The importance of cooperation in the Arctic between Russia and Canada is poised to increase. Both countries emphasize the interest of further expanding ties in this area on bilateral basis as well as within international fora such as the Arctic Council. In 1992 the Russian-Canadian Agreement on cooperation in the Arctic and the North, in 1997 interdepartmental Memorandum of understanding concerning cooperation on Aboriginal and Northern development were signed. The cooperation in the North has become the major subject of the Governor General of Canada visit to Russia in 2003. Bilateral contacts under the program of cooperation of Siberian Federal District and the Department of Indian Affairs and Northern Development of Canada develop actively. In March 2004 a visit to Canada of the Committee on the Northern Territories and Indigenous Minorities of the Federation Council took place.
Regional ties are actively developing. Substantial interest to such cooperation is demonstrated by Ontario, Quebec, Manitoba, Alberta and Northwest Territories in Canada, and Moscow, St.Petersburg, Republic of Tatarstan, Republic of Bashkortostan, Republic of Sakha (Yakutia), Yamalo-Nenets and Khanti-Mansiisk Autonomous regions, Samara, Perm and Tyumen regions in Russia.
Russia-Canada Intergovernmental Economic Commission Arctic and North Working Group (ANWG): Political forum to discuss mutual cooperation and opportunities and assist in resolving problems in particular sectors.
The Northern Dimension of Canada's Foreign Policy (NDFP): Developing and expanding opportunities to work with Russia in addressing its northern challenges through strengthened bilateral activities.
The Arctic Council is a high-level intergovernmental forum that provides a mechanism to address the common concerns and challenges faced by the Arctic governments and the people of the Arctic. The Member States of the Arctic Council are Canada, Denmark, Finland, Iceland, Norway, the Russian Federation, Sweden and the United States of America. Russia serves as Chair of the Council for 2004-2006.
Sharing best practices in governance and northern development with the Siberia Federal District of the Russian Federation:Department of Indian and Northern Affairs of Canada is leading this important initiative under the Canada-Russia Agreement on Cooperation in the Arctic and North.
Efforts to share best practices in northern development and governance are directed to the Siberian Federal District, one of seven new administrative districts created during the recent restructuring of the Russian government.
This initiative brings together a consortium of Canadian and Russian partners to develop new initiatives and integrate ongoing projects by government and non-governmental organizations, including academic institutions, to ensure that best practices reflect the diverse experiences of different levels of government, organizations and institutions.
Agreements and legal basis. Russian-Canadian economic relations are based on the Agreement on trade and commercial relations (signed in 1992), Agreement on stimulation and mutual protection of capital investments (signed in 1989 and entered into force in 1991), Agreement on economic cooperation (1993) and Agreement on evading mutual taxation (1995). During the visit of the President of the Russian Federation Vladimir Putin to Canada in 2000 two intergovernmental agreements were signed: Air services Agreement and Agreement on cooperation between Russian regions and Canadian provinces and territories.
In February 2002, during the visit of Team Canada headed by Prime minister of Canada Jean Chrétien to Russia, the Russian-Canadian Joint Action Plan was adopted. This Plan defines main areas of bilateral cooperation, including those in the sphere of economics.
Intergovernmental Economic Commission. Founded in October 1995, Co-chairs - A.Gordeev, Minister of Agriculture of the Russian Federation and J.Peterson, Minister of International Trade of Canada. The Commission comprises one sub-commission on agriculture and several working groups - on housing and construction, fuel and energy, mining industry, cooperation in the Arctic and in the North. Work is proceeding on the establishment of working group covering market access, transportation and advanced technologies.
Bilateral trade. According to the Statistics Canada, in 2004 the turnover of trade between Russia and Canada reached 1,4 billion US dollars (an increase of 69,6% in comparison with 2003). Russian exports amounted to 1,08 billion US dollars (an increase of 84,8%), imports – to 317,7 million US dollars (an increase of 32,7%). The surplus in Russia’s trade with Canada reached 762,0 million US dollars (for reference: the bilateral trade turnover in 2003 was 823,9 million US dollars; exports – 584,4 million US dollars, imports – 239,5 million US dollars. The surplus was 344,9 million US dollars in Russia’s favor).
63,7% of the amount of our exports to Canada consisted of minerals (crude oil). The ferrous metals and products thereof made up 14,2%, chemicals and products thereof – 7,3%, food and agricultural products - 7,1%, precious stones and metals – 2,3%, textiles – 1,6%, timber - 1,2% of the export’s cost.
In imports, the leading positions were held by machinery and transport equipment (60,9%), foodstuffs (16,5%), chemicals, products thereof and medecines (8,5%).
Russia’s share in Canadian imports was 0,4 %, in exports - 0,1%.
Investment cooperation. According to the Canadian estimates, total Canadian accumulated investments in Russia amount to 1,2 billion US$. More than a half of all Canadian investments in the Russian economy fall on the mining industry. Considerable sums are invested in the food processing and construction industries.
The promotion of Russia’s credit and investment ratings by leading world agencies creates favorable conditions for the increase of Canadian investments in the Russian economy.
In 2003–2004 the biggest Canadian gold-mining company «Barrick Gold Corp.» invested of almost 200 million US$ in the gold-mining industry of Russia.
In October 2004 one of Canada’s leading oil and gas companies Petro-Canada and the Russian firm Gazprom, world’s largest producer and exporter of natural gas, signed a Memorandum of Understanding (MOU) in Moscow to investigate the possibilities for liquefied natural gas (LNG) shipments from Russia to North American market by 2009.
Such noticeable Canadian firms as «Nortel Networks», «Kinross Gold», «Bema Gold», «High River Gold», «SNC-Lavalin», «Bombardier», «Pratt&Whitney Canada», «McCain Foods», «Molson Coors Brewing» and some others also have serious investment plans and projects in Russia.
Cooperation in the agro-industrial complex. During the visit to Russia of the Minister of Agriculture and Agri-Food Canada L.Vanclief in September 2003 the parties reached an agreement to broaden cooperation in respect to the Russia’s accession to WTO with an emphasis on the issues of agriculture and training of specialists for the Russian agro-industrial complex. A.Gordeev, Minister of Agriculture of the Russian Federation, returned the visit to Canada on May 5-9, 2003.
In its annual report on market priorities in 2003 the Department of Foreign Affairs and International Trade of Canada considers cooperation in the sphere of agriculture as a priority.
Technical assistance. The Canadian program of technical assistance to Russia, which has been implemented by the Canadian International Development Agency (CIDA), plays an important role in strengthening our bilateral ties.
In 2002, CIDA worked out a new strategy, which identifies the following perspective areas of assistance: reforming the civil service and the health-care system; protecting the environment; building a civil society; developing federalism; cooperating in the North and integrating Russia into the world economy. The issues of Canada’s technical assistance to Russia were discussed in details during the visit of the Minister for International Cooperation S.Whelan to Moscow and St.-Petersburg in July 2002. The initiative to improve the Russian system of governmental management is the key one.
Export Development Canada has also been active in the Russian market. In December 2003 it signed a US $15 million line of credit with the Russian diamond producer ALROSA Company Ltd. to finance purchases of Canadian capital goods and services. In 2003-2004 EDC signed memorandums of understanding with Vneshtorgbank and Sberbank.
Business-dialogue. In the course of the visit of Team Canada to Russia in February 2002 more 77 commercial agreements, memorandums of understanding and protocols of intentions (with a value of nearly US$ 340 million) were signed. The dialogue was continued in February 2003 during the visit to Canada of the delegation of the Russian Chamber of Commerce and Industry headed by its vice-president G.Petrov.
During their meeting in Moscow on October 12, 2004, President Vladimir Putin and Prime Minister Paul Martin have agreed to establish a Canada-Russia Business Council – an organization dedicated to expanding contacts between business communities of our countries and promoting bilateral trade and investments. The forum is open to interested Russian and Canadian companies, business and non-governmental associations.
The inaugural meeting of the Canada-Russia Business Council took place on October 12, 2005 in Moscow with the participation of Mr. Gordeev, Minister of Agriculture of the Russian Federation, and Mr. Peterson, Minister of International Trade of Canada.
The business council will work on recommendations to the governments to improve the conditions of cooperation in information and communications sphere, energy, transportation and aerospace, mining and metals.
The cooperation at the regional level has also been developing. Solid ties have been established between Canadian partners and Russian regions, such as Moscow, Volgograd, Tver, Samara, Perm, Tumen, Magadan and Primorsky regions, Yakutia, Tatarstan, Chuvash Republic, Bashkortostan and Kamtchatka. Particular attention is being paid to the cooperation in the North and Arctic.
The problem of Russian products’ access to the Canadian market has eased over the last time. In July and August 2004 the Canadian International Trade Tribunal, having conducted an expiry review of its findings made in 1999, which resulted in the imposition of high antidumping duties on cold-rolled (29%) and hot-rolled (41,6%) steel originating in or exported from the Russian Federation, and decided to rescind the above-mentioned findings.