Canada has committed $216 million over five years to support Ukraine’s rebuilding efforts and is also exploring ways that reachable Russian assets might be cashed out to further that purpose. The newly released 2024 federal budget affirms Canada will contribute to the European Bank for Reconstruction and Development (EBRD) fund, which has a target to raise €4 billion, or approximately CAD $6.3 billion, from allied nations.
Canada’s share is to be conveyed in annual installment of $43 million, beginning in the fiscal year 2025-26 and stretching to 2029-30. That could potentially be augmented with funds indirectly flowing from Russia.
The Canadian government is proposing that various Russian-owned assets located outside that country — which have been subject to international sanctions since Russia’s invasion of Ukraine — could be converted to proceeds to be channelled to Ukraine. This represents a potential revenue stream estimated at USD $280 billion.
“It is Canada’s position that these assets can be redirected to benefit Ukraine, consistent with international law,” the budget document states. “Russia’s illegal war against Ukraine has destroyed schools, homes, power generators, theatres, hospitals and much more. Russia should pay for the damage it has done.”
The European Union’s windfall profits mechanism, which enables a special levy on companies or industries that reap extraordinary profits due to sudden or remarkable changes in economic conditions, is suggested as one “innovative approach” that could be adapted to provide the basis for converting Russian assets into funds for Ukraine. As well, the budget document notes that other experts have raised the possibility of creating a “special purpose vehicle” with a similar objective.
“Canada is committed to work with allies to explore all possible legal mechanisms to make full use of the assets currently immobilized in our jurisdictions, including for the purpose of increasing support for Ukraine in the short term,” the budget document advises. “These discussions, and any consensus achieved, will be used to advance necessary amendments to Canada’s sanctions regime.”
