Deeper Canada-Russia trade and investment ties promise win-win benefits for workers in both countries, Minister says
June 6, 2012 - The Honourable Ed Fast, Minister of International Trade and Minister for the Asia-Pacific Gateway, today marked Canada’s 70 years of diplomatic relations with Russia while leading a trade mission of nearly 30 companies there.
“As we celebrate 70 years of diplomatic relations, and, in 2015, 100 years of trade relations, we look forward to deepening and broadening our trade and investment ties for many years to come,” said Minister Fast. “Russia is a priority for Canada as we look to open new markets in fast-growing regions to create jobs and long-term prosperity for hard-working Canadians.”
Trade between Canada and Russia has intensified over the last decade, reflecting Russia’s emergence as a major global economy. Bilateral merchandise trade expanded to nearly $2.8 billion in 2011 from about $620 million in 2002.
“Given the vast potential of this market, I am committed to growing Canada’s commercial presence here in Russia,” said Minister Fast. “That is why I am leading a strategically focused, sector-specific trade mission as we seek to create new opportunities around the world for Canadian workers and businesses.”
A key forum for Canada-Russia commercial and economic cooperation is the Canada-Russia Intergovernmental Economic Commission (IEC), which Minister Fast co-chairs. Since last year’s IEC meeting in Ottawa, the two countries have launched several projects in agriculture, started negotiations toward a bilateral space cooperation treaty and explored opportunities under a science and technology cooperation statement. The next IEC session is to be held in Moscow in 2013.
Canada expects that Russia’s modernization agenda and its upcoming membership in the World Trade Organization will serve to further strengthen the bilateral trading relationship with Russia.
In his bilateral meetings today, Minister Fast highlighted the importance that an upgraded and modernized foreign investment promotion and protection agreement (FIPA) would play in further deepening the bilateral investment relationship between Canada and Russia.
“Upgrading and strengthening our FIPA with Russia would create a transparent, predictable and stable investment climate that would inspire greater investor confidence and ultimately lead to more prosperity-generating Canadian investment.”
For more information on Minister Fast’s trade mission to Russia, consult Minister Fast Visits Russia.
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A backgrounder follows.
For further information, media representatives may contact:
Rudy Husny
Press Secretary
Office of the Honourable Ed Fast
Minister of International Trade and Minister for the Asia-Pacific Gateway
613-992-7332
Trade Media Relations Office
Foreign Affairs and International Trade Canada
613-996-2000
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Over the last few years, Canada and Russia have strengthened their partnership and collaboration through a number of initiatives. For example:
- Export Development Canada (EDC) recently concluded a trade-finance partnership with Sberbank, Russia’s largest commercial bank. Under the agreement, EDC will provide US$275 million in financing to Sberbank to support the purchase of Canadian supplies and services. This transaction is EDC’s largest in Russia to date.
- Canada and Russia are working to identify projects of mutual interest for their business and research communities. For instance, there are plans for a Canadian science and technology trade mission to Russia later this year. A joint statement on cooperation in science, technology and innovation was signed in June 2011.
- The Toronto-based International Center for Innovative Technology Transfer (ICFITT), a business enterprise focused on advancing collaboration between Canada and Russia in technology development and transfer, signed an MOU with the Russian Ministry of Economic Development in November 2011. The ICFITT has identified projects in its portfolio where it sees potential for collaboration with Russian partners, notably in composite materials and energy efficiency. Some opportunities being explored for Canada include bioactive coatings for medical implants and composite materials for railway lines. Opportunities for Russia include oil-cracking technology and railway locomotive safety systems.
- Canada and Russia enjoy a long-standing relationship in the space industry—one that spans a number of decades. Canadian firms in the space sector continue to acknowledge Russia as an important business and trade partner. The recent creation of the Canada-Russia Working Group on Space Cooperation under the aegis of the IEC, the ongoing negotiations toward a space-cooperation treaty, and the mission planned for December 2012 that would see Canadian astronaut Chris Hadfield launch from Russia’s space centre at Baikonur, Kazakhstan, and become the first Canadian commander of the International Space Station, are all significant developments that hint at the potential for further cooperation in this sector.
- The cooperation between Canadian and Russian business partners is facilitated by organizations such as the Canada-Russia Business Council, which is co-chaired by the Canada Eurasia Russia Business Association (CERBA) and the Russian Union of Industrialists and Entrepreneurs. CERBA has chapters across Canada and in Moscow, and supports government efforts to increase trade and investment between Canada and Russia by facilitating business development and networking opportunities.
- In 2011, Canada hosted nearly 2,000 Russian students for six months or more, 14.2 percent more than in 2010 and 20 percent more than in 2008. This generated $60.3 million worth of economic activity in Canada. There are 54 active agreements between Canadian and Russian institutions facilitating the exchange of students, faculty, staff and curricula, as well as joint-research and joint-degree programs.
Canada and Russia share many similarities—including climate, geography and abundant natural resources—which means there are significant opportunities for Canadian and Russian companies in various sectors. For example:
- Canada has been a strong supporter of Russia’s upcoming accession to the WTO. With its fast-growing economy, Russia offers great potential. Its membership in the WTO will mean greater investment opportunities for Canadian businesses in Russia in many sectors.
- Canada is one of the leading exporters of pork to Russia and is actively promoting trade and cooperation in livestock, genetics and animal husbandry. Trade in food and agri-food products are also an important aspect of the Canada-Russia relationship, and Canadian producers are working hard to promote and brand Canadian products. “Canada Food Month” will take place in Moscow in July.
- There is a long-standing relationship between Canada and Russia in the mining sector. The Canadian company Kinross Gold, for instance, is the largest foreign investor in the Russian gold mining sector, and the company’s comprehensive corporate social responsibility policy directly benefits the local population. Both Canada and Russia have large and diverse energy resources and a shared interest in developing these resources in a sustainable manner. Priority areas are energy efficiency in the oil and gas sector, heavy-oil technology, and harsh-environment offshore oil and gas technologies.
- Significant interest exists in the aerospace sector, with active involvement by Canadian companies such as Bombardier, MDA and Neptec. This reflects the market potential in Russia for commercial aircraft sales, parts and services for the development of new aircraft frames and systems, and maintenance repair and overhaul of existing fleets. Opportunities also exist for Canadian firms to serve as innovation partners in collaborative research and development projects.
- There are broad cooperation opportunities in the areas of construction and infrastructure for Canadian companies in Russia, with particular interest in Canadian products and expertise in the areas of low-rise wood-frame housing, building materials and equipment, planning and land development. Several opportunities also exist in energy-efficient housing in harsh northern climates, as well as in the major infrastructure projects announced by the Russian government, particularly in Moscow and in the Russian Far East.
