The Canadian government’s agreement to allow Russian-owned turbines to be repaired covers a period of up to two years from now and would allow up to six units to be imported and re-exported – a much more extensive arrangement than previously disclosed. Two government officials told The Globe and Mail on Tuesday that Global Affairs Canada has granted German industrial giant Siemens Energy an exemption under Canada’s Russia sanctions for two years. This allows the company to ship turbines from Nord Stream 1, a pipeline majority-owned by Russia’s state-owned Gazprom, to Siemens Canada’s Montreal facility for routine repair and maintenance. One of the officials stressed that the agreement with Siemens allows the Canadian government to revoke the sanctions relief licenses at any time. The Globe did not identify the officials, who were not authorized to discuss the matter publicly. Russia last month cited the delayed return of turbine equipment, which Siemens Energy was servicing in Canada, as the reason it decided to reduce the flow of natural gas through Nord Stream 1. The pipeline, which runs from Russia to Germany, was operating at 40 percent capacity. Separately on Tuesday, the Ukrainian World Congress, a Ukrainian community advocacy group headquartered in Toronto, filed a legal challenge to the government’s decision in Federal Court. The application for judicial review of the sanction bypassing license asks the court to suspend and ultimately revoke it. The permission is “unreasonable, unjustified and contrary to the stated purpose of Canada’s sanctions regime,” the legal filing said. Ukraine’s ambassador to Canada, Yulia Kovalev, expressed her dismay at the two-year deal. “Gas and oil revenues directly support the Russian military. To waver even for two years and show Gazprom that it can get what it wants is a dangerous precedent,” she said in an interview on Tuesday. “They seal the status quo in the weaponization of energy.” Prime Minister Justin Trudeau’s government and Germany had initially said only one turbine was in the works. On Sunday, Keean Nembhard, press secretary to Natural Resources Minister Jonathan Wilkinson, revealed six were involved. One of the turbines, blocked in Montreal due to sanctions on Gazprom, is being shipped back to Europe, while the other five will be sent to Siemens Canada over the next two years for routine maintenance, the sources said. Siemens Canada will ship the turbine equipment to Germany, whose government will deliver it to Russia. The indirect return route could allow Canada to declare that it has not waived its sanctions. Siemens Energy spokeswoman Ann Adair said the company had no comment on the two-year deal. Adrien Blanchard, press secretary to Foreign Minister Mélanie Joly, would not confirm or deny the two-year time frame, but said “these turbines are following a regular maintenance program that had been interrupted due to sanctions.” “The maintenance program is now restarting for a limited time. However, the minister can revoke the permission at any time,” Mr Blanchard said in a statement. The Ukrainian government said Russia’s demand for the return of turbine equipment to resume larger gas deliveries to Europe amounted to blackmail and unconventional warfare. The return of the equipment, President Volodymyr Zelensky said on Monday, was an “absolutely unacceptable exception to the sanctions regime against Russia”. Mr Zelensky said the move could undermine Western efforts to isolate Moscow and open the door for other Western allies to ease sanctions against the Kremlin for economic gain. The Ukrainian Canadian Congress (UCC), an advocacy group for Canadians of Ukrainian descent, said the deal runs counter to the idea that Europe is trying to reduce its dependence on Russian gas. UCC national president Alexandra Chyczij said it suggested Moscow would be able to reap years of profit from gas sales in Europe, money that helps fund its war machine in Ukraine. “This is a deadly and far-reaching precedent. We call on Prime Minister Trudeau to immediately rescind this permit and stop Russia’s genocide of the Ukrainian people,” Ms. Chyczij said. “The special permit issued by the Canadian government to exempt the Gazprom and Nord Stream 1 turbines from Canadian sanctions is far more extensive than necessary to allow Germany to replenish its energy reserves for the winter. This license effectively facilitates the continued operation of Nord Stream 1 for a period of two years and is not in line with Germany’s stated intention to wean itself off Russian energy supplies.” Clifford Sosnow, co-chairman of the international trade and investment group at law firm Fasken, said the deal is a tactical victory for Russian President Vladimir Putin. But, he said, he denied Mr. Putin a strategic victory because Canada’s decision to repair and return the turbines — as requested by Germany — averted a rift between the NATO allies. He said the Biden administration’s extraordinary decision to publicly support Canada’s decision underscored how important it was to maintain NATO solidarity. Conservative foreign affairs critic Michael Chong called the long-standing sanctions permit to import and re-export the turbines “a significant circumvention of the global sanctions package designed to punish and isolate the Putin regime and a decision that undermines Canada’s standing in the world.” . He said Canada’s lack of effort to deliver liquefied natural gas to Europe is part of what has left Europeans scrambling for energy. “The Liberal government should never have put Canada in a situation where exporting these turbines was an option in the first place. The fact is that Liberal anti-energy policies have canceled and discouraged projects that would have allowed Canada to export liquefied natural gas to our European allies, including Germany,” said Mr. Chong. He added that the most important thing the Liberal government could do now is to speed up the construction of new energy infrastructure that would allow Canadian liquefied natural gas to be exported to Europe. Mr Trudeau came under intense pressure from German Chancellor Olaf Scholz, who raised the issue with him at the G7 summit in late June. Mr Scholz is planning a trade visit to Canada on August 22 and 23 to push for the construction of LNG export facilities on the East Coast. With reports from Reuters and the Associated Press
