Canada to fund repairs to Kyiv’s power grid with $115-million from Russian import tariff

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Canada is helping finance the rebuilding of Kyiv’s war-damaged electrical grid from a 35-per-cent tariff that Ottawa levied on imports from Russia and its ally Belarus earlier this year.

Deputy Prime Minister Chrystia Freeland announced the $115-million donation Tuesday morning at an international conference in Paris in support of Ukraine.

She said Canada will transfer the money to Kyiv from the revenue it has amassed from the tariff. The levy was applied March 2, shortly after Moscow’s all-out military assault on Ukraine began.

Russia has launched widespread missile attacks on Ukraine’s energy infrastructure in recent weeks, inflicting significant damage that has restricted Ukrainians’ access to electricity, water and heat.

“Putin and his henchmen are war criminals, and they are attempting to use the cold as a weapon to break the spirit of the remarkable people of Ukraine,” Ms. Freeland said in a statement, referring to Russian President Vladimir Putin. “They will not succeed, and this support will help ensure that Ukraine can secure its energy infrastructure and make it through the difficult winter to come.”

In June, Group of Seven leaders committed to explore ways to use revenue collected through tariff measures on Russia to assist Ukraine.

Canada will send the $115-million to Ukraine through the World Bank’s fund for the winterization and restoration of energy resources in the country. This fund was recently established to facilitate grant contributions from international partners to enable the restoration of essential energy services in Ukraine.

Since February, Canada has disbursed $2-billion in direct financial assistance to Ukraine and committed an additional $500-million through the Ukraine Sovereignty Bond earlier this month.

Canada has also committed more than $2.5-billion in military, humanitarian and other assistance to Ukraine this year.

Speaking to G7 leaders during a virtual meeting Monday, Ukrainian President Volodymyr Zelensky asked them to help his government obtain an additional two billion cubic metres of natural gas and to supply it with modern tanks, artillery units and shells as well as long-range weapons.

Mr. Zelensky also called on Russia to make a “substantive” step toward a diplomatic resolution of the war in Ukraine and suggested that Moscow should pull its troops out by Christmas.

“If Russia conducts a withdrawal of its forces from Ukraine, then it will also ensure a reliable end of hostilities,” he said.

“I see no reason why Russia should not do this now – in time for Christmas.”

Canada is home to the second-largest diaspora of Ukrainians – the first being Russia – and in October announced that it would sell a government-backed, five-year bond to raise money for Ukraine.

The tariffs on Russian imports have meant higher prices for fertilizer for Canadian farmers who made orders to buy the product from Russia before the February assault on Ukraine began. Farm groups have lobbied Ottawa to pass the proceeds from the 35-per-cent tariff on Russian fertilizer to agricultural producers.

In April, Prime Minister Justin Trudeau’s government also said it would use a 2022 budget implementation act to give Canada the power to forfeit, or sell, assets of foreigners seized under sanctions law.

This would enable Canada to pay out the proceeds to help reconstruct Ukraine or to compensate those affected by Moscow’s military assault on its neighbour.

As of Nov. 7, $121.9-million of assets in Canada have been effectively frozen as a result of this year’s sanctions on Russia, according to the RCMP.

With reports from Reuters and The Canadian Press