Canada Leading the Way
Ever since the start of the Ukrainian Revolution,
Canada has lead the Western world in its support for Ukraine. Canada was the
first to impose sanctions on the Yanukovych regime and is currently the most
vocal and harsh critic of Russia for its invasion of Ukraine, which Prime
Minister Stephen Harper proved during this week’s meetings in Europe.
Canada is probably making the strongest case of
pursuing a greater good by imposing sanctions on Russia despite likely economic
consequences for the Western countries. In all fairness, Canada is much less
dependent on Russia economically than Europe which imports at least 30% of its
energy from that country. In terms of the overall Canadian economy, even a
complete disruption of trade and investment with Russia would not have a
serious effect. In January 2014, merchandise trade with Russia represented only
0.1% and 0.3% of the total Canadian imports and exports respectively, while
investment in Russia accounted for just 0.7% of the total Canadian direct
investment abroad in 2012 (Statistics Canada).
That said, there are prominent Canadian companies with
significant ties with Russia. In particular, Kinross Gold Corporation, which
operates two gold projects in Russia; Bomdardier Inc., which is eyeing a joint
venture in Russia and continued sales of aircraft there; SNC-Lavalin Group with
interests in Russian energy-related projects. Since the beginning of the
tensions, the Canada Eurasia Russia Business Association and Kinross Gold have
addressed the government with pleas to consider Canadian interests in Russia
while imposing sanctions. So far, the government maintains its stance and only
offers sympathy to the companies with interests in Russia. Given that Russia is
not yet showing readiness to diffuse the situation around Ukraine, Canadian
investors may need to take into account possible negative fallout for these
companies. In particular, in the gold-mining segment, there are a number of
companies without exposure to Russia, and individuals should do their own
research to discover which ones have better prospects.
By: Ukrainian
Credit Union Limited
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