Trade between Russia and Canada has plummeted since the invasion of Ukraine | War in Ukraine

Spread the love

Trade between Russia and Canada has plummeted since the invasion of Ukraine | War in Ukraine

Canada continues to import a significant amount of tires, jet fuel and plywood.

Canada's trade with Russia plummeted in the first 10 months after the Russian army invaded Ukraine a year ago. However, some sectors remain unaffected by the restrictions.

Industry Canada data shows that between March and December 2022, the value of total imports from Russia fell 78% to $414 million, compared to $1.9 billion during the same eight-month period in 2021.

In November and December, Canadian imports from Russia were down 98% from the previous year. In the two months, the total value of imports from Russia was $9 million, compared to $433 million in the last two months of 2021.

The value of exports from Canada to Russia between March and December fell 91%, from $584 million in 2021 to $52 million last year.

The Footprint Canadian business in Russia collapsed, according to observations by William Pellerin, an Ottawa-based commercial lawyer with McMillan LLP.

Federal data shows that Canada still imports a significant amount of tires, jet fuel and plywood, but only a handful of the top 25 products imported from Russia in 2021 and 2022 saw an increase.

This includes nickel ores, which Canada tends to process for export, as well as ammonium nitrate, which is mostly used in fertilizers. The value of imports of both more than doubled between the two years, although Canada did not import any after June 2022.

Lawyer Pellerin explains fertilizer data reflect the annual cycle of farmers' purchases prior to the spring planting season. Purchases related to this year's season will appear in later data.

Canada imposed a 35% tariff on Russian and Belarusian goods in March, which is expected to bring in $115 million in revenue that Canada plans to transfer to Ukraine.

Canada is the only G7 country to include nitrogen fertilizers in its tariff regime, angering growers in Eastern Canada who say the measure unfairly drives up the cost of products at a time high inflation.

Bombardier has announced that it will suspend all activities with its Russian customers on March 4, 2022 (File photo).

About half a dozen products saw their exports increase in 2022 compared to 2021, but many of them saw most or all of the increase occur in January and February, before Canada fell. x27; imposes penalties. For example, Canada exported $85 million worth of aircraft over 15,000 kilograms to Russia last year, all in February 2022.

William Pellerin's clients include Canadian and international companies dealing with Russian sanctions, but not the Russians themselves. He argues that the decline in Canadian exports to Russia stems in part from a list of weapons-related products that Ottawa banned for export in May, many of which do not consist of real weapons.

The list includes motorcycles and surgical or veterinary furniture, including dentist's or hairdressers' chairs and other chairs with rotational movements, tilt and elevation.

The list also includes cranes, x-ray equipment, and forklifts, as these items might be suitable for military use. Canadian companies can only export these items if they get a waiver.

“Canadian exports are replaced by Chinese sourcing.

—William Pellerin, Trade Lawyer

Notes that trade in services has also taken a hit, especially for companies that assist in mining operations in Canada and Russia, given the similar terrain of both countries.

Mr. Pellerin also met companies based in Dubai or Europe that have significant trade with Russians, and others in which Russian oligarchs have partial control or ownership. Not a week goes by without there being an oligarch sanctioned in a proposed business deal that we can no longer do.

What the average Canadian doesn't see is all the business that's not being done with Russian parties because of Canadian sanctions and, frankly, all of the resulting risks to international businesses, he said. added it.

For example, Canadian companies might suddenly discover that they have been doing business for years with a Russian minority-owned company, making it unclear if they need help. x27;a waiver to continue. Canadian companies request these exemptions arguing that the economic activity would not violate the spirit of the sanctions, and a cabinet minister approves the waivers.

William Pellerin argues that this makes the process more political than independent or legal and notes that there are very few details in the guidelines published online by Global Affairs Canada, compared to those provided by allied countries. /p>

At the department, spokesperson Grantly Franklin explains that waivers are assessed on a case-by-case basis and that we have a rigorous due diligence process in place.

William Pellerin says that the team that assesses the sanctions does all they can and some exemptions take months to process.

Over the past year, Canada has sanctioned over 1,600 people in connection with Russia's war in Ukraine. Yet the Government of Canada says it is unable to determine how many of its additional employees have been assigned to work on sanctions and exemptions.

Hundreds of employees of Global Affairs Canada can contribute to the sanctions effort at any time. For these reasons, it is not possible to specify the exact number of people working on sanctions at any given time, according to Grantly Franklin.

In 2021, Russia was Canada's 28th largest trading partner, falling to 53rd place last year.

Russia's Ambassador to Canada Oleg Stepanov laments this decline in trade and in an interview this month with the state news agency RIA Novosti, he says Ottawa's hostile actions have significantly affected bilateral trade dynamics. We expect the negative trend to continue this year.

Beginning of the widget. Skip the widget? End of the widget. Back to top of widget?

Previous Article
Next Article