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Prime Minister Stephen Harper takes part in a wreath-laying ceremony at a monument to Ukrainian poet Taras Shevchenko in Lviv on Tuesday. (Sean Kilpatrick/The Canadian Press/Sean Kilpatrick/The Canadian Press)
Prime Minister Stephen Harper takes part in a wreath-laying ceremony at a monument to Ukrainian poet Taras Shevchenko in Lviv on Tuesday. (Sean Kilpatrick/The Canadian Press/Sean Kilpatrick/The Canadian Press)

Politicians keep going, but Canadian business gives up on Ukraine Add to ...

It has become one of the enduring rituals of Canadian foreign policy: The Prime Minister flies to Kiev, shakes hands with a leader who is generally considered disreputable, praises his reforms, makes a generous business or trade deal, and suggests that great things will come of it.

During the past 20 years, we have seen this rite of passage from prime ministers Brian Mulroney, Jean Chrétien, Paul Martin and, this week, Stephen Harper, all of whom have turned Ukraine, whatever its political situation, into a favourite friend and trading partner of Canada.

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One thing was different on this week, as Mr. Harper shook hands with President Viktor Yanukovych, a man accused by watchdog groups of savagely repressing democracy, and signed a number of commercial, foreign-aid and visa-access deals and the beginnings of a free-trade deal with Ukraine.

This time around, the Prime Minister was not surrounded by Canadian businesses leaders; his speeches and comments made no mention of bold Canadian private-sector investments in Ukraine.

The reason, Canadian officials say, is that Canadian companies, especially those run by people of Ukrainian descent, have absolutely no interest in doing business in Ukraine this time.

Two decades of trade deals, Team Canada missions, government-subsidized investments and public-private projects in Ukraine amounted to nothing: Most of the investments and aid funds, officials and diplomats say, have disappeared through corruption, bribery, incompetence or outright theft in a country whose business and political culture is no longer trusted.

"So many wealthy Ukrainian-Canadians have come here and put their money into the economy, and they have all been burned so badly, they have lost millions, that they don't want to touch the place," a Canadian official directly involved in Ukraine said.

Canada, for years, has misjudged Ukraine's future, putting its political chips behind untested leaders - and repeatedly encouraging business people to follow suit.

It began when Mr. Mulroney, on December 2, 1991, became the first Western leader to recognize the declaration of independence of Ukraine from the collapsing Soviet Union. It was considered a diplomatically questionable move, as the leadership of Russia and Ukraine was still not clear, and it amounted to a Canadian endorsement of Ukrainian leader Leonid Kravchuk, who proved to be profoundly corrupt.

Mr. Chrétien continued that relationship, mounting a series of trade missions and official visits and signing a "special partnership" with Mr. Kravchuk's successor, the Moscow-friendly Leonid Kuchma, who oversaw even greater levels of corruption, severe repression of democracy and press freedom, and economic decline under his watch. Mr. Chrétien also, like his successors, called for the expansion of NATO into Ukraine, against the wishes of Russia and a number of the alliance's members.

Mr. Chrétien's "Team Canada" missions in 1998 and 2002 saw scores of Ukrainian-Canadian business people travel with the prime minister and pledge investments, often with federal aid, in Ukraine.

The subsequent economic chaos and graft may have rendered these investments useless, along with large Canadian foreign-aid investments, but, as each prime minister has known, a larger political purpose was being served. There are more than 1.2 million voters of Ukrainian descent in Canada, one of the country's most influential ethnic lobbies, and politicians ignore their influence at their electoral peril.

"I know that Chrétien, in dealing with trade and military expansion in Ukraine, he was appealing to the ethnic vote," a former ambassador to Ukraine says. "And Harper is principally concerned with this too - our political relations with Ukraine are often dominated by ethnic considerations."

Mr. Martin, in a move that seemed to echo Mr. Mulroney's, became one of the most assertive supporters of the Orange Revolution, in which reformist pro-Western politicians led by Viktor Yushchenko unseated Mr. Yanukovych, who was seen as Mr. Kuchma's successor and a force of corruption. Canada, in an unusual move, financed youth organizations backing Mr. Yuschenko's side and provided diplomatic assistance to the movement.

This, too, came to naught when Mr. Yuschenko's regime turned corrupt, anti-reformist and fraught with divisions within a year of its victory. More Canadian investments disappeared, including tens of millions poured into a project to contain the crumbling ruins of the Chernobyl nuclear reactor, a project paralyzed by corruption and factionalism.

In light of that history, Mr. Harper's deal-making with Mr. Yanukovych, the pro-Moscow leader who ran against the Orange Revolution, is in keeping with a tradition. "There are strong people-people links between our two countries," he told young Ukrainians Tuesday.

Those links, and the votes they deliver, will keep the Canadian leaders coming to Kiev.

Follow on Twitter: @dougsaunders

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