Ukraine news: Canada-Russia plummets after invasion

Ottawa –

Canadian-Russian trade plummeted in the first 10 months after Moscow invaded Ukraine a year ago. Ottawa’s economic measures have banned the export of everything from forklifts to barber chairs.

However, certain sectors have been largely unaffected by restrictions as companies grapple with an ever-expanding list of restrictions and sanctions.

Between March and December 2022, total imports from Russia will plummet 78% to $414 million from $1.9 billion over the same eight months in 2021, according to Industry Canada data. became.

By November and December, Canadian imports from Russia were down 98% year-on-year. Total imports from Russia in both months were her $9 million, compared to her $433 million in the last two months of 2021.

From March to December, Canadian exports to Russia fell 91%, falling from $584 million in 2021 to $52 million in 2022.

“Canada’s footprint in Russia has collapsed,” said William Perelin, an Ottawa-based trade attorney at McMillan Law Firm.

Canada still imports large amounts of pneumatic tires, aviation turbine fuel and plywood, according to federal data. However, only a handful of the top 25 products imported from Russia in both 2021 and 2022 increased.

This includes nickel ore, which Canada tends to process for export, and ammonium nitrate, which is used primarily in fertilizers. Canada has not imported either product since June 2022, but the value of both imports has more than doubled in two years.

Fertilizer data reflects the annual cycle farmers purchase prior to the spring seeding season, Perelin said. Purchases related to this season will appear in later data, he said.

In March, Ottawa imposed a 35% tariff on Russian and Belarusian goods, which will bring in an estimated $115 million in revenue, which Canada plans to transfer to Ukraine.

Liberals, while acknowledging the impact tariffs and regulations have on Canada’s economy, argue that it is worth taking a stand in favor of international rules.

Canada is the only G7 nation to include nitrogen fertilizers in its tariff regime, angering producers in eastern Canada, who say nitrogen fertilizers unduly increase the cost of their products during a period of high inflation. says.

There are about six products with increased exports in 2022 compared to 2021, many of which occurred mostly or entirely in January and February, before Canada imposed sanctions. For example, Canada exported her $85 million to Russia last year on aircraft weighing over 15,000 kg, all in February 2022.

As part of the company’s complex regulatory solutions group, Perelin said his clients include Canadian and international companies that have sanctioned Russia, but not Russia itself. .

He said the decline in Canadian exports to Russia was partially due to a list of weapons-related goods Ottawa banned from exporting in May, many of which do not consist of actual weapons.

This list includes motorcycles and surgical or veterinary furniture, including “dentist’s chairs” and “barber chairs and similar chairs that swivel as well as recline and raise and lower movements.” I’m here.

This list also includes cranes, X-ray equipment and forklift trucks. Canadian companies can only export these items if they secure a waiver.

“We’re replacing Canadian exports, and they’re being replaced by Chinese supplies,” Pellerin insisted.

He noted that the services trade has also been hit hard, especially given the similar geography between Canada and Russia, hitting companies that support mining operations hard.

Perelin also came across companies based in Dubai and Europe that have significant interactions with Russians and companies that are partially controlled or owned by Russian oligarchs.

“There isn’t a week that we don’t kick a rock, and there are oligarchs licensed to some proposed commerce that we can no longer do,” he said.

“What the average Canadian doesn’t understand is all the business that wasn’t done with Russian parties as a result of Canadian sanctions and, frankly, cost international business as a result. It’s all the risk you’re taking.”

For example, a Canadian company may suddenly find that it has been doing business with a small number of Russian-owned companies for years, making it unclear whether a waiver is required to continue.

Canadian companies apply for these exemptions, claiming that their economic activities do not violate the intent of the sanctions, and ministers approve exemptions.

Perelin argued that this would make the process “more political than true independence or legitimacy,” and detailed guidance posted online by Global Affairs Canada compared to that provided by allies. are very limited.

The agency has given no indication of improving the level of detail it provides, with spokesman Grantley Franklin saying in an email that waivers “are evaluated on a case-by-case basis and undergo a rigorous due diligence process.” There are,’ he said.

Perelin said the sanctions team was “doing as much as possible with minimal activity” and said some waivers would take months to process.

Last year, Canada sanctioned more than 1,600 people in connection with Russia’s war in Ukraine. However, the government has said it cannot determine the number of employees assigned to work on sanctions and waivers.

“Hundreds of Global Affairs Canada employees may contribute to sanctions efforts at any given time. For these reasons, we are unable to identify the exact number of people working on sanctions at any given time.” Franklin writes.

In 2021, Russia was Canada’s 28th most valuable trading partner, falling to 53rd place last year.

Russian ambassador to Ottawa, Oleg Stepanov, lamented the fall in trade in an interview with state-run news agency RIA Novosti this month.

“Ottawa’s unfriendly behavior has had a significant impact on the dynamics of bilateral trade,” he said in a Russian-language interview.

“We expect the negative trend to continue this year.”

This report by the Canadian Press was first published on February 23, 2023.

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