Kyiv motorists stop their cars and observe a one-minute silence daily at 9 a.m. to honor soldiers killed in the Russia-Ukraine war, on May 9.Diego Fedele/Getty Images
A Senate bill headed for the House of Commons proposes to give the federal government explicit power to confiscate the assets of foreign states that are held in Canada, a measure that could help repurpose Russian funds for Ukraine’s reconstruction.
Analysts say, however, that Prime Minister Mark Carney, with his majority in the Commons, will have to weigh the risks that Bill S-214 could invite retaliation or scare off foreign state investors and sovereign wealth funds.
Bill S-214, which cleared the Senate foreign affairs committee last week, would allow Ottawa to override the immunity normally granted to foreign states under Canadian law, enabling the government, for example, to target Kremlin assets in the name of righting international wrongs.
The Liberal government said it supports the principle of the Senate bill but has not yet committed to backing it.
The bill, sponsored by Senator Donna Dasko, proposes a mechanism to take custody of the sovereign assets of a foreign state in exceptional circumstances: where a state has committed a grave breach of international law, such as Russia’s all-out assault on Ukraine that began in 2022.
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Four years ago, the Trudeau government passed legislation to give Canada the power to confiscate assets of foreigners and foreign entities frozen under sanctions law. Ottawa has used this to go after the holdings of a company it says is owned by Russian billionaire Roman Abramovich with the intent of passing the funds to Ukraine.
But Canada’s State Immunity Act shields the Russian government itself from being pursued in the same way through this country’s courts. So the new bill would create a pathway for the federal cabinet, through an order-in-council, to confiscate foreign state assets.
“This bill gives Canada a powerful tool to support Ukraine and other victims of international aggression by ensuring those responsible pay a real price. Canada would be able to repurpose frozen assets, helping victims pay for recovery and reconstruction,” Ms. Dasko said in a statement.
She noted that as of last December, the World Bank’s estimate for the cost of rebuilding Ukraine over the next decade was US$588-billion.
Bills that originate in the Senate must be sent to the Commons for approval before they can become law. After S-214 receives third reading in the Senate, it then heads to the House, where the Carney Liberals hold a slim majority and can pass – or kill it.
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Legislation sponsored by senators rarely becomes law. However, a recent example where it did is Bill S-211 that came into force in 2024 and requires companies and federal government institutions to publicly report each year on the steps they have taken to prevent and reduce the risk of forced labour or child labour in their supply chains.
The Globe and Mail asked the government whether it would back S-214. Foreign Affairs Minister Anita Anand’s office said the minister endorses the bill’s aims and welcomes debate on it.
“Minister Anand supports the intent of Bill S‑214. The bill is still in process. The minister looks forward to constructive discussions in Parliament once the Senate has completed its initial review,” Myah Tomasi, her press secretary, said in a statement.
Preston Lim, an assistant professor of law at Pennsylvania’s Villanova University Charles Widger School of Law, appeared recently before the Senate foreign affairs committee to offer comment on the bill.
He said he considers S-214’s intentions to be noble but said confiscating foreign sovereign assets arguably contravenes internationally accepted rules and norms around state sovereignty.
The most direct risk for Canada would be Russian retaliation against Canadian assets, “especially assets held in Russia by Canadian individuals and businesses,” Prof. Lim said.
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Robert Brookfield, director-general of sanctions and strategic export controls at the department of Global Affairs, echoed this when he told the Senate committee on May 6 that “the risk of retaliation is quite significant.”
Further, Prof. Lim said, there is a chance that authoritarian states such as the People’s Republic of China might avoid investing government-owned assets in Canada if Ottawa gave itself the power to confiscate them.
“Given the Carney government’s push to diversify Canada’s economic relations, the statutory enactment of this bill could well cut against or contradict elements of the Prime Minister’s foreign-policy vision,” Prof. Lim said.
Fen Hampson, a professor of international affairs at Carleton University, and a proponent of S-214, says he believes the legislation is a countermeasure compatible with generally accepted international law that governs when a state has committed an internationally wrongful act and the consequences that follow. These states cannot invoke their sovereignty as a shield against countermeasures by injured or third states, Prof. Hampson said.
“Beyond the legal argument, however, lies a compelling public-interest argument,” he said. “The issue is whether Canadian taxpayers should continue to bear the costs of Russia’s war or whether Russia’s own assets should fund Ukraine’s efforts and recovery.”
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Canada has provided Ukraine with more than $25-billion in assistance since 2022.
The RCMP says more than $185-million of assets in Canada since 2022 have been frozen through sanctions targeting Russia. The force has not said what portion of these are Russian state assets.
According to Ms. Dasko, the bulk of frozen Russian state assets sit in Europe with Belgian securities depository Euroclear. Recent estimates say it holds more than €200-billion of Russian assets under sanction, most of which are Central Bank of Russia reserves. Euroclear reported in March that about 7 per cent of the holdings under sanction are Canadian-denominated assets: above $20-billion.
If those Canadian-denominated holdings are held with Canadian financial institutions, they are subject to Canadian law, Prof. Hampson said.
Ms. Dasko said S-214 would give Ottawa “another tool in the toolbox” and it would be up to the government when and if to use it.