The ongoing global helium shortage due to the conflict in the Middle East and the closure of the Strait of Hormuz is benefiting Canada’s emerging helium industry. Companies in Western Canada involved in helium production are experiencing increased demand, higher prices, and heightened investor interest.
Qatar, a major helium source supplying about 30% of the world’s helium, has faced challenges in exporting helium recently due to shipping difficulties and damage to its key helium facilities. The U.S.-Israeli conflict with Iran has led to a doubling of helium prices and raised concerns about shortages in various regions globally.
Helium is utilized in various industries, including medical MRI systems, rocket propulsion, semiconductor manufacturing, welding, and even party balloons. Duncan MacKenzie from Global Helium noted that the current disruptions in the global helium supply chain are driving momentum behind Canadian production.
Canada holds the fifth-largest helium reserves globally, according to the U.S. Geological Survey, but the actual production volume is limited. In 2025, of the 190 million cubic meters of helium produced worldwide, only about six million originated from Canada, with Alberta and Saskatchewan being key areas for helium exploration.
To expand the sector, companies need to invest in production facilities, pipelines, drilling new wells, and expanding their workforce. Securing investments is crucial for industry growth, with the need for capital being a significant constraint for helium producers.
Unlike other commodities like oil and gold, helium lacks a standardized global reference price, primarily trading through fixed contracts rather than a spot market. Prices surged following the Russian invasion of Ukraine in 2022 and increased further during the recent Middle East conflict, benefiting smaller Canadian helium producers.
The growing demand for helium presents a timely opportunity for new Canadian companies preparing to extract helium from the Prairies. The increased industrial interest in diversifying supply chains further enhances the market prospects for Canadian helium production.
However, a major challenge for the domestic helium industry’s growth is the lack of a liquefaction facility in Canada. Liquefaction is essential for efficient storage and global transportation of helium, as well as for certain applications like MRI scanners and superconductor cooling.
Canadian researchers emphasize the importance of a secure domestic helium supply for critical instruments and equipment, advocating for the development of a local helium supply chain instead of relying on the U.S. for liquefaction. The Helium Developers Association of Canada is calling for government support through improved tax incentives to boost the sector, similar to measures in the mining and critical minerals industry.
The Department of Finance is reportedly exploring ways to enhance the tax system, including in the natural resources sector, to support economic growth while considering budgetary constraints.