stunted, BNamericas reports. Despite the slow start in Mexico, extraction will eventually commence, likely starting with the Sonara lithium clay project, with the help of Chinese company Ganfeng Lithium.  

Canada’s opportunities in critical minerals still depend on having effective transportation, logistics and other infrastructure. Unfortunately, lack of national planning in Canada makes this a problem. A paper by the George W. Bush Institute and CWF published this week by the Woodrow Wilson Centre offers a potential solution that goes beyond critical mineral infrastructure. Read the paper here.  

On Infrastructure… 

A $27 billion merger between Canadian Pacific Railway and Kansas City Southern is currently being discussed in Washington. The merger would link Canada, Chicago and the American Midwest with Mexico and Texas—offering an alternative to existing BNSF Railway and Union Pacific routes. The new company would have a presence across 32,000-kilometres reaching Mexico City, Saint John, and Vancouver. With the decision still pending, Chicago politicians and support groups ask for the hearing to be delayed until a separate study on the how the merger will impact the Chicago area is conducted.  

On Pipelines… 

With the help of Calgary-based TC Energy, Mexico is expanding its oil processing capacity by 20 per cent with a $4.5 billion pipeline called the Southeast Gateway, with completion likely in mid-2025. A Bloomberg article highlights recent speculation that this was a strategic move from TC Energy with hopes of building a presence outside of Canada. Meanwhile, pipelines from Canada to the U.S. are facing scrutiny; Enbridge’s Line 5 and TC Energy’s Northwest Express Pipeline are just two current examples. 

On Big Bucks for American Ag... 

As part of the Inflation Reduction Act, agriculture technology and forestry are getting some cash too, and it’s a lot: In stark contrast to the fertilizer fiasco in Canada, the American ag and forestry industries are getting $38 billion (with a B) to reduce GHG emissions and mitigate environmental impacts of production, USDA reports. According to CleanTechnica, these investments within the IRA are the largest since the 1930s Dust Bowl. The investments will be disseminated via a call for proposals ranging from debt relief ($3.1 billion), to land loss ($250 million), and to underserved or minority farmers ($2.2 billion). See the full investment overview here. A significant portion of this money will go to prairie regions and states that mirror what we produce in Western Canada. From a USDA press release, here are a few of the initiative’s projects:  

  • “The Grass is Greener on the Other Side: Developing Climate-Smart Beef and Bison Commodities” is a partnership between the University of South Dakota and beef and bison producers to encourage land management and climate-smart grazing practices. 
  • “Traceable Reforestation for America’s Carbon and Timber” will offer the Western U.S. funding and support to implement reforestation and afforestation in deforested regions affected by wildfires.  

U.S. Agriculture Secretary Tom Vilsack says “this effort will increase the competitive advantage of U.S. agriculture both domestically and internationally, build wealth that stays in rural communities and support a diverse range of producers and operation types.” 

On Drought… 

Mexican and American farmers faced severe drought this summer resulting in huge harvest reductions: The U.S. Department of Agriculture reported that cotton farmers in Texas left behind 70 per cent of their crop and the rice harvest California was half the size of normal years. In Mexico, harvest output was down 30 per cent from last year. Rising costs and extreme weather conditions could result in a change in growing patterns. Crops that once thrived in Mexico and certain U.S. states no longer do.  

Other News 

  • “For more than 100 years, modern water management in the American West has been conducted by the federal and state governments, without formal (sic. input from) tribal leaders.” For the first time in history, states and tribal communities have set formal meetings to jointly negotiate Colorado River water rights. More on this here.  
  • The results of the World’s Best Airline Awards are out and it’s not pretty for North America. Not one Canadian or American airline made it in the top 20 and Mexico didn’t even make the top 100. See full list here. 
  • A Canadian Geographic article shows how Inuit in Canada and the U.S. are seeking greater involvement in climate change decision-making and food security.   
  • Mexico is now growing raspberries in the winter due to year-round climate conditions and insane demand coming out of the U.S.  
  • The White House recently released a national food strategy with the goal of eliminating U.S. hunger by 2030.

— Taylor Blaisdell, policy analyst

The North America Brief is a compilation of stories and links related to the U.S. and Mexico’s relationship with Canada’s West. The opinions expressed in the links don’t necessarily reflect the views of the Canada West Foundation.