Ukrainian ambassador to Canada Yuliya Kovaliv speaks at an event to mark Ukraine Independence Day in Ottawa on Aug. 24, 2023.PATRICK DOYLE/The Canadian Press
Ukraine’s top envoy in Ottawa said Kyiv is eager to receive the $5-billion that Canada has promised to lend the European country as part of a US$50-billion loan package agreed to by the Group of Seven countries earlier this year.
The plan uses the interest generated from €300-billion worth of frozen Russian assets, mostly held in Europe, to secure the US$50-billion bank loan. Russia’s all-out assault on Ukraine has so far continued for almost three years.
The money is being disbursed to Ukraine as concerns grow over whether U.S. president-elect Donald Trump, who succeeds Joe Biden on Jan. 20, will reduce American aid to Ukraine. Asked by NBC’s Meet The Press, in an interview that aired last Sunday, if Ukraine should prepare for a cut in U.S. assistance, Mr. Trump replied: “Possibly, sure.”
On Dec. 10, the Biden administration announced the disbursement of a US$20-billion loan as the American part of the package.
“These funds – paid for by the windfall proceeds earned from Russia’s own immobilized assets – will provide Ukraine a critical infusion of support as it defends its country against an unprovoked war of aggression,” U.S. Treasury Secretary Janet Yellen said Tuesday. The United States said its share would be transferred to a World Bank fund that Ukraine could access.
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Yuliya Kovaliv, Ukraine’s ambassador to Canada, said Thursday that Ottawa and Deputy Prime Minister Chrystia Freeland played an important role in putting this package together. She said Ukraine hopes to receive Canada’s contribution soon.
“It is an important step towards justice and accountability,” Ms. Kovaliv said of funding Ukraine’s budget from seized Russian assets. She also said that Ukraine eventually wants all of the immobilized assets handed over to fund reconstruction.
Canada and other countries making loans as part of this package will be repaid from the interest generated by the Russian assets.
The funds will be used for spending other than military aid, including health care, education and social services, as well as repairing Ukraine’s energy infrastructure, which has been badly damaged by Russian attacks.
Katherine Cuplinskas, deputy director of communications in the office of the Deputy Prime Minister and Minister of Finance, said Ottawa plans to make good on its commitment.
“Canada was the first G7 country to advocate for using Russian Central Bank assets to support Ukraine,” she said. “Canada is proud to be providing the largest per capita contribution. These funds will be delivered soon.”
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Earlier this month, Ukraine’s parliament approved the 2025 state budget, channelling more funds for Kyiv’s defence efforts.
Ukraine plans to spend 2.2-trillion hryvnyas ($53.7-billion), or about 26 per cent of its gross domestic product, on defence and security next year, officials said.
The latest available assessment by the World Bank, European Commission, United Nations and Ukrainian government found that direct war damage in Ukraine had reached US$152-billion as of December, 2023, with housing, transport, commerce and industry, energy and agriculture the worst-affected sectors.
The total cost of reconstruction and recovery was estimated by the World Bank and Ukrainian government at US$486-billion as of the end of December last year.
Ukraine’s economy shrank by about a third in 2022. Despite growth in 2023 and so far this year, it is still only 78 per cent of its size before the invasion, First Deputy Prime Minister Yulia Svyrydenko told Reuters.
Ukraine is one of the world’s main sources of grain, and the interruption of its exports early in the war worsened a global food crisis. Exports have since largely recovered, with Ukraine finding ways to circumvent a de facto Russian blockade.
Ukraine spends most state revenues funding defence, and relies on financial aid from Western partners to pay pensions, public-sector wages and other social spending. Each day’s fighting costs Kyiv about US$140-million, said Roksolana Pidlasa, the head of parliament’s budget committee.
With reports from Reuters