Canada to fund Kiev grid repairs with $115m from Russian import tariffs

Workers of electricity company DTEK maintain power lines by cutting redundant branches in Kiev, Ukraine, Thursday, Dec. 8, 2022.Andrew Kravchenko/AP

Ottawa earlier this year imposed a 35 per cent tariff on imports from Russia and its ally Belarus, and Canada is helping to fund the rebuilding of Kiev’s war-torn power grid.

Deputy Prime Minister Chrystia Freeland to announce $115 million donation to Ukraine At the Stand with the Ukrainian People conference in Paris on Tuesday.

Canada will transfer funds to Kiev from the revenue it has amassed from the tariffs, she said. The tax was imposed on March 2, shortly after Moscow began its all-out military offensive against Ukraine.

Russia has launched widespread missile strikes Significant damage has been done to Ukraine’s energy infrastructure in recent weeks, limiting Ukrainians’ access to electricity, water and heat.

“Putin and his followers are war criminals who are trying to use the cold as a weapon to destroy the spirit of the remarkable Ukrainian people,” 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 survive the difficult winter ahead.”

In June, G7 leaders pledged to explore how revenue collected through tariff measures could be used Russia Aid Ukraine.

Canada will provide Ukraine with $115 million through a World Bank fund to winterize and restore the country’s energy resources. The fund was recently established to facilitate grant contributions from international partners to help restore essential energy services in Ukraine.

Since February, Canada has provided Ukraine with $2 billion in direct financial assistance and pledged Additional $500 million via Ukrainian sovereign bonds earlier this month.

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

Ukrainian President Volodymyr Zelensky, speaking to G7 leaders at a virtual meeting on Monday, asked them to help his government secure an additional 2 billion cubic meters of natural gas and provide it with modern tanks, artillery units and shells, as well as long-range weapons .

Mr Zelensky also called on Russia to take a “substantial” step towards a diplomatic solution to the Ukraine war and suggested Moscow should withdraw its troops by Christmas.

“If Russia withdraws its forces from Ukraine, then it will also ensure a credible end to hostilities,” he said.

“I see no reason why Russia shouldn’t do it now – just before Christmas.”

Canada is home to the second-largest Ukrainian diaspora — the largest being Russia — and announced in October that it would sell government-backed five-year bonds to raise funds for Ukraine.

Tariffs on Russian imports have meant higher fertilizer prices for Canadian farmers who placed orders to buy products from Russia before the attacks on Ukraine began in February. Farm groups are lobbying Ottawa to pass on the proceeds of a 35 percent tariff on Russian fertilizers to agricultural producers.

In April, Prime Minister Justin Trudeau’s government also said it would use the Budget Enforcement Act 2022 to give Canada the power to seize or sell foreign assets confiscated under the sanctions law.

That would allow Canada to pay proceeds to help rebuild Ukraine or compensate those affected by Moscow’s military attacks on its neighbors.

As of Nov. 7, $121.9 million in assets in Canada had been effectively frozen as a result of this year’s sanctions against Russia, according to the Royal Canadian Mounted Police.

According to Reuters

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