International Trade Committee on April 4th, 2022

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Thank you, Mr. Bouchard.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

Mr. Masse, you have two and a half minutes, please.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Madam Chair.

To Mr. Agnew, which financial institutions would you be willing to share that probably require further examination for sanctions?

[Mark Agnew]

I would need to follow up in writing with the committee on that.

[Brian Masse, NDP, Windsor West, ON]

Thank you. I appreciate that.

I'm going to switch back to Mr. Shevchenko. With regard to the oligarchs, they are not just Ukrainian. There are Belarusians. Are there any others that are in our hemisphere? I mean, the oligarchs hiding and avoiding taxation is not a victimless crime even without a war. It's actually a significant problem for this world right now.

Do you have any suggestions as to others who might be complicit with the Ukrainian oligarchs? Perhaps we have some in the western hemisphere who require some greater attention.

[Andriy Shevchenko]

I'm not sure which Ukrainian oligarchs you're specifically referring to.

[Brian Masse, NDP, Windsor West, ON]

I'm sorry. I meant Russian. I apologize.

Without getting into specifics, do you think there's a connection with some who are from other countries who are probably unwilling to untie some of their business interests as they should.

[Andriy Shevchenko]

Yes, and I think in many ways now we have to do the homework we did not complete in previous years. It was necessary to take many of these measures a long time ago.

[Brian Masse, NDP, Windsor West, ON]

Thank you very much.

Thank you, Madam Chair.

[The Chair, Liberal, Judy Sgro]

Thank you, Mr. Masse.

We'll go on to Mr. Baldinelli for five minutes.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you, Madam Chair. I'll be dividing my time with my colleague, Mr. Aboultaif.

First of all, I want to build on some of the questions and issues that Mr. Bouchard brought forward.

I'm new to this committee. You talked about financial consequences, with about $4.4 million at risk with your involvement in dealings with Russia. I'm wondering about the involvement and role of Export Development Canada and its program of insurance. Looking at the site, I see that if a customer doesn't pay, it provides up to 90% of your insured losses.

Was that looked at by the company as a means? You're talking about creating new programs like a Canadian emergency wage program. Has your company, STAS, looked into support through the economic development corporation?

[Louis Bouchard]

We absolutely have. We are in daily contact with Export Development Canada, or EDC, about its insurance program. Unfortunately, for political reasons, EDC stopped ensuring losses in Russia in 2014, so that was no longer an option for us.

It's important for the committee to understand that our presence in the Russian market is not the result of risk mismanagement; it's the result of Russia being the only available market during the public health crisis.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

That was helpful for us to know.

I'd like to go back to Mr. Shevchenko. Looking at the importance of free trade agreements and future updates and the importance that agreements can play in helping to assist in the urgent rebuild and economic support that's needed as we move into the future, I was wondering if you could provide a quick update and your thoughts on that.

[Andriy Shevchenko]

If we are talking about the recovery and future rebuilding of the country, it's too early to talk about any specific numbers, but there are numbers that I can already see. GDP decline will range between $500 billion and $600 billion, and we are talking about 13% of Ukrainian roads being destroyed. That pretty much tells you the scale of the work ahead of us. Also, we want not just to get what we lost. We want to modernize our country and make it much better.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Now let's go to my colleague.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Thank you.

To Mr. Shevchenko and to Mr. Agnew, the trade balance between Canada and Ukraine is very humble, although we have a trade agreement. We're looking to modernize the agreement. There must be a reason this trade relationship hasn't grown as it's supposed to, although it's nice to imagine the community, the diaspora, here. The Ukrainian diaspora in Canada is the second largest outside Ukraine.

It would be interesting to know, for the sake of this study, why we haven't been able to grow these trade relationships.

Go ahead, Mr. Shevchenko and then Mr. Agnew, if you'd like to weigh in on this.

[Andriy Shevchenko]

I think it would be fair to recognize that there have been some very obvious problems and challenges. One of them was that Ukraine had been fighting corruption for quite a long time, and it was only after the Revolution of Dignity, when we introduced major changes in that sense, that we were invaded by Russia. That cut our economy by 20% in 2014, right away.

Having said that, I think it's quite obvious that there is a huge potential ahead of us. I think this is what we really should be focused on.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Mr. Agnew, I'd like to hear your Canadian perspective on this.

[The Chair, Liberal, Judy Sgro]

Could we please have a brief answer, Mr. Agnew?

[Mark Agnew]

In addition to the points that Mr. Shevchenko raised, I would add two points.

One is that I think the geopolitical uncertainty that came out of 2014 with Crimea has lingered for Canadian businesses.

The other thing is that linguistic differences are always a challenge. Not many Canadian exporters have Ukrainian language capabilities, and that's always going to be, I think, a thing that holds them back.

[Ziad Aboultaif, Conservative, Edmonton Manning, AB]

Thank you.

[The Chair, Liberal, Judy Sgro]

Thank you very much.

We go now to Mr. Miao for five minutes.

[Wilson Miao, Liberal, Richmond Centre, BC]

Thank you, Madam Chair, and thank you to everyone attending here today on this important study. My heart goes out to everyone in Ukraine during this invasion.

The following questions are for Mr. Agnew.

Canada and Ukraine have a rich history, and we've always been supportive of Ukraine's development, economically and politically. In 1991, Canada became the first country in the western hemisphere to recognize Ukraine's independence from the Soviet Union. In 1994, Canada and Ukraine issued a joint declaration highlighting their commitment to strengthening bilateral co-operation, including in relation to international trade.

Here's my question. Considering Canada's long history of and ongoing commitment to supporting Ukraine, do you anticipate any long-term implications for international trade? Can you expand on what these long-term implications would look like and how they will impact it?

Thank you.

[Mark Agnew]

There are a number of things to unpack, but in the short time I have to answer the question, one point I would like to underscore, which I mentioned in my opening remarks, is about transit through the Black Sea, given there have been reports of mining through that passageway. It is a fairly important thing for both Ukraine's imports and its exports.

That will be an ongoing challenge. It's very risky right now to transit anything through the Black Sea. Even once the conflict ends, I think experience sort of shows that there will be, for instance, an ongoing need to clear mines and to ensure there is a safe passageway through there. That's something Mr. Shevchenko could speak to, I'm sure, in greater detail.

The other piece of it is that there's going to be a need to rebuild the basic economic infrastructure in Ukraine. A lot of rebuilding is going to have to happen. Certainly, to resume trade, the domestic Ukrainian landscape is going to have to improve.

Those are just two things, and certainly there are many others we could point to as well.

[Wilson Miao, Liberal, Richmond Centre, BC]

Mr. Shevchenko, do you have any comments you'd like to add?