Opinion: Ukraine’s economy needs Canada’s support

Goldy Hyder is President and CEO of the Business Council of Canada.

Farmers prepare to sow sunflowers in a field in Cherkaska Lozova on the outskirts of Kharkiv in eastern Ukraine on May 28.Bernat Armangue/Associated Press

Ukraine’s new ambassador-designate to Ottawa, Yulia Kovaliv, describes her country’s economy as the “third front” in the war caused by Russia’s unprovoked invasion. This is a decisive front on which Canada can engage. Just as we already provide humanitarian aid and military equipment, we must also help support the Ukrainian economy.

Ukrainians have committed countless heroic acts of resistance since Russian troops crossed the border in February. Such a list must include those who risk their lives daily to protect the Ukrainian economy. Every morning, millions of Ukrainians go to work even though their workplaces may come under missile fire.

Remarkably, despite the devastation in areas subjected to the most horrific fighting and shelling, as of last month less than half of all Ukraine-based businesses had been forced to scale back operations due to the Russian invasion, and less than 5% of Ukrainian businesses had been forced to shut down entirely.

Yet no modern, advanced economy can sustain itself without trade and investment. Ukraine wants to do business with Canada, and to that end, here are three ways Canada’s public and private sectors can answer the call.

First, we need to update our 2017 free trade agreement. Our two countries were committed to doing this before the invasion and these efforts must now be given greater priority. We should focus, in particular, on expanding the agreement to cover investment and trade in services, as Ukraine’s services sector has proven to be particularly resilient.

In recommending this, we know that Ukrainian officials are seized with the tragically urgent situation in their country. Canada should therefore look to areas where it can act unilaterally. That is why the Business Council of Canada supports the removal of tariffs on goods from Ukraine and urges the removal of other unnecessary barriers to trade.

The reopening of our embassy in Kyiv is an important development given that negotiating in person is always more efficient, effective and conducive to reaching a deal. The gradual restoration of better access to our Trade Commissioner Service will also help Ukrainian companies connect with potential Canadian customers.

A second way to help nurture and support the Ukrainian economy is to seek opportunities to work with Ukraine’s agricultural sector. Ukraine and Canada are among the top 5 wheat exporters in the world. Despite the war, Ukrainian farmers cultivated 70% of the country’s arable land.

Given the Russian offensive in the eastern regions of the country, a looming challenge for the Ukrainian economy could be a shortage of capacity to process and export agri-food products for the resulting autumn harvest. Here, Canadian food processors, equipment manufacturers and other agri-food industry players may be able to help.

During his recent visit to Ukraine, Prime Minister Justin Trudeau promised that the government would help Ukraine find ways to export the grain it has in stock and is ready to ship. Again, Canadian companies, those in the transportation and logistics sectors, may be able to offer assistance.

Finally, a third area in which we should seek to develop bilateral trade relations is the energy sector. Russia’s invasion has had a seismic effect on global energy markets, particularly in terms of oil and gas. Ukraine and Canada called for accelerating the energy transition to renewable and low-emission resources.

In this, we must deal with both geopolitical and geological realities. Canadian companies have worked for years with Ukrainian partner agencies to help reduce dependence on Russian resources, including uranium. This work continues today, and it has never been more important for Ukraine or for the rest of Europe.

Russian forces have damaged – and in some cases destroyed – vital energy infrastructure in Ukraine. Their greatest need, therefore, may be for Canadian engineering and construction companies to contribute to the reconstruction and recovery effort, now and, as Ms. Kovaliv proudly asserts, “after victory”.

We all look forward to the day when Ukraine’s sovereignty and territorial integrity will be restored and circumstances allow business leaders to travel to Kyiv and meet with their Ukrainian counterparts. In the meantime, the best way for Canada to help Ukraine – aside from military support – is to support its economy.

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Christi C. Elwood