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Canada’s trade with Russia has plummeted since its invasion of Ukraine



Canada’s trade with Russia plummeted in the first 10 months after Moscow’s invasion of Ukraine a year ago, with Ottawa’s economic measures barring the export of everything from forklifts to barbers’ chairs.

Yet certain sectors have emerged largely unscathed by the restrictions, as businesses grapple with a constantly expanding list of restrictions and sanctions.

Industry Canada data show that between March and December 2022, the value of total imports from Russia plunged 78 per cent to $414 million, from $1.9 billion during the same 10-month period in 2021.

By November and December, Canadian imports from Russia had fallen 98 per cent compared to the year before. Over both months, the total value of imports from Russia was $9 million, compared to $433 million in the last two months of 2021.


The value of exports from Canada to Russia between March and December fell 91 per cent, dropping to $52 million in 2022 from $584 million in 2021.

“The Canadian footprint in Russia has collapsed,” said William Pellerin, an Ottawa-based trade lawyer with the firm McMillan LLP.

Federal data show Canada is still importing a significant amount of pneumatic tires, aviation turbine fuel and plywood. But only a handful of the top 25 products imported from Russia in both 2021 and 2022 saw an increase.

That includes nickel ores, which Canada tends to process for export, as well as ammonium nitrate, mostly used in fertilizer. The imports of both more than doubled in value between the two years, though Canada didn’t import either product after June 2022.

Pellerin said the fertilizer data reflect the annual cycle of farmers making purchases ahead of the spring sowing season. The purchases related to this year’s season will show up in later data, he said.

Ottawa imposed a 35 per cent tariff on Russian and Belarusian products in March, which it expects will yield $115 million in revenue that Canada plans to transfer to Ukraine.

The Liberals have said they accept that tariffs and restrictions have an impact on Canada’s economy, but they argue it’s worth taking a stance in support of international rules.

Canada is the only G7 country to include nitrogen fertilizer in its tariff regime, to the ire of eastern Canadian growers, who say it unfairly drives up the cost of products at a time of high inflation.

About half a dozen products saw an increase in exports in 2022 versus 2021, but many of them saw most or all of that occur in January and February, before Canada imposed sanctions. For example, Canada exported $85 million in aircraft over 15,000 kg to Russia last year, all of it in February 2022.

As part of the firm’s complex regulatory solutions group, Pellerin said his clients include Canadian and international firms navigating sanctions on Russia, but not Russian themselves.

He said the drop in Canadian exports to Russia partially stem from a list of weapons-related goods that Ottawa banned for export in May, many of which don’t consist of actual weaponry.

The list includes motorcycles and surgical or veterinary furniture including “dentists’ chairs” as well as “barbers’ chairs and similar chairs, having rotating as well as both reclining and elevating movements.”

The list also includes cranes, X-ray equipment and forklift trucks, because such goods might be appropriated for military use. Canadian companies can only export these items if they secure a waiver.

“We’re displacing Canadian exports, and they’re being replaced by Chinese supply,” Pellerin argued.

He noted that trade in services have also taken a major hit, in particular for companies that help with mining operations in Canada and Russia, given their similar terrain.

Pellerin has also come across companies based in Dubai or Europe that have significant exchanges with Russians, and others in which Russian oligarchs have partial control or ownership.

“Not a week that goes by that we don’t kick up a rock and there is a sanctioned oligarch in some proposed business dealing that we can no longer do,” he said.

“What the average Canadian does not see is all the business that doesn’t get done with Russian parties as a result of Canadian sanctions — and frankly all the risk that is being borne by international businesses as a result.”

For example, Canadian companies might suddenly discover that they’ve been doing business for years with a firm that has minority Russian ownership, making it unclear whether they need a waiver to continue.

Canadian companies apply for these exemptions by making the case that the economic activity would not violate the intent of sanctions, and a cabinet minister signs off on the waivers.

Pellerin argues this makes the process “more political than is truly independent or legal” and notes there is very limited detail in the guidance Global Affairs Canada posts online, compared to that provided by allied countries.

The department gave no indication it would improve the level of detail it provides, with spokesman Grantly Franklin saying in an email that the waivers “are evaluated on a case-by-case basis, and we have a rigorous due diligence process in place.”

Pellerin said the sanctions team is “doing everything that they can on a shoestring operation,” with some exemptions taking months to process.

In the past year, Canada has sanctioned more than 1,600 people in relation with Russia’s war in Ukraine. Yet the government says it cannot determine how many more of its employees have been assigned to work on sanctions and exemptions.

“Hundreds of Global Affairs Canada employees may be contributing to the sanctions effort at any given time. For these reasons, it is not possible to specify the exact number of people working on sanctions at any given time,” Franklin wrote.

In 2021, Russia stood as Canada’s 28th most valuable trading partner, falling last year all the way to 53rd place.

Russia’s ambassador in Ottawa, Oleg Stepanov, lamented the drop in trade in an interview this month with state news agency RIA Novosti.

“Ottawa’s unfriendly actions have significantly affected the dynamics of bilateral trade,” he said in a Russian-language interview.

“We predict that the negative trend will continue this year.”

This report by The Canadian Press was first published Feb. 23, 2023.

This is a corrected story. An earlier version stated the time frame used to calculate post-sanction trade data was eight months.


Sharp hike in federal alcohol excise duty will drive up price of booze, Ottawa distilleries and breweries say – Ottawa Citizen



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For Ottawa distilleries and breweries, April 1 each year brings, rather than jokes or pranks, increases in the federal excise duty they must pay. This year, the especially steep hike is no laughing matter.

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The alcohol excise duties imposed on manufacturers are adjusted annually based on inflation. But while booze businesses have coped in recent years with two-per-cent increases, this year’s duty is set to increase 6.3 per cent as of Saturday.

The result, Ottawa distilleries and breweries say, will be more expensive alcoholic beverages for consumers, including restaurants, bars and the general public, as manufacturers who are still coping with pandemic-induced pressures, are forced to recoup the latest additional expenses.

“It’s pretty much a foregone conclusion that prices across the board have to go up. They have to,” says Marc Plante, a co-owner of Stray Dog Brewing Company in Orléans. “It’s not going to be, ‘Boom! Here comes the increase,’ and everyone’s going to see it. It will be slow. It will be subtle.”

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Citing a press secretary for Finance Minister Chrystia Freeland and Canada Revenue Agency figures, the Canadian Press reported that the increased federal excise tax works out to less than a penny on a can of beer and three cents on a 750-mL bottle of wine.

Still, Plante says the beers his micro-brewery makes will be more expensive “eventually,” although he can’t when the hike will happen or how big it will be. Stray Dog, which launched in 2017, has held its prices stable for several years, absorbing increased expenses and even debts incurred during the pandemic, Plante says.

He compares his company’s efforts to cope with COVID-19 to “a death by a thousand cuts.”

“Unfortunately, there’s only so much that small businesses like mine can absorb, and so we have to start passing some of those costs down to the consumers,” he says.

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On a litre of wine, the excise duty rate is increasing to $0.731 from $0.688, or a little over four cents, according to figures provided by the Canada Revenue Agency. For a 750 ml bottle of wine, the increase would be closer to three cents.

Plante says he feels sorry for consumers. “The way inflation is right now, consumers are the ones getting the hits the hardest,” he says. Calling beer “one of the few pleasures in life,” and adds: “When you start pricing that out of people’s wallets, what do they have left?”

He adds that he feels worse for distilleries, who face a tougher tax regimen than do breweries and wineries.

“I would never get into that business,” he says.

The Ontario Spirits Tax is 61.5 per cent on the cost of the goods. Given that, Adam Brierley, founder of Ogham Craft Spirits in Kanata, says that if he tries to recoup the extra 25 cents of excise duty per bottle imposed this year, he’ll be taxed provincially for that effort and need to raise his prices again to break even.

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“On the surface, we’re talking about 25 cents a bottle, but there are ripple effects,” Brierley says. “It’s just another thing that continues to kick the industry while it’s down.”

The increased excise duty hits distillers even as the costs of bottles, labels, grains, botanicals and more are getting more expensive, driving down profit margins, says Brierley, who launched Ogham in late 2021.

He figures that he will maintain the prices of some of his products until the current batch is sold, and then re-assess. The price of upcoming products will increase, he says, giving the example of Ogham’s maple eau de vie, currently priced at $60 but likely to rise by $5 or more due to the excise hike and the increased cost of maple syrup.

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John Criswick, co-founder of Perth-based Top Shelf Distillers, says he intends to hold the line and not raise the price of Top Shelf’s products “for now.”

Still, he faults the increased excise duty for helping to increase liquor prices and, with them, inflation.

Brierley contends that while excise duty increases are pegged to inflation, he would have liked to have seen the federal government freeze the increase at two per cent, as in recent years.

Greg Lipin, a co-founder of North of 7 Distillery on St. Laurent Boulevard, says Canadian craft distillers as a whole want relief from the federal excise regimen, which applies equally to mega-distilleries and to comparatively much smaller operations such as theirs.

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In the U.S., there’s one rate for craft distillers and another for bigger players, “which is what we’re looking for,” Lipin says.

During its decade of being in business, North of 7 has not changed its prices, preferring to absorb tax hikes, Lipin says.

“I haven’t entertained raising the prices of my products. But I will at some point, with these increases,” he says.

Rod Castro, the owner of 10Fourteen and Pubblico Eatery, two Wellington Street West restaurants, said the spike in the excise duty should not be surprising, as it follows on recent reports on the negative impact of alcohol and revised recommendations for alcohol consumption.

Still, he says: “As is usual, the government fails to really show they have a care or have a pulse for small- and medium-sized businesses and burden us as they do the consumer.”

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Twitter source code leaked online: legal filing




Some parts of Twitter’s source code — the fundamental computer code on which the social network runs — were leaked online, the social media company said in a legal filing on Sunday.

According to the legal document, filed with the U.S. District Court of the Northern District of California, Twitter had asked GitHub, an internet hosting service for software development, to take down the code where it was posted. The platform complied and said the content had been disabled, according to the filing. Twitter also asked the court to identify the alleged infringer or infringers who posted Twitter’s source code on systems operated by GitHub without Twitter’s authorization.

Twitter noted in the filing that the postings infringe copyrights held by Twitter.


The leak creates more challenges for billionaire Elon Musk, who bought Twitter last October for US$44 billion and has had massive layoffs since then.

The news was first reported by the New York Times.


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Thousands without power after Ontario windstorm



More than 10,000 customers remain without power in Ontario today after strong winds hit the southern and eastern parts of the province on Saturday.

Hydro One spokeswoman Bianca Teixeira says more than 11,500 customers are without power as of 9:30 a.m.

She says there are more than 300 active outages and utility crews are working to restore power to customers.

The outages stretch from just outside Ottawa to Pembroke, Parry Sound and Kingston and are scattered across the Greater Toronto and Hamilton Area to parts of Niagara and westward to just outside Windsor.


Environment Canada issued wind warnings on Saturday for areas including Kingston, Prince Edward County, Niagara Region, Hamilton, London, Middlesex, Chatham-Kent and Windsor.

The agency said affected areas would experience strong southwesterly winds gusting up to 90 or 100 km/h beginning Saturday evening.

This report by The Canadian Press was first published March 26, 2023.


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