National Defence Committee on March 9th, 2022

[Alex Ruff, Conservative, Bruce—Grey—Owen Sound, ON]

All right. I guess you're not quite going the line that I'm thinking. I'm thinking that the continuation of the air strikes in Ukraine, and potentially an incursion into NATO countries, is the preliminary risk we'd see before we'd have to worry about a Russian ground strike of any type—again, avoiding the nuclear side. Would you agree with that statement?

[MGen Paul Prévost]

I would agree that any attacks on the alliance would pose a risk. We'll be ready to defend against that. I think the greater risk would be to Putin himself.

[Alex Ruff, Conservative, Bruce—Grey—Owen Sound, ON]

On that line, though, if the air risk is the biggest thing, would you agree that ground-based air defence and air defence in general is a crucial military capacity and capability, needed not only for NATO but for the Ukrainians themselves?

[MGen Paul Prévost]

Mr. Chair, I'll clarify here. An air attack would be one risk. There are other risks out there. I think you heard Major-General Wright talk about those risks earlier this week or last. Cyber is a risk. Space is a risk. A lot of new capabilities other than kinetic capabilities are risks.

Any of those would be a risk to the alliance but would be a greater risk for Putin himself.

[Alex Ruff, Conservative, Bruce—Grey—Owen Sound, ON]

All right. I still want to think...because, considering air strikes is what he's using a lot of, and I think that's the biggest risk to the humanitarian efforts as well in-country, is the ground-based air defence.

The Prime Minister was just asked earlier today about replacing our ground-based air defence within the Canadian Forces and speeding up the procurement process. He said it would be done rapidly. Considering that the slated first early delivery is 2026, how much faster could we speed up the procurement of air defence capability for the Canadian Armed Forces?

[The Chair, Liberal, John McKay]

You have 15 seconds, please.

[MGen Paul Prévost]

Mr. Chair, we're obviously looking at that right now. We're looking at the current project that we have, how fast we can accelerate and what other mitigation we can put in place in the meantime. Let's not forget that there are 30 countries in the NATO alliance. A lot of our allies are helping where we have gaps.

[Alex Ruff, Conservative, Bruce—Grey—Owen Sound, ON]

Thank you.

[The Chair, Liberal, John McKay]

Thank you, Mr. Ruff.

Mr. Gaheer, you have five minutes, please.

[Iqwinder Gaheer, Liberal, Mississauga—Malton, ON]

Thank you, Mr. Chair. It's great to be back.

Thank you to the witnesses for making time.

On February 25, 2022, the Prime Minister stated that Canada would impose sanctions directly on Russian President Vladimir Putin and his inner circle of advisers. The new sanctions were in addition, obviously, to previous sanctions that were announced that targeted Russian oligarchs, their families, Russian banks, Russian financial entities and members of Putin's inner circle. How do these sanctions align with and complement those of our allies?

[MGen Paul Prévost]

I think this question could go to Heidi, potentially.

[Heidi Kutz]

Chair, I'd be happy to take this question.

Since the beginning, Canada has worked very closely indeed with our partners, with the United States, the U.K., Australia and in close collaboration with the European Union, in order to discuss and align our sanctions measures for maximum impact, immediate impact, on Russia for its actions.

In that spirit, you will see symmetry from Canada and our allies in our efforts on the sanctioning of individuals, entities, financial institutions and members of the Russian State Duma who voted to recognize the independence of Donetsk and Luhansk. As well, a number of measures have come forward in recent weeks, including support from Canada to partners to connect key Russian banks from SWIFT global interbank payments system and other measures.

Canada continues to work with our partners and like-mindeds to align our economic measures for maximum impact and influence to try to get President Putin to desist from his current activities.

[Iqwinder Gaheer, Liberal, Mississauga—Malton, ON]

Great. Thank you.

Could you explain why it's important to move in lockstep? How does that generate a greater impact?

[Heidi Kutz]

The reason it's important to move in lockstep is simply critical mass. Canada's economic relationship with Russia is different from other countries', and therefore, if it's possible to work in lockstep to limit trade and opportunities to a number of countries and through a number of supply systems, it increases pressure on the Russian economy, with a view to stronger pressure to change the direction of the Putin regime.

[Iqwinder Gaheer, Liberal, Mississauga—Malton, ON]

Great, and is the government currently working on further sanctions packages?

[Heidi Kutz]

Absolutely: We continue to work closely with the like-minded in terms of additional measures should the situation continue.

[Iqwinder Gaheer, Liberal, Mississauga—Malton, ON]

I want to touch on another point that you just mentioned. On February 25, the Prime Minister also called for Russia's removal from SWIFT, the Society for Worldwide Interbank Financial Telecommunications.

According to the Russian national SWIFT association, there are around 300 banks and organizations in Russia that use SWIFT, and more than half of the Russian credit organizations are represented in SWIFT.

What impact is Russia's removal from SWIFT having?

[Heidi Kutz]

Essentially the impact of its removal will be significant restrictions on their ability to send money in and out of the country, effectively pausing Russia's major imports and exports.

[Iqwinder Gaheer, Liberal, Mississauga—Malton, ON]

Currency-wise, is it Russian currency? Is it all currencies?

[Heidi Kutz]

On that precisely, I wouldn't be able to give you an adequate response right now.

[Iqwinder Gaheer, Liberal, Mississauga—Malton, ON]

Sure.

Could you elaborate on what impact this will have on the Russian economy? Is it crippling? Where is that on the spectrum?

[Heidi Kutz]

Well, I would certainly say that it's grave, including that we also have seen, in addition to those economic measures that nations have put in place, the activity of private enterprises in reaction also withdrawing from the Russian market, so that what we are seeing is that this is having a significant impact on Russian banks, their financial system and their ability to transact.

[The Chair, Liberal, John McKay]

You have about 15 seconds.

[Iqwinder Gaheer, Liberal, Mississauga—Malton, ON]

I do have a bit of sympathy for the Russian people. What's the long-term impact? The ruble is in free fall and the Russian stock exchange still hasn't opened. What's the long-term impact of this?

[The Chair, Liberal, John McKay]

Briefly, please....