The Russian and Canadian Economic Power Pact Re-engaged
Russia plans to fully restore its economic cooperation with Canada during the next 1-2 years, according to recent statements by Russian President Vladimir Putin, which were made by him during the recently concluded St. Petersburg Economical Forum.
The restoration of cooperation is expected to be in the form of the implementation of joint investment projects between the two countries, while the biggest hopes are put on resuming cooperation in the field of oil and gas, mining, as well as Arctic projects.
During the meeting with representatives of large Canadian businesses at the Forum, (which included heads of more than 50 leading Canadian companies) Putin asked for their assistance in the normalization of economic and political relations between the two countries.
From its side, Russia believes that the relations between Canada and Russia got a chance of recovery after Justin Trudeau came to power, who has repeatedly announced his intention to start official dialogue with Moscow.
One of the most possible ways of resuming cooperation between the two countries may be related with Arctics. As part of plans Russia is activizating talks with Canada, regarding with the future status of Lomonosov Ridge – an underwater ridge of continental crust in the Arctic Ocean, which spans 1,800 km from the New Siberian Islands over the central part of the ocean to Ellesmere Island of the Canadian Arctic Archipelago and which, in addition to Russia, could be also considered as a target for Denmark and some other countries of Northern Europe.
In addition to oil and gas production, the parties are working on the improvement of transport connections in the Arctic regions. Part of these plans is the launch of cross-polar air routes between Russia’s Krasnoyarsk and Winnipeg, as well as maritime route, which is known as “Arctic bridge” and which should link Russia’s Murmansk and the Canadian Churchill.
Get our daily investorintel update
The Russian government also has plans to ease conditions of doing business in the country for both Canadian and the US business and to tighten a fight with corruption as well as traditional Russian bureaucracy.
In addition, during the Forum the sides conducted a series of talks, regarding the establishment of Russia-Canada joint investment fund, which is an investment funds, that will focus on the funding of joint projects between Russia and Canada in different sectors of economy of both countries.
At present the volume of mutual trade between Russia and Canada is varied in the range of US$2.3-2.5 billion and there is a possibility that it may significantly increase during the next several years, as the countries have big potential for the further development of mutual trade. Canada currently ranks only the 66th in terms of exports and only the 32th in terms of imports among the Russian trade partners.
At present the volume of accumulated direct Canadian investments in the Russian economy is estimated at about US$1.5 billion, while the value of assets, acquired by Russian companies in Canada, according to experts’ estimates, is about US$7 billion.
Eugene Gerden is an international free-lance writer, based in St. Petersburg, who specializes on writing in the field of mining, metals and rare earth metals. ... <Read more about Eugene Gerden>