Russia vows to retaliate as Canada readies more sanctions

OTTAWA—Canada is ready with a “biting” next round of penalties including export controls and financial penalties on “oligarchs” on top of sanctions on Russian lawmakers and two banks in retaliation for Russia’s latest threatening move into Ukraine.

In an interview with the Star, Foreign Affairs Minister Melanie Joly underlined Wednesday the threat of more to come in what she said is a unified exercise among Western allies to ensure there are no gaps in the financial sanctions that Russia could exploit.

“The most important thing is that we are co-ordinated, and when we’re co-ordinated, there’s no loopholes,” she said. “This is a preview of what’s to come.”

“We are ready to target the financial sector. We’re ready to target the oligarchs. And we’re ready to make important announcements regarding exports,” but Joly declined to identify which sectors would be targeted. The US has said it was ready to hit sectors like aerospace, computing and digital technology, and areas which are vital to Russia’s ambitions to develop its economy.

Joly said the sanctions will hit Russia’s ability to finance and sustain a war in Ukraine, not just the personal wealth of President Vladimir Putin and his inner circle.

The federal government summoned Russia’s ambassador to Canada, Oleg Stepanov, to a meeting in Ottawa with her deputy Tuesday to ensure Ottawa’s intentions were clear, she said.

“We wanted to make sure he conveyed that message to his capital. We wanted to put it on record. And quite frankly, it’s been years that Canada has summoned an ambassador from Russia,” she noted.

In a statement to the Star Wednesday, the Russian embassy said Stepanov “used this opportunity to convey Russian position in response.”

On Twitter, the embassy posted a declaration Wednesday warning “unilateral sanctions against Russia imposed by the Government of Canada are illegitimate and illegal,” and vowed retaliation “following the principle of reciprocity.”

“Russia’s recognition of the independence of the People’s Republics of Donetsk and Luhansk is irreversible,” the declaration said.

Prime Minister Justin Trudeau announced Canada’s latest sanctions late Tuesday in concert with Western allies against Russia and its political leaders, following a meeting of G7 ministers earlier that day. Japan too has levied similar penalties.

Russian President Vladimir Putin declared he would recognize as independent states two separatist regions in eastern Ukraine, and moved Russian forces into those territories.

“It’s on Putin shoulders to decide what’s next,” said Joly. “Putin now has a clear signal from us, from Canada and its allies, and he has still the choice to de-escalate. We are ready to impose further sanctions, further pain, further harm to Russia’s economy, to his entire close guard from him at the same time.

“So we’re still ready to engage in diplomatic talks. But that window is really closing very fast until innocent lives are put at risk.”

Canada’s sanctions were issued under the Special Economic Measures Act and ban all financial dealings “with the so-called independent states of Luhansk and Donetsk,” said Prime Minister Justin Trudeau.

The sanctions apply to members of the Russian Duma or parliament “who voted for the illegal decision to recognize these so-called republics.”

Ottawa has, along with the US, UK and the European Union, moved to halt Russia’s ability to borrow abroad, banning the purchase by Canadians of Russian sovereign debt, and has halted financial dealings with two state-backed Russian banks.

Trudeau said the sanctions will remain “until the territorial integrity of Ukraine is restored.”

Joly said the allies moved on the day Germany announced it was ending the Nord Stream 2 gas pipeline, to ensure they were on the same page, supporting Germany; and said the next round will also come “in lockstep with other allies.”

According to Global Affairs, Canada’s exports to Russia (mainly machinery, mechanical and electrical products, chemical products, food products and specialized instruments) in 2019 were valued at $666 million, and imports from Russia (mainly mineral products, chemical products, plastics and rubber products) were valued at $1.9 billion.

Canada has temporarily shuttered its embassy in Kyev, and there are 14 consular staff remaining in Ukraine in Lviv, with consular teams in nearby Warsaw, Poland to assist Canadians departing Ukraine.

Canada is sending an additional 460 troops from air, sea and land forces to join NATO forces on the ground in NATO member countries around Ukraine, although it has made clear there is no intention to send Canadian forces into Ukraine. It already has about 900 stationed in the region.

The additional troops include the HMCS Halifax to deploy next month, an artillery battery of 120 people to deploy in 30 days, and a maritime patrol aircraft.

“I think it’s the biggest threat to the world stability in our generation,” Joly said of the prospect of a war in Europe, adding Putin’s threat to a “country’s sovereignty and territorial integrity” used “revisionist rhetoric to explain Russia’s entitlement to Ukraine. And the fact that Ukraine is not a country.”

“It goes against the very pillars that have ensured world stability since the Second World War,” she said. “That is why it is extremely important for Canadians to understand what’s going on.”