International Trade Committee on Nov. 9th, 2023

[Yuliya Kovaliv]

Thank you.

It's a very important question for companies in both Ukraine and Canada. Ukraine is looking forward to providing instruments for investment protection, in order to de-risk or minimize the risks for companies investing in Ukraine. That's why it's important that this chapter was renovated. It provides more clarity, more instruments for the companies for dispute settlement, and more assurance about the stability of the regulatory environment so that, for Canadian companies looking to invest in Ukraine, the regulatory framework is favourable.

Also, if we look more broadly, of course the war in Ukraine does not help. A Russian war does not help bring investments in the way Ukraine needs. There are many instruments that can further support this investment and trade, including expert financing and insurance against the war risks. These could be supportive for Canadian companies looking for projects in Ukraine, with their equipment, technology and innovations.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you.

I'm wondering whether you could also talk about this agreement with Canada and other agreements you might be pursuing. How might this agreement form a template for those? I think you're seeking to get accession to the CPTPP, to join the EU and things like that.

I'm wondering what other avenues you're going down.

[Yuliya Kovaliv]

Indeed, Ukraine is also tirelessly working on the economic front and on trade.

Since the start of the Russian full-scale invasion, Ukraine has already signed a digital trade agreement with the United Kingdom. We started negotiations to modernize our free trade agreement with the non-EU states, EFTA. We also started negotiations to sign for free trade with the United Arab Emirates, and we continue negotiations with Montenegro.

As well, in May this year, Ukraine submitted the application for CPTPP. I think the negotiation of this modernized CUFTA helped us, in a large portion, prepare for the negotiations to join CPTPP. The rounds of negotiations we went through for the modernized CUFTA helped us a lot to mostly do our homework, but also to be ready and prepared for that negotiation. That was very helpful for us on our future path to CPTPP.

I would like to thank Canada and the Canadian government for their support of Ukraine's submission to CPTPP.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

I have 50 seconds.

You mentioned Ukraine is pursuing opportunities in the renewable energy sector, and presumably investment there. You called it the “energy of the future”. I'm wondering whether you could expand on that.

[Yuliya Kovaliv]

Yes, indeed.

Developing a diverse energy package, which, of course, includes a big focus on renewable energy, was Ukraine's strategy both before the full-scale invasion and during it. Wind and solar power, together with hydro power, are significant parts of the Ukrainian energy mix. Ukraine also has good resources to develop solar, hydro and wind power.

Even during the war, Ukrainian companies continued to build wind power stations. Over 70 megawatts of new wind farms have been commissioned during the war, and companies are continuing to invest in them. That is also part of the Ukrainian goals for the green transition and rebuilding the energy sector, which will focus on further development of the renewables sector.

When it comes to hydro power, unfortunately there are no limits to Russian terrorism. With the Russians blowing up the Kakhovka water dam, one of the biggest of the Kakhovka power plants has been damaged. Ukraine seeks to both rebuild the Kakhovka water dam and build a new hydro power facility.

We welcome the start, which is in the form of an MOU between a Ukrainian hydro power operator and a Canadian company to explore the opportunities to help us rebuild hydro power facilities in Ukraine.

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Thank you.

[The Vice-Chair, Conservative, Kyle Seeback]

I will now turn to Mr. Baldinelli for five minutes.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Thank you, Chair.

Your Excellency, it's a pleasure to have you here today. Thank you for coming forward to bring remarks and answer some questions. You get the sense, I hope, of welcomeness from everyone who is here today. Everyone here, and our colleagues, could say that you have the full support of everyone here for Ukraine, and we will work with Ukraine when it emerges victorious against this illegal Soviet aggression.

As we discussed earlier, Your Excellency, prior to my election in 2019, I served as the communications manager for the Niagara Parks Commission. As part of my responsibilities at that time, I dealt with the protocol offices of the federal government and Global Affairs, as well as the embassies, when it came to establishing VIP visits to our country and to our region. One of the highlights of my career, prior to my election in 2019, was organizing the visit of President Zelenskyy and the first lady, who came in July 2019. It was an absolute pleasure to have them come to Niagara Falls and to Niagara Parks.

Again, it was one of the highlights of my career.

Your Excellency, I'm not sure if you've had the opportunity to visit Niagara Falls and Niagara Parks yet, but I extend this open invitation to you now so that, hopefully, we can have you there as well.

That is it from my end, in terms of welcomes.

Building on your comments in which you discussed areas such as infrastructure and energy having been greatly impacted because of the invasion, they are tremendous areas that are going to need investments. Following up on my colleague's comments from earlier, one way to improve upon the current free trade agreement—perhaps now or in the future—is to discuss issues and items such as direct energy co-operation measures and energy security. For example, there's Ukraine's electrical grid and energy production, and the needs of the Ukraine government and people moving forward.

There are issues such as the natural gas deposits, for example, and nuclear power. In terms of nuclear power, I believe there are 16 nuclear facilities in Ukraine. There are six that are currently controlled by the Russians, but they remain there. There is the electrical grid as well.

You talked about hydro production. I come from a community of 2,200 megawatts of hydro production. Here in the province of Ontario, there is huge potential for opportunities in the whole area of energy co-operation. An example is in hydro with Ontario Power Generation, but it's not only hydro. Ontario Power Generation is also a leader in the whole area of small modular reactors.

I would ask this question. Do you not think it would be beneficial, moving forward, if those types of issues could be included in a free trade agreement?

[Yuliya Kovaliv]

Thank you.

Indeed, energy infrastructure, IT and also the agri-sector are those sectors where the co-operation needs to be, and we are working to build this co-operation.

For the specific areas and the specific projects to work, I think the modernized CUFTA lays the broad ground for building up specific co-operation in areas of mutual interest, both for Canadian companies and for Ukrainian rebuilding efforts. I think that CUFTA itself builds a horizontal framework for co-operation and collaboration in the specific areas where we will welcome further work between businesses and companies, and also on the level of government, to develop this co-operation.

[The Vice-Chair, Conservative, Kyle Seeback]

You still have 25 seconds.

[Tony Baldinelli, Conservative, Niagara Falls, ON]

I'll cede my time.

I thank you, Your Excellency, for coming forward today.

[The Vice-Chair, Conservative, Kyle Seeback]

We'll now turn to Mr. Sidhu for five minutes.

[Maninder Sidhu, Liberal, Brampton East, ON]

Thank you, Ambassador Kovaliv.

I want to thank you for taking the time to join us here today.

Let me be very clear: Our government has stood by Ukraine, as you know, since day one of this unjust war and will continue to be there with Ukraine until they win this war. When that day comes, the task of rebuilding Ukraine's economy will begin.

In our discussions, you mentioned that everyone, including leadership in Canada, Ukraine and the business community, is fully in support of this modernized trade agreement. Also, speaking of the Ukraine rebuilding conference next month that you mentioned, many sectors are looking forward to the conference and, of course, the role of this modernized trade agreement with Ukraine to help rebuild their economy. I get that the opposition has to do its part, but this fake outrage and delay tactic that's coming from the Conservative side is not helping Ukraine rebuild at the end of the day.

I would also like to add that, as per the Canadian Press news article, “A search of parliamentary records suggests Poilievre has never spoken directly about the Ukraine invasion in the House of Commons”. It's important to know where the leader of the official opposition stands on this, but I would like to mention that our government will continue to be there to help Ukraine rebuild, grow both our economies and add jobs, as the ambassador mentioned in Her Excellency's opening remarks.

Having said that, what is your vision, Ambassador, for the Ukrainian economy in the next five or 10 years and how will this modernized trade agreement between Ukraine and Canada help Ukraine to rebuild?

[Yuliya Kovaliv]

Thank you.

I think, if we look back to February 24 last year, the prediction of Ukraine's economy was very hard to do, even by the brightest economic minds all over the world. When we saw the estimates of how the Ukrainian economy would perform in the spring of last year, many of them were too pessimistic. The result of the last year and the result of the microeconomic situation in Ukraine this year are better than the expectations, and there are several reasons.

First of all, we value the financial support that our allies are providing to Ukraine, because over 50% of all the Ukrainian budget, which is all the revenue we are collecting as a country through taxes and other government services, is linked to supporting our defence sector and to supporting our soldiers, who are fighting for our country. The support that Canada provides us in the form of loans is important to help support the people of Ukraine and for the ability of the country to move on.

Second, as we look at the facts, for the first time in history, the country, which is actively fighting its aggressor, got the four-year program with IMF. That is also a strong signal of the commitment of the Ukrainian government to further move on the path of reforms, and it's an important anchor for the microeconomic stabilization of the country.

The third important thing that I would reiterate is yesterday's decision and recommendation of the EU council to start the negotiations for the EU accession of Ukraine. It is historic that Ukraine has demonstrated that all of the seven political preconditions to this decision have been met. It really means implementing reforms, including in the sector of justice and in the sector of building transparency in the economy.

The fourth important thing is about the economic resistance in Ukraine itself. It is the strong voice of Ukrainian businesses that are not leaving the country and that are continuing to invest. It is the strong voice of those companies, including Canadian companies, that are continuing to work in Ukraine during the war. Canadian companies continue to invest and to increase their investments in Ukraine. This is the signal of the economic resistance of Ukraine's economy.

As well, the modernization of CUFTA is the agreement of opportunities, opportunities to increase economic co-operation and bilateral business ties. Also, it is a strong signal for many companies around the world that Ukraine and Canada are able, during wartime, to negotiate the modern free trade agreement. It sends a signal to companies that there is a framework and there is the infrastructure to work in areas of mutual interest, to create new jobs, to support exports and to support the economy of both countries.

Thank you.

[The Vice-Chair, Conservative, Kyle Seeback]

Thank you.

I'll now turn to Monsieur Savard-Tremblay.

You have two and a half minutes.

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

Thank you, Mr. Chair.

Ambassador, I want to assure you that I think it is unfortunate that you have witnessed an exchange between two parties passing the buck in a situation in which we should all be simply discussing trade relations between our two countries. I wanted to tell you that.

My next question is actually important, because we have to face reality head on. There have been obvious indications of corruption in relation to Ukraine. It is a real problem and it is recognized by Ukraine itself. In the present free trade agreement there is a chapter about transparency, anti-corruption and responsible business conduct. This chapter goes further than the previous one. While there are not really any binding provisions, businesses are urged to self-regulate, if I may call it that.

Let's stick to just the intent, even if this chapter is inadequate in our view. Could you update us on what Ukraine has found and the measures that have been taken so far to combat corruption?

[Yuliya Kovaliv]

Thank you.

Really, Ukraine has done a lot, before and during the war, to increase transparency and accountability, and to demonstrate to partners that this is one of the important things in Ukraine's reform path. All the major points of Ukraine's policy towards building transparency have been committed, which was acknowledged by the International Monetary Fund. We have a separate chapter on transparency, including measures like the renewal of electronic declarations for all public servants in Ukraine during the war. This is probably one of the widest systems of electronic declarations of all the public servants in the world.

The second is the new legislation that was recently adopted to prevent money laundering, which is one of the most modern now. It is the package of seven points, as I mentioned to you, in our discussions with the European Commission. There is more legislation on the way within the next two months to increase the capacity of the institutions that are dealing with the investigation of corruption cases in Ukraine. This is a very important thing on Ukraine's reform path.

If you look at the assessment of our partners that are working deeply on this file, there is huge progress. Even the Russian war does not stop the Ukrainian government from progressing on this file. Of course—

[The Vice-Chair, Conservative, Kyle Seeback]

Thank you, Ambassador.

I'm sorry. We're over time again.

We'll go to Ms. Idlout for two and a half minutes.

[Lori Idlout, NDP, Nunavut, NU]

Qujannamiik, Iksivautaq. Thank you, Chair.

Welcome. It's a pleasure to be here to replace my colleague for the time being.

I wanted to take this opportunity to welcome you to the committee and invite you to come to Nunavut. I have a beautiful riding. It's probably the most beautiful in Canada. It's the biggest riding in Canada as well, so you have a lot of choices when coming to visit Inuit homelands.

I wanted to ask you about the important chapter on trade and indigenous peoples. I was very pleasantly surprised to see this included in the free trade agreement between Ukraine and Canada. I wonder if you could share with us your experience or what your ideas might be to make sure indigenous peoples in both countries have access to the benefits of this agreement.

Qujannamiik.

[Yuliya Kovaliv]

Thank you.

Indeed, it's an important new chapter in our agreement.

Ukraine, like Canada, has a strong presence of indigenous people. For us, they are the Crimean Tatars, and they have been significantly oppressed for many years, including since Russia's illegal occupation of Crimea in 2014.

The chapter on trade and indigenous peoples has in mind to establish a bilateral committee to facilitate co-operation and to address barriers and challenges that prevent indigenous people from actively engaging in trade. This chapter will support our bilateral consultations on how to shape policies and support indigenous people to become more active in trade and in the business sector in general.

It's very important for us because we believe the Canadian experience, through the instrument that the modernized free trade agreement is building, will help Ukraine to shape policies and more actively support our indigenous people. I think it will also help to bring ties between the indigenous peoples of Ukraine and Canada.

[The Vice-Chair, Conservative, Kyle Seeback]

Thank you, that's all the time.

Speaking of the time and looking at the time, we have about five minutes. I'm going to shorten these rounds to two and a half minutes for Mr. Martel and Ms. Fortier.

Mr. Martel, please go ahead.

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

Thank you, Mr. Chair.

Thanks to the witnesses for being here with us.

Once again, I want to confirm our complete support for Ukraine, of course. This is important. We have always supported free trade. As you know, our party, the Conservative Party, was the first to establish a free trade agreement between Ukraine and Canada.

I would like to make one small observation. The Liberals are asking us to be united, but we might say that sometimes, as we have seen, my colleague and I, they virtually generate division. I think it is important that we all be united to achieve a common goal.

Since I do not have a lot of time, I would like to discuss something specific with you.

Do you think we should have included a detailed chapter in the 2023 Canada-Ukraine Free Trade Agreement on the future rebuilding of the power infrastructure? We know that it is crucial and that energy dependence on Russia is a fact at present. We know that Ukraine is going to have to make itself independent in this area later.

[Yuliya Kovaliv]

Once again I want to reiterate that I'm not an expert in how the free trade agreement is structured, but I would say that the important approach towards Ukraine's rebuilding is in the development and the work in the different sectors. As you mentioned, around $411 billion of damages covers a lot of sectors. Energy is among the top five priorities for Ukraine, so is infrastructure, the agri-sector, IT, digital tech, military tech and demining.

Ukraine is also working closely today with the European Union under the first stage of $50-billion package of EU support that will also cover the rebuilding efforts. Now there is room for united efforts among the allies—Canada, U.S., the European Union and far more—to be able coordinate the efforts and to coordinate the regulations, including the ones in the energy sector, so that it will help and facilitate the companies and the government actions within the sectors to engage in the rebuilding, including the further development of the energy sector.

Thank you.

[The Vice-Chair, Conservative, Kyle Seeback]

Thank you, Ambassador.

Ms. Fortier, you have two and half minutes.

[Mona Fortier, Liberal, Ottawa—Vanier, ON]

Thank you, Mr. Chair.

Thank you very much for being with us today, Ambassador.

As you know, my riding, Ottawa—Vanier, fully supports all the work you are doing. You have our unconditional support.

I want to talk about one part of the chapter facilitating equal access to and the ability to benefit from the opportunities created by the agreement for women and men, and supporting the conditions for women's full participation in domestic, regional and international trade and investment. I believe that you might be able to share with us how women's participation in this accord agreement can be a benefit for both countries.