Canada wants to increase its support to the country. If we want to make a difference in the survival and recovery of Ukraine, bolder government and business efforts are needed.
The Canada-Ukraine Chamber of Commerce and the Business Council of Canada convened the "Rebuild Ukraine" conference in Toronto to get more support for the country. Canadian and Ukrainian officials and business people attended the day of speakers, led by the deputy prime minister.
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October's federal government announcement of a so-called "Ukraine Sovereignty Bond" was at the forefront of the meeting. Individual Canadians can take out a loan from the International Monetary Fund to the tune of up to $500 million.
The Government of Canada has provided $2 billion in direct financial assistance to Ukraine so far in 2022, all of which has been disbursed. Canada has provided more than $2 billion in military, humanitarian and other assistance to Ukraine this year. Around 63 per cent of Canada's official development assistance will be given to Ukraine in the years to come, according to the federal government.
A lot for Canada is not enough to cover the cost of reconstruction in Ukraine. The World Bank, European Union, and Ukrainian government put the rebuilding cost at US$ 347 billion.
By the end of 2022, this will be three times the size of Ukraine's annual GDP. According to the KSE, Russia added another US$31.5 billion to the bill. Around US$ 4.5 billion of civilian infrastructure is destroyed each week, according to the KSE. The Ukrainian government is running a deficit of around US$3–5 billion each month with tax revenues down due to a predicted 33 per cent contraction in economic output. Canada's real GDP went down by over 5 per cent during the Pandemic shutdowns in 2020.
The current assistance from the West is saddlingUkraine with debt.
The president of the Canada-Ukraine Chamber of Commerce called for aMarshall Plan to rebuildUkraine. In terms of today's dollars, the original U.S. Marshall Plan to rehabilitate 17 European nations in the wake of the Second World War gave only US $13.3 billion.
Most of the Marshall Plan was provided with grants or forgivable loans. The servicing of these loans should be contingent on the economic recovery of the country.
It will take at least three or four Marshall Plans to rebuild Ukranian. Western governments are unlikely to foot the bill because they haven't committed to filling the US$50 billion fiscal deficit that European academics expect Ukrainians to face in three years.
The resources provided by the West have been dispatched in a slow and unpredictable fashion. The risk of ruinous inflation, a further erosion in the value of the hryvnia, and a rollback of the country's still-incomplete pre-independence status is what we risk leaving Ukraine's government stuck with.
Canada needs to do a better job of engaging private capital to keep Ukraine afloat. Several speakers at the "Rebuild Ukraine" conference observed that American and European businesses are positioning themselves to participate in Ukraine's war economy, its post- conflict reconstruction and its eventual admission into the European Union.
Since 2016 the Canada-Ukraine Free-Trade Agreement has been in effect. All Ukrainian goods were free of tariffs for a year in June 2022. At "Rebuild Ukraine", Canadian Ambassador to Ukraine, Larisa Galadza, said that CUFTA is being "modernized" to include services. This isn't sufficient.
The Secretary of Ukrainian President Zelensky's National Investment Council was clear about the need for more private trade and direct investment.
Ukraine is listed as open on a restricted basis by the Export Development Canada. At the same time that Freeland is calling on Ukrainian allies to be as steadfast as the country's frontline fighters, the Canadian government's self-styled "international risk experts" are still hedging their bets. The restrictions need to be removed so that the full suite of loans, insurance and guarantees can be used by Canadian businesses.
Further engagement with its subsidiary should be done by the edc. The focus of the company would be widened to include Africa and Latin America. The mandate of the organization has expanded from helping the poor to helping the rich. This is the last time there will be further mission creeps.
They are charged with an impossible task: be bold, but don't lose money while they are at it. Canadians have to accept that some loans or guarantees are going to go bad if they take risks in the fight for democracy and the international order. The private flows of Canadian investment and trade are larger than these losses.
We need to keep pushing ourselves to be bolder.
A fellow with the Public Policy Forum, the Munk School, and a college. He uses the handle atBrettEHouse.
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