How Canadian Investment Can Help Rebuild Ukraine

Written By Kateryna Korneliuk

Attending the Rebuild Ukraine Business Conference in Toronto last week was an enriching experience. The conference aimed to foster collaboration, investment, and trade ties between Canadian and Ukrainian businesses by bringing together policymakers, industry experts, businesspeople and representatives of non-profit agencies.

Here are the key takeaways.

The Hon. Jason Kenney, Senior Advisor at Bennett Jones, participated in a Public Policy Forum roundtable on the reconstruction of Ukraine. He emphasized the need for a more targeted approach by federal agencies such as Export Development Canada, and the need for Canada to support Ukraine’s war efforts by expanding Canada’s defence budget to facilitate an expansion of production capacity. He also underscored the recent opening of an office in Kyiv by ATCO-Frontec, and the growing presence of Fairfax Financial in Ukraine.

The Ukrainian government has implemented a range of investment incentives to encourage foreign investment, including but not limited to income tax exemptions, assignment of an “investment nanny”, state support, and compensation for construction of the infrastructure required for the implementation of the project (roads, communication lines, heat, gas, water and electricity supply networks, utilities, etc.).

The modernized Canada-Ukraine Free Trade Agreement (CUFTA) was signed on September 22, 2023 and marks a new era in Canada and Ukraine’s economic relationship and will be fundamental to the participation of Canadian businesses in Ukraine’s economic reconstruction and recovery. Some of the highlights of the modernized CUFTA agreement include:

• Application of a new liberal method in the service sector—everything that is not forbidden is allowed.
• The protection of business interests has been strengthened through the use of a modern set of legal instruments for investment protection.
• Added section on digital trade between Ukraine and Canada.
• Expanded and simplified conditions for the temporary entry of Ukrainian business travelers to Canada for the purpose of providing services.

The World Bank and other organizations are suggesting reconstruction requirements upwards of approximately $400 billion over ten years, which would cover infrastructure, housing, energy, transportation, agriculture and other sectors. The reconstruction is already starting in fact as a lot of projects and investments are already in place in Ukraine. The European Bank for Reconstruction and Development (EBRD) has met its target of deploying €3 billion of financing in Ukraine’s real economy in 2022-23, and the plan for 2024 would be 4 billion. Export Development Canada also confirmed their commitment to the Ukrainian projects.

The conference also presented success stories of investing in Ukraine during last two years. In particular, I was impressed by Cameco’s story on supporting Ukraine and playing a role in securing its nuclear energy needs. This includes Cameco supplying Energoatom, Ukraine’s state-owned nuclear energy utility, with natural uranium hexafluoride (or UF₆) to meet the country’s full nuclear fuel needs through 2035. The final agreement was signed in April 2023.

The conference also presented potential projects for investments, in particular in the agriculture, construction/infrastructure, energy, and healthcare sectors.

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