A newly released report estimates Canada will need at least $30 billion in new capital investments by 2040 if it wants to meet domestic demand for the critical minerals key to a green economy transition.

But the Canadian Climate Institute’s report says cutting back on environmental safeguards and Indigenous consultation to speed up those projects is likely to backfire.

The report released Thursday says those cutbacks can lead to delays later on, due to community opposition or litigation.

The think tank’s latest report comes as the federal government, along with Ontario and British Columbia, face major pushback from First Nations and environmental groups to legislation intended to speed up mining project approvals.

The report says Canadian governments should support Indigenous participation and reduce environmental risks as part of efforts to reduce regulatory delays.

It says Canada has a big opportunity to capitalize on the surging domestic and global demand for critical minerals to build the batteries, solar panels and electric vehicles required to reduce greenhouse gas emissions.

It estimates domestic demand alone for six key critical minerals, including lithium and copper, will reach $16 billion by 2040 if Canada keep up its climate policies, with almost half of that coming from EV manufacturers.

To meet that demand, the think tank estimates Canadian mining projects will need a total of $30 billion in capital investments, and even more if the industry wants to help satiate international demand too.

The report says that’s also likely a lowball figure since it excludes major cost overruns that often plague mining projects.

The estimated domestic need “vastly exceeds” current investment in the sector, which averaged about $2 billion per year from 2018 to 2023, the report said.

The report suggests there’s a role for governments to step in to support the sector with either equity investments or financial risk-sharing agreements. But it should not come at the expense of Indigenous consultation or environmental oversight, the authors say.

“Successful projects that are being developed fast are the ones that have participation from Indigenous communities, that have adhered to the highest environmental standard,” said co-author Marisa Beck, the think tank’s clean growth research director.

Critics say recently passed Bill 15 in B.C. and Bill 5 in Ontario gives those provinces sweeping powers to exempt mining projects from environmental oversight and undermines constitutional obligations to consult First Nations. The provincial governments disagree and say the legislation will help speed up approvals without sacrificing First Nations rights or environmental protections.

Ottawa has also faced pushback to its legislation intended to speed up infrastructure approvals.

The authors of Thursday’s report declined to comment on the specifics of those legislative efforts, but it did put forward several policy recommendations.

Governments should also support Indigenous communities exercising their right to self-determination and economic participation, such as through funding for Indigenous-led environmental assessments, the report says.

Elsewhere, the report recommends provinces strengthen mining regulations to reduce environmental risks and liabilities, such as requiring producers to make their closure plans publicly available.