Russian-Canadian Economic Cooperation
Economic cooperation is a strategic area of the Russian-Canadian bilateral interaction. It should be noted that we have witnessed remarkable advance here lately.
In 2010, the trade turnover between Canada and Russia equaled USD 2.8 bn, while the Russian export reached USD 1.6 bn and the import - USD 1.2 bn. Commodities, such as crude oil and oil products, account for the major part of the Russian export. The share of fertilizers, precious stones, jewels and steel has increased in the Russian export.
While Russian imports from Canada mainly consist of machinery, equipment and vehicles, meat products, seafood, specialized tools and livestock have also a role to play.
The intensification of Russian-Canadian contacts both on the top and high level helped give a boost to the bilateral trade and economic relations, as well as further strengthen their legal basis.
Promising areas of the Russian-Canadian economic cooperation are energy, mining, transport, communication technologies, aerospace industry. Numerous opportunities to boost cooperation exist in such new spheres like forestry, automotive and automotive parts industry, financial services and nanotechnologies.
The most impressive Russian-Canadian projects are relevant to the cooperation in uranium ore production, tracking transcontinental sea and air transit routes, establishing joint car and new rolling-stock manufacturing in Russia, introduction of the newest technologies to mining sector, high-productive livestock breeding, partnership in the housing sphere and its financing.
The bilateral cooperation in the conquest of outer space is going on very well. In 2009, Robert Brent Tirsk became the first ever Canadian astronaut to venture a flight on board the Soyuz spaceship as a member of the international expedition. On 20 May, 2011 the Canadian satellite Telstar-14R was launched from Baikonur launching site. It was for the seventh time when the Russian carrier Proton was used to launch the Canadian Telesat company's payload.
Agriculture remains a significant realm of Russian-Canadian interaction. One of the key events here was the visit to Russia by the Hon. Gerry Ritz, Minister of Agriculture and Agri-food of Canada, in October 2009. The talks with Mr. Viktor Zubkov, First Deputy Chairman of Government of the Russian Federation helped to focus on Canadian agricultural exports to Russia, veterinary control and certification. The cooperation between the food safety agencies of the two countries was also boosted which helped organize a number of meetings in 2010.
Russian-Canadian Business Summit in Vancouver on the margins of the Olympic Games in February, 2010 gave a significant boost to the cooperation between our countries in preparation for the Olympic Games in Sochi in 2014.
The captains of Russian and Canadian business also discussed the prospects of Canada-Russia energy cooperation, including possible delivery of the Russian liquefied natural gas to North America during Russian-Canadian energy forum in Montreal in September, 2010.
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 Chr?tien 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. During the July 2006 G8 summit in Saint-Petersburg, President of the Russian Federation Vladimir Putin and Prime Minister of Canada Steven Harper signed Joint Policy Statement on Canada- Russia Relations and Joint Statement on Canada-Russia Energy Cooperation. During the visit by the Chairman of Government of the Russian Federation to Canada on November 29, 2007, Joint Statement on Russian-Canadian Economic Cooperation was adopted, as well as inter-departmental documents on cooperation in the realm of agriculture, fisheries, indigenous people development, MOU on creating Working Groups in the sphere of food safety were signed. In June, 2009 the sides ratified a supplement for the bilateral nuclear energy cooperation agreement, enabling the sides to arrange mutually beneficial trade in uranium.
INTERGOVERNMENTAL ECONOMIC COMMISSION AND BUSINESS DIALOGUE
Russian-Canadian Intergovernmental Economic Commission (IEC) is a main tool created in October, 1995 to help the two governments fulfill their obligations in trade and economic cooperation, determine new opportunities and overcome problematic matters. 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. The body is currently co-chaired by Canadian Minister of International Trade and the Minister for the Asia-Pacific Gateway the Hon. Edward Fast and First Deputy Chairman of Government of the Russian Federation the Hon. Viktor Zubkov.
Being a major tool to boost Russian-Canadian economic interaction, Russian-Canadian Intergovernmental Economic Commission (IEC, established in 1993) meets on a regular basis. The IEC held its most recent meeting in June 2011 with two major documents signed, namely Joint Statement on the Results of the VII Session of the Canada-Russia Intergovernmental Economic Commission and Joint Ministerial Statement on Cooperation in the Area of Science, Technology and Innovation between the Department of Foreign Affairs and International Trade of Canada and the Ministry of Education and Science of Russia. The Russian Union of Aircraft Producers and Canadian Association of Aerospace Industry also signed a Memorandum of Understanding. Events within the Russian-Canadian Business Council (CRBC) and Russia-Canada Livestock Forum which ran parallel to the IEC meeting, included round tables on energy efficiency, science and innovations and investments with the participation of officials and business community members from both countries.
Russian-Canadian Business Council (CRBC) was established and became operational in October, 2005. This organization is dedicated to expanding contacts between business communities of four countries and promoting bilateral trade and investments. The forum is open to interested Russian and Canadian companies, business and non-governmental associations, working on recommendations to the governments to improve cooperation mechanisms in the spheres of information and communications, energy, transportation, aerospace and mining. The Council is co-chaired by Mr. Alexander Shokhin, President of the Russian Council of Industrialists and Entrepreneurs and the Chairman of Canadian-Eurasian Russian Business Association (CERBA). Within CRBC there are commissions on mining and metallurgy, energy, information and telecommunication technologies, transportation. The First Russian-Canadian Business Summit in March 2007 comprised the VI IEC Session and the II CRBC session, thus starting the tradition of conducting Joint sessions of the Commission, Council and working groups in the format of Business Summit. This tradition successfully continued in June, 2009 with the VII IEC Session in Moscow along with the annual meeting of the Canada-Russia Business Council (CRBC). A Memorandum of Understanding between the Russian Railways and Railway Association of Canada on personnel training were among the commercial agreements concluded.љ After the Summit the delegation led by Minister Stockwell Day visited Sochi where discussed the opportunities for the Canadian companies to participate in the infrastructure development projects works for the 2014 Winter Olympic Games. In the presence of Minister Day an agreement between SNC-Lavalin and Russian Railways to manage the construction and maintenance of transportation facilities for the 2014 Games, as well as the railway expansion of the Olympic coastline was signed. The Canadian company also opened its office in Sochi.
In 2010, the Canadian Export Development Corporation (EDC) provided $ 640 mln. worth financial guarantees for transactions between Canadian and Russian partners. In early 2010, the Russian VTB Bank and the EDC signed a credit agreement to finance more than $ 100 mln. worth of exports to Russia.љљ EDC and Scotia Bank offices continue to fruitfully operate in Moscow.
Such powerful Canadian corporations as Kinross Gold, High River Gold, Barrick Gold, Bombardier, Pratt&Whitney Canada, SNC-Lavalin and some others have already finalized serious investment projects in Russia. In January 2010, Kinross Gold announced about the agreement in principle to acquire the high-yield goldfields of Dvoynoye and Vodorazdelnoye.
New trends in bilateral investment process are Russian investments in Canadian economy, such as cooperation between Norilsky Nikel and LionOre or Rostselmash and Buhler Industries, Atomredmetzoloto and Uranium One. This collaboration will also allow Canadian companies to get more competitive internationally, to expand presence on the Russian market. For example, the agreement reached in June 2010 provides for an increase of Atomredmetzoloto share in the Uranium One authorized capital stock.
According to the Canadian estimates, total Canadian accumulated investments in Russia amount to $ 1.5 billion. More than a half of all Canadian investment in the Russian economy falls on the mining industry. Considerable sums are invested in the food processing and construction industries. The opening of three plants in Russia by Magna International in September, 2010 is the latest "success story" in this field.