Canada has moved to formalize supply chain transparency obligations for battery manufacturers and component suppliers, layering targeted provenance and chain-of-custody disclosure requirements onto an existing regulatory framework reshaping procurement practices across the domestic energy storage sector.
The push draws on overlapping policy instruments - including existing supply chain reporting law, the government's 2023 Critical Minerals Strategy, and Canada's 2025 G7 Presidency agenda - that together are moving battery manufacturers closer to mandatory disclosure of mineral origin, mining practices, and chain-of-custody details for materials including lithium, cobalt, nickel, and graphite.
Background
Canada's regulatory push reflects a growing recognition that supply chain security and ESG credibility are inseparable from domestic battery competitiveness. The Fighting Against Forced Labour and Child Labour in Supply Chains Act (Bill S-211) came into force on January 1, 2024, requiring entities producing, purchasing, or importing goods in Canada to report annually on their efforts to prevent forced and child labour throughout their supply chains. Updated guidance from Public Safety Canada now requires reporting entities to identify source countries or regions of origin for all goods and services in their supply chains.
China accounts for approximately 69% of global graphite production and controls the dominant share of global battery mineral refining capacity. That concentration has placed geopolitical risk at the centre of Canada's battery strategy. Through its 2025 G7 Presidency, Canada led the release of the Roadmap to Promote Standards-Based Markets for Critical Minerals, an initiative designed to improve mineral traceability and transparency among allied nations.
In August 2024, Accelerate Alliance, a Canadian-based industrial alliance funded in part by Natural Resources Canada, published the Canadian Battery Innovation Roadmap, which calls for increased investment in transparency and traceability tools to verify the origin and ethical standards of battery materials. The roadmap identifies reducing conflict minerals, ensuring ethical sourcing, and strengthening ESG metrics as primary objectives.
Details
The regulatory framework is advancing on multiple fronts. Natural Resources Canada actively supports the Global Battery Alliance's digital tracking system, which provides detailed insights into the origins of battery materials, ESG metrics, and carbon footprint data. Canada also backed the introduction of ISO 59014, a standard introduced in October 2024 outlining principles and guidelines for environmental management, traceability, and recovery of secondary materials with specific application to battery supply chains.
On the investment side, Energy and Natural Resources Minister Tim Hodgson announced a C$6.4 billion investment package across 26 Canadian mining projects at the G7 Energy and Environment Summit in Toronto, supporting extraction, processing, and battery technology. The package includes offtake agreements - including deals with Rio Tinto and Nouveau Monde Graphite to support domestic production of scandium and graphite - aimed at ensuring verifiable, domestically traceable sources of battery feedstocks.
Legal analysts at Gowling WLG note that while Canada has not yet codified battery-specific traceability requirements on par with U.S. or EU rules, the regulatory trajectory is clear. The EU Batteries Regulation requires battery manufacturers to verify the source of critical minerals including lithium, nickel, cobalt, and natural graphite, and mandates chain-of-custody systems ensuring those minerals do not contribute to conflict, child labour, or environmental harm. Full enforcement of the EU's battery passport requirements, which track carbon intensity and material origin via QR code, takes effect February 18, 2027. Industry observers say Canadian automakers and energy storage developers exporting to European markets will face de facto alignment with EU disclosure standards regardless of domestic mandates.
The domestic greenwashing enforcement backdrop adds further compliance pressure. In 2025, Canada's Competition Bureau released final guidelines on environmental claims under amendments to the Competition Act, with penalties for deceptive environmental marketing reaching millions of dollars or a percentage of global annual revenue for repeat offenders.
Outlook
The Canadian Climate Institute estimates domestic demand for critical minerals could reach C$16 billion annually by 2040, driven by battery manufacturing, electric vehicle production, and clean energy infrastructure. That demand trajectory is expected to accelerate standardization of provenance disclosure as procurement volumes grow and investor ESG scrutiny intensifies. Industry groups, downstream recyclers, and North American automakers operating under U.S. Inflation Reduction Act traceability rules are likely to treat Canadian disclosure standards as a baseline for integrated continental supply chain compliance. The CSA has indicated it will revisit mandatory sustainability disclosure rulemaking, though no timeline has been committed.
