Canada revokes Russian sanctions exemption that allowed return of Nord Stream turbine

Canada is revoking the exemptions to sanctions that allowed a Montreal company to repair turbines for a natural gas pipeline operated by Russian state-owned energy giant Gazprom.

A joint statement from Foreign Affairs Minister Melanie Joly and Natural Resources Minister Jonathan Wilkinson on Wednesday said the decision to revoke the temporary waiver was made after Russia failed to return the Nord Stream 1 pipeline to full capacity once Canada agreed to return an under-repair turbine in July, which Moscow claimed was essential for the pipeline’s operation.

“In fact, Russia has refused to accept the turbine that had been repaired and returned under this waiver, and it remains in Germany to this day,” the statement reads.

The permit granted Siemens Canada an exemption to sanctions against Russia for two years starting in early July and would allow the company to import and repair up to five more turbines as per their maintenance schedule.

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The parts would be sent back to Germany for use in Gazprom’s Nord Stream 1 pipeline, which ordinarily supplies natural gas to that country but is currently shut down, with the Russian state-controlled company blaming problems on a gas leak.

That leak was created in September by an explosion on part of the pipeline that runs under the Baltic Sea that Swedish investigators have called an act of “sabotage.”

The Ukrainian government criticized Canada for issuing the waiver this summer, which Ottawa said at the time was necessary to support Europe during the energy crisis caused by the war.

The Ukrainian Canadian Congress urged the federal government in September to “show strength” by cancelling the permit and to further toughen its sanctions regime against Russia.

The statement from Joly and Wilkinson said Russian President Vladimir Putin “has been forced to show that his intention was never to return Nord Stream 1 to full operation” despite the Kremlin blaming Canada for prolonging its reduced exports at the time.

Issuing the permit was Canada’s way of calling “Putin’s bluff,” it added, repeating language Joly used in the summer in the face of intense scrutiny.

2:22 Canada called Putin’s bluff with turbine return for Russian pipeline: Joly

With the pipeline inoperable, the ministers said the sanctions waiver “no longer serves its intended purpose.” The decision to revoke it came after discussions with Ukrainian, German and other European allies, they added.

Prime Minister Justin Trudeau discussed “Europe’s energy security, in particular related to critical supply chains” with German Chancellor Olaf Scholz on Tuesday, according to a readout from the prime minister’s office.

He’s set to speak to Ukrainian President Volodymyr Zelenskyy on Thursday.

At the time Canada issued the waiver, Zelenskyy called the move “absolutely unacceptable” in a video address, and Ukrainian-Canadians protested outside Parliament.

Despite Western support for Canada’s decision, critics predicted the move would begin to weaken allies’ united economic pressure on Russia for its invasion into Ukraine.

“This decision to send the turbines back … may be seen as the straw that broke the camel’s back, and we may start to see a relenting of pressure from NATO, from the West in general,” Retired Gen. Rick Hillier, a former chief of defence staff, told reporters in July.

Trudeau argued that Putin and Russia were using the turbine as a way to sow discord within the western alliance.

Canada, the United States and Europe have continued to add new sanctions against Russia and top Russian officials since the war began in February.

—With files from the Canadian Press