Canada vs. Russia: Who has more to lose in latest round of sanctions?

TORONTO – A day after Canada further expanded economic and travel sanctions against Russian entities, bringing the total to 35 groups, President Vladimir Putin has banned food imports from Canada for up to one year.

So which country has more to lose?

It’s a difficult question to answer: Canada is targeting individual people, entities like shipbuilding companies, and sectors like the banking industry.

Scroll down for a list of Canadian sanctions against Russian entities.

To try to understand the impact, you’d have to look at factors including how much business those companies are doing in Canada, and whether the sanctions will shut down those businesses or just cause them to seek other markets.

Russia’s ban includes meat, fish, milk and milk products, and fruit and vegetables, but will mostly affect the pork industry. Canadian agricultural/agri-food exports to Russia, excluding seafood, totaled $321,913,234 in 2013, according to Foreign Affairs and Trade Development Canada. Meat accounted for almost 20 per cent of that.

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Manitoba pork producers say a Russian ban on food imports from Canada will hurt the industry. Charlie Neibergall / The Canadian Press

“To some extent it’s apples and oranges, since most of the Canadian sanctions are in finances and services, whereas the Russian countersanctions are in goods,” said David Welch, CIGI Senior Fellow and Chair of Global Security at the Balsillie School of International Affairs, University of Waterloo.

“Just eyeballing the lists, I would say this tit-for-tat is going to hurt Russia more than Canada.  We can find alternative markets for our food products more easily than Russia can find alternative sources.”

READ MORE: Manitoba pork group says Russian sanctions will hurt

Welch said the food import restrictions announced by Russia “stunned” him, noting elite Russians are used to imported Western foodstuffs.

“If you’re an autocrat, a good rule of thumb is not to go after your citizens’ food supply—particularly the citizens whose support you most require,” he said.

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When it comes to the effect of Canada’s sanctions on Russia, international trade expert and University of Ottawa law professor Tony Vanduzer suggests the sanctions imposed by other countries—though not identical to Canada’s—will play a part.

“It’s a little bit hard to know to what extent there are other business opportunities for those Russian entities that they could realize as an alternative to dealing with Canada,” said Vanduzer, who has worked in Russia on a number of past Canadian government-funded projects advising the country on what it would need to do to join the World Trade Organization.

He said the Canadian government’s position suggested the sanctions are predominantly motivated by foreign policy—rather than economic—considerations.

“They’re typically less concerned about the specific dollar impact in Russia as compared to wanting to be seen to be taking strong action against the category of significant Russian businesses. … in effect, saying: ‘It was the right thing to do, and pressure needs to be put on Russia’ in relation to its perceived actions in Ukraine.”

READ MORE: Are sanctions against Russia working?

Whether the sanctions will result in such a negative impact on Canadian businesses that there will be push-back against the government’s decisions remains to be seen.

“If enough people complain—and certainly agricultural production [is] a politically astute industry—they may put pressure on the government and it may be that at some point the government will be responsive to that pressure.
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“But they don’t seem to be suggesting that they’re going to do that.”

Foreign Affairs and Trade Development said Canada’s national interests are being put first, and “business interests alone” will not dictate policy.

“The steps Canada has taken have not been made without careful consideration of their potential impact on Canadian business interests abroad and at home,” said press secretary Adam Hodge in an email to Global News. “Sustained, strong and co-ordinated action among like-minded countries is the best way to ensure that our actions have the maximum impact on the Putin regime.”

Canada’s sanctions against Russian entities (not including Russian individuals or Ukrainian individuals/entities):

August 6:

  • Bank of Moscow
  • Dobrolet Airlines
  • Russian Agricultural Bank
  • Russian National Commercial Bank
  • United Shipbuilding Corporation
  • VTB Bank OAO

July 24:

  • Almaz-Antey
  • Federal State Unitary Enterprise State Research and Production Enterprise Bazalt
  • Gazprombank OAO
  • JSC Concern Radio-Electronic Technologies
  • JSC Concern Sozvezdie
  • JSC MIC NPO Mashinostroyenia
  • Kalashnikov Concern
  • KBP Instrument Design Bureau
  • Novatek
  • Vnesheconombank

May 4:

  • Aquanika (a.k.a. Aquanika LLC; a.k.a. LLC Russkoye Vremya; a.k.a. Obshchestvo S Ogranichennoi Otvetstvennostyu Russkoe Vremya; a.k.a. Russkoe Vremya OOO; a.k.a. Russkoye Vremya LLC)
  • Avia Group LLC (a.k.a. Avia Group LTD)
  • Avia Group Nord LLC
  • CJSC Zest (a.k.a. Zest Leasing)
  • InvestCapitalBank (a.k.a. InvestKapitalBank; a.k.a. OJSC InvestCapitalBank; a.k.a. Open Joint Stock Company InvestCapitalBank)
  • JSB Sobinbank (a.k.a. Sobinbank)
  • Sakhatrans LLC (a.k.a. Obshchestvo S Ogranichennoi Otvetstvennostyu Sakha (Yakutskaya) Transportnaya Kompaniya; a.k.a. Sakhatrans OOO)
  • SMP Bank (a.k.a. Bank Severny Morskoy Put; a.k.a. SMP Bank Open Joint-Stock Company)
  • Stroygazmontazh (a.k.a. Limited Liability Company Stroygazmontazh; a.k.a. Stroygazmontazh Corporation; a.k.a. “SGM”)
  • Stroytransgaz Group (a.k.a. Stroytransgaz; a.k.a. “STG Group”)
  • Stroytransgaz Holding (a.k.a. STG Holding Limited; a.k.a. STG Holdings Limited; a.k.a. Stroytransgaz Holding Limited; a.k.a. “STGH”)
  • Stroytransgaz LLC (a.k.a. OOO Stroytransgaz)
  • Stroytransgaz OJSC (a.k.a. OAO Stroytransgaz)
  • Stroytransgaz-M LLC
  • The Limited Liability Company Investment Company Abros (a.k.a. LLC IC Abros)
  • Volga Group (a.k.a. Volga Group Investments; a.k.a. Volga Resources; a.k.a. Volga Resources Group)

April 28:

  • ExpoBank
  • RosEnergoBank

March 21:

  • Bank Rossiya, the personal bank for senior officials of the Russian Federation

For links to all of the sanctions Canada has imposed upon individuals and entities—both Russian and Ukrainian—visit this government page and click through each separate “Sanctions List” link.

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