Russia’s invasion of Ukraine, supported by Belarus, is a violation of international law and threat to the rules-based international order. Canada is taking further action to ensure those who do not support the rules-based international order cannot benefit from it.
Today, Chrystia Freeland, Deputy Prime Minister and Minister of Finance, and Mary Ng, Minister of International Trade, Export Promotion, Small Business and Economic Development, announced that the Government of Canada has issued the Most-Favoured-Nation Tariff Withdrawal Order (2022-1), removing these countries’ entitlement to the Most-Favoured-Nation Tariff (MFN) treatment under the Customs Tariff.
“Today, I am announcing that Canada will be the first country to revoke Russia’s and Belarus’s Most-Favoured-Nation status as a trading partner under Canadian law,” Chrystia Freeland, Deputy Prime Minister and Minister of Finance said. “We are working closely with our partners and allies to encourage them to take the same step. Simply put, this means that Russia and Belarus will no longer receive the benefits – particularly low tariffs – that Canada offers to other countries that are fellow members of the WTO. The economic costs of the Kremlin’s barbaric war are already high, and they will continue to rise. Canada and our allies are united in our condemnation of President Putin and his war of aggression, and we are united in our support for the remarkable Ukrainians who are so bravely resisting his assault.”
This Order results in the application of the General Tariff for goods imported into Canada that originate from Russia or Belarus. Under the General Tariff, a tariff rate of 35 per cent will now be applicable on virtually all of these imports. Russia and Belarus will join North Korea as the only countries whose imports are subject to the General Tariff.
This measure has been taken under section 31 of the Customs Tariff, and applies for 180 days, unless extended by a resolution adopted by both Houses of Parliament. A tariff rate of 35 per cent will apply to virtually all imports. Where MFN rates are higher, the higher rates will continue to apply. This measure complements other recent measures targeting trade with Russia and Belarus, which will come into force imminently, including the ban on crude oil imports from Russia and Belarus, announced on February 28, 2022, and the ban on Russian-owned or registered ships and fishing vessels from Canadian ports and internal waters, announced on March 1, 2022.
This measure is also in addition to the sanctioning of the Russian Central Bank announced on February 28, 2022, and the blocking of select Russian banks from the SWIFT messaging system, which is a cornerstone of the global interbank payments system. Also on February 28, Canada also additionally sanctioned 18 individuals under the Special Economic Measures (Russia) Regulations.
“It is the direct result of Russia’s unjustified invasion of Ukraine that has triggered our government’s removal of the Most-Favoured-Nation Tariff (MFN) treatment on almost all imports from Russia and Belarus,” Mary Ng, Minister of International Trade, Export Promotion, Small Business and Economic Development said. “Canada is stepping up by putting significant economic pressure on Russia, and is providing resources to Ukraine including military equipment and emergency humanitarian support. Canada remains resolute in our solidarity with Ukraine and the Ukrainian people, and we will continue supporting them as they fight to defend their freedom and democracy.”
What Canada has done
On February 22, in response to Russia’s decision to recognize the independence of the Donetsk and Luhansk regions of Ukraine, Canada announced it will:
- Impose new sanctions against Russia, including new prohibitions on direct and indirect dealings in Russian sovereign debt;
- Send additional military contributions to support the North Atlantic Treaty Organization (NATO) through Operation REASSURANCE, including up to an additional 460 personnel to the approximately 800 currently deployed in Europe in support of NATO; and
- Authorize approximately 3,400 Canadian Armed Forces personnel across all branches of the service to deploy to the NATO Response Force should they be required by NATO.
On February 24, 2022, Canada imposed sanctions against Russia under the Special Economic Measures (Russia) Regulations and the Special Economic Measures (Ukraine) Regulations, including:
- Imposing restrictions on 58 additional Russian individuals and entities, including banks, financial elites and their families;
- Sanctioning members of the Russian Security Council, including the Defence Minister, the Finance Minister, and the Justice Minister;
- Imposing restrictions on four Ukrainian individuals for their collaboration with Russia to destabilize Ukraine; and
- Restricting exports to Russia by halting new export permit applications and cancelling valid export permits, with a limited number of exceptions for critical medical supply chains.
Since Russia’s attempted annexation and illegal occupation of Crimea in 2014, Canada has sanctioned over 1,000 individuals and entities, with many of these sanctions undertaken in coordination with our allies and partners. Canada’s sanctions will impose asset freezes and dealings prohibitions on listed persons.
In response to Russia’s threats and military build-up in and around Ukraine in recent weeks, the Government of Canada invested in additional support for Ukraine. This includes through the extension and expansion of Operation UNIFIER, the Canadian Armed Forces’ military training and capacity-building mission in Ukraine, up to $620 million in loans, and the provision of nearly $10 million in lethal and non-lethal equipment and ammunition.
On February 25, Canada announced that it will match every donation made by individual Canadians to the Canadian Red Cross between February 24, 2022, and March 18, 2022, up to a maximum of $10 million.
On March 1, Canada announced an additional $100 million in humanitarian assistance to help experienced partners address the most pressing humanitarian needs on the ground in Ukraine and neighbouring countries.
This measure is in addition to the many punitive actions that Canada and its allies have already taken against Russia and Belarus as a result of the illegal and unprovoked invasion of Ukraine, including other trade restrictions under the Special Economic Measures Act.