A plane-sized sanctions quagmire

From: POLITICO Ottawa Playbook - Wednesday Dec 06,2023 11:05 am
A daily look inside Canadian politics and power.
Dec 06, 2023 View in browser
 
Ottawa Playbook

By Kyle Duggan, Zi-Ann Lum and Nick Taylor-Vaisey

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In today's edition:

→ An update on that Russian plane stranded at Pearson Airport.

→ A Liberal MP says support for a ceasefire in Gaza is picking up.

MIKE MOFFATT weighs in on the Conservative leader's “Housing Hell” video.

DRIVING THE DAY

A Russian-registered Antonov AN-124 owned by Volga-Dneper sits on the tarmac at Pearson Airport in Toronto on Monday, March 21, 2022.

A Russian-registered Antonov AN-124 owned by Volga-Dneper sits on the tarmac at Pearson Airport in Toronto on Monday, March 21, 2022. | Frank Gunn/The Canadian Press

BRACE FOR TURBULENCE — One of Canada’s most recognizable Russian sanctions targets over the war in Ukraine is turning to the courts seeking to shake its sanctions.

Ottawa confiscated Volga-Dnepr’s massive cargo plane in June citing fears it could be leveraged by Russia in its war against Ukraine. The aircraft has been sitting on the tarmac at Toronto’s Pearson Airport since February 2022.

Canada sanctioned the airline’s corporate group and founder in April this year. Federal court documents reveal they are now challenging that move.

— State of play: Canada has tried to pressure VLADIMIR PUTIN’s regime with a massive sanctions campaign that has targeted thousands of companies, oligarchs, media and other individuals.

— What’s new: One by one, an increasingly lengthy list of businesses, uber-wealthy individuals and others are turning to the courts in an effort to get off the list — something Ottawa Playbook has been tracking. The group of Volga-Dnepr subsidiaries, including Atran, AirBridgeCargo Airlines, Volga-Dnepr Airlines, are among the latest.

— Familiar pattern: The recent delisting court cases Playbook has reviewed mostly follow the same trend. Canada sanctions a batch of people and entities under one boilerplate description for the group, then eventually some of them file complaints to the foreign affairs minister claiming they were listed in error and that GAC won’t provide evidence proving they should be sanctioned.

The minister legally has 90 days to respond to individuals appealing their sanctions, but the applicants usually wind up ghosted, so they turn to the courts, often many months later, to attempt to force their delisting.

— Worked for a few: Canada quietly delisted five people in recent weeks after they each individually took Joly to court. When Ottawa does delist individuals, Global Affairs releases few if any details.

— Mega mover: Volga-Dnepr is a major mover of superheavy and oversized cargo, and has been fighting Canada elsewhere in court for the release of its Antonov-124 cargo plane collecting rust and dust at Pearson.

“The An-124 has remained grounded in Canada at the Toronto Pearson International Airport since February 27, 2022, suffering from exposure to the elements and receiving no maintenance whatsoever,” the court documents said.

The U.K. government, which also sanctioned the airline, describes it as a “Russian transport company with significant air operations that is contracted by the Russian Government to create air bridges that carry critical goods.”

The airline’s filing says it “prides itself on its humanitarian efforts” worldwide, such as through flights to cities in southeastern Turkey affected by the earthquake on Feb. 6 this year that delivered “mobile hospitals, blankets, tents, essential goods” and “specialized search and rescue equipment.”

“Not only is the [airline] suffering substantial financial harm, but with the An-124 remaining grounded in Canada, it is unable to provide humanitarian assistance or partake in humanitarian missions,” the court documents said.

— Add to the list: On top of those three companies, the founder and former long-time head of Volga-Dnepr, ALEKSEY ISAYKIN (alternatively written as Alexey Isaikin), is also taking Joly to court.

The Daily Telegraph describes him as a “former Soviet military colonel and one-time ally of Vladimir Putin” with ties to him “stretching back nearly two decades.”

The aviation magnate is a Russian and Cypriot national living in Moscow.

In his filing against the Canadian government, he is described as a “successful economist and entrepreneur” who is strengthening the “prestige of the civil aviation industry,” and a “shareholder in various corporate entities that operate global air freight businesses.”

When Global Affairs Canada announced the sanctions, it said it believes the group is “complicit in Putin’s war of choice, including several security targets linked to the Wagner Group and the aviation sector.”

The Wagner Group is a Russian paramilitary mercenary force that has been fighting in Ukraine using brutal tactics.

Isaykin’s filing denies the allegations he is involved in the war and his court filing said he signed a solemn affirmation that states he has “not provided any aviation service to the Wagner Group or otherwise in relation to the military operations in Ukraine.”

His sanctions challenge is unlikely to be the last.

For your radar


SLOW BUILD — Liberal MP SALMA ZAHID says support for a ceasefire in Gaza is growing among her colleagues on the Hill.

The Scarborough Centre MP sent a letter to the prime minister on Tuesday, her second since Oct. 7, urging him to “take the lead” in calling for an end to fighting.

“We have rightly said that all parties have a legal and moral responsibility to protect innocent civilians,” the letter read. “How is that statement squared with over 15,000 civilian deaths.”

Zahid told Playbook she's had conversations with constituents, colleagues, Muslim staffers and family since the war between Israel-Hamas broke out. She says those discussions motivate her to publicly pressure her boss to call for a ceasefire in Gaza.

“Yes, I know like everyone doesn't have the same opinion,” she said. “But I have said right from the very beginning that we cannot justify the killing of innocent civilians.”

— Modern warfare risk: Another reason motivating her ask, she said, is the difficulty of explaining a “very horrifying” event to her sons, who are 23 and 25.

“I used to hear about it when I was young, but I never saw images of what my children are seeing right now at that age,” she said. “I'm really worried about the mental health and mental stress they are taking.”

ALSO FOR YOUR RADAR


HOUSING FACT-CHECK — Conservative Leader PIERRE POILIEVRE spent Monday and Tuesday promoting his 15-minute housing mini-doc on the floor of the House of Commons. Poilievre deployed dozens of charts and stats in support of his diagnosis of runaway home prices in Canada — analysis that leaned heavily on mainstream reporting.

Playbook asked economist and housing specialist MIKE MOFFATT, founding director of the PLACE Centre at the Smart Prosperity Institute, to take out a red pen to check Poilievre's work.

How credible was the leader's thinking on what ails housing?

Here's what Moffatt had to say:

— On the right track: Poilievre's housing documentary is an impressive piece of work that lays out the Conservative’s leader’s theory of what caused Canada’s housing crisis and how it can be solved. The first section of the video presents a compelling, data-filled summary of the crisis, and asks what I believe is the right question: “Why are homes in Niagara Falls, Ont., so much more expensive than in Niagara Falls, N.Y.?”

The middle section of the video provides two explanations.

— The good: Poilievre's first explanation claims high development charges, taxes and approval delays substantially lower the quantity and increase the price of housing — and is compelling.

— The bad: Poilievre's other explanation, which blames home prices on loose fiscal and monetary policy, holds less water. If government borrowing caused higher home prices, then Americans would have higher home prices. The U.S. federal deficit has vaulted over C$2 trillion, more than five times the size of Canada on a per-capita basis.

— The unspoken cause: The video neglects the biggest difference between the two Niagara regions. While the Buffalo metro area has experienced only modest population growth over the last decade, southern Ontario’s population is absolutely booming. Record levels of population growth, coupled with modest housing completions, is a recipe for price spikes.

TODAY'S HIGHLIGHTS


— Prime Minister JUSTIN TRUDEAU is in Ottawa with a 9 a.m. G7 leaders call on his schedule before attending an 11 a.m. caucus meeting. The PM will be due in Question Period at 2 p.m. before wrapping his day in Montreal at a 4:45 p.m. vigil to honor victims of the Polytechnique massacre.

— Deputy PM CHRYSTIA FREELAND is in Toronto with “private meetings.”

9 a.m. Polls open as the Assembly of First Nations votes for a new national chief.

9:30 a.m. Media will get a brief welcome inside a Conservative caucus meeting to cover PIERRE POLILIEVRE’s opening remarks.

10 a.m. The Bank of Canada will reveal its latest interest rate decision.

12 p.m. National Defense Minister BILL BLAIR will make an announcement in West Block about Canada’s military colleges. A media availability will follow.

3 p.m. Polls close in the AFN vote, with first-ballot results announced at 3:30 p.m.

Talk of the town

At the lighting of the Canadian Embassy Christmas Tree.

Ambassador Kirsten Hillman, House Speaker Greg Fergus and special guest Fox 5 News reporter Gwen Tolbart, a Montrealer, at the tree-lighting ceremony at the Canadian embassy in Washington. | Sue Allan, POLITICO Canada

ROCKING AROUND — The Christmas tree at the Canadian embassy in Washington was lit up Tuesday, becoming a brief bright distraction for drivers on Pennsylvania Avenue.

Ambassador KIRSTEN HILLMAN, House Speaker GREG FERGUS and special guest Fox 5 meteorologist and reporter GWEN TOLBART, a Montrealer, all had the honor of hitting a large red button to illuminate the massive balsam fir from Nova Scotia.

Fergus moved around the crowd with ease at the embassy event, not as someone on the brink of resigning.

— Meanwhile in Canada though: Fergus is under pressure from opposition parties to resign after he recorded a video shown at this weekend's Ontario Liberal leadership convention.

Conservative MP ANDREW SCHEER and operative JENNI BYRNE are among the loudest voices calling him an ill-fit for the non-partisan speaker's office.

Fergus, in Washington for two days of previously scheduled meetings, said he has no plans to step aside.

He met former House speakers NANCY PELOSI and KEVIN MCCARTHY on his first day in D.C. and is expected to meet MIKE JOHNSON today.

— In related reading: AARON WHERRY of CBC News writes: "The speaker is not the only MP who owes Parliament a duty of care."

MEDIA ROOM


THE HILL TIMES writes in an editorial: “Every time a charge is made that a Canadian MP supports terrorism, or backs an authoritarian, land-grabbing regime, or is a traitor, a tyrant, or a dictator, the social fabric tears that little bit more.”

— WTF is the ‘Global Stocktake’? POLITICO’s ZIA WEISE explains the ‘heart’ of COP28.

In the Sun, LORNE GUNTER challenges the timing of Environment Minister STEVEN GUILBEAULT’s COP28 energy announcements: “He waited until he was surrounded by his kind of people — celebrities, socially ‘woke’ consultants, billionaires, officials from the world’s governments, climate activists and ‘green’ cultists who love to fly around the world in jets spewing millions of tonnes of carbon dioxide, staying at five-star hotels, consuming scads of exotic foods and patting one another on the back for how environmentally conscious and morally superior they are.”

— Top of POLITICO this hour: In a sign of instability in Beijing’s top ranks, foreign policy and defense officials are vanishing as Xi roots out perceived enemies.

— Also from our D.C. colleagues: DONALD TRUMP said Tuesday he will not be a dictator “except for day one” if he returns to office in 2025.

CBC News’ ASHLEY BURKE reports on Sport Minister CARLA QUALTROUGH dropping clues to watch for the launch of an “independent mechanism” to probe allegations of abuse in Canadian sports next week.

MICHAEL TAUBE writes in the National Post: BONNIE CROMBIE will regret her decision to lead the Ontario Liberals.

— Montreal Mayor VALÉRIE PLANTE thanked people for their support after she collapsed during a press conference, reports the Gazette’s JASON MAGDER.

PROZONE


Our latest policy newsletter for Pro s from KYLE DUGGAN: Bracing for the next labor disruption.

In other news for Pro readers: 

House Republicans question DOE loan to Toronto-based green energy firm.

Brazil’s anger over EU carbon tax infiltrates COP28.

FTC probing Exxon’s $60 billion Pioneer takeover.

European Commission proposes to delay Brexit tariffs on electric vehicles by three years.

House China Committee mulls recommending repealing permanent normal trade relations with China.

PLAYBOOKERS


Birthdays: It’s former foreign affairs minister LAWRENCE CANNON’s 76th spin around the sun … Quebec MNA RUBA GHAZAL also celebrates.

Birthdays, gatherings, social notices for this community: Send them our way.

Spotted: More visitors from Ottawa for Ambassador Hillman including Liberal MP JULIE DZEROWICZ; Bloc MP CHRISTINE NORMANDIN; and Conservative Sen. PIERRE-HUGUES BOISVENU.

Conservative MP ARNOLD VIERSEN continuing a Sinterklaas tradition of gifting chocolate letters (he chose Ps as a nod to his boss) on colleagues’ desks in the House chamber.

Sen. DAVID WELLS mourning the failed bid to amend Bill C-234: “This bill is now gutted. It is likely that this will now die by process back in the House.”

FINTRAC slapping a $7.5 million fine on the Royal Bank of Canada for administrative violations.

MP DARREN FISHER paying tribute in the House to MYLES GOODWYN of April Wine who died Dec. 3. “Not a day goes by where Canadian radio does not play their classics.”

CBC News’ KATIE SIMPSON at the Canadian embassy in Washington’s tree lighting ceremony.

Movers and shakers: Agriculture Minister LAWRENCE MACAULAY has appointed DIEDRAH KELLY as the first executive director of the new Indo-Pacific agriculture and agri-food office in Manila.

Media mentions: Business journalist IAN VANDAELLE has died at age 33.

In memoriam: Former Nova Scotia MP and retired senator GERALD COMEAU has died.

MP SCOTT BARLOW paid tribute to the life of Alberta politician DON TANNAS, who died at the end of November. "He helped to build the Alberta advantage," Barlow told the House. "He was so proud to represent an agricultural riding and we shared a passion for bison and Alberta's ranching history."

Send Playbookers tips to ottawaplaybook@politico.com .

On the Hill

— It’s caucus day on the Hill.

8:30 a.m. Statistics Canada will release new reports on October international merchandise trade, labor productivity for Q3, and GDP “at basic prices, by census metropolitan area” for 2020.

9 a.m. Polls open as the Assembly of First Nations elects a new national chief.

9 a.m. The Parliamentary Budget Officer will release a new legislative costing note titled, “Revenue of a corporate tax rate increase based on CEO-to-median worker pay ratio.”

9:30 a.m. The Brookings Institution hosts a hybrid seminar titled, “Tackling global corruption to strengthen democracy and security.”

10 a.m. The Bank of Canada will reveal its latest interest rate decision.

10 a.m. Energy Minister JONATHAN WILKINSON, Newfoundland and Labrador Premier ANDREW FUREY, Labor Minister SEAMUS O’REGAN and Rural Economic Development Minister GUDIE HUTCHINGS will make an announcement about offshore renewable energy.

11:30 a.m. Sen. PETER BOEHM, chair of the Senate foreign affairs committee, will hold a media availability in the Wellington Building to discuss senators’ new report on the Canadian foreign service and GAC’s policy machinery.

12:50 p.m. Deputy Bank of Canada Governor TONI GRAVELLE will be at the Ciociaro Club of Windsor to say a few words before the Windsor-Essex Regional Chamber of Commerce. A media availability will follow.

3:30 p.m. The Assembly of First Nations will announce its election results.

4:15 p.m. The Senate legal and constitutional affairs committee will meet to debate Bill S-230.

4:15 p.m. Nine people are on the witness list for the Senate social affairs committee’s study on Bill S-235.

4:30 p.m. The House foreign affairs committee will meet to study supplementary estimates before changing the topic to the situation in Israel and Gaza.

4:30 p.m. The House ethics committee will meet to debate a request to launch a new study in the use of spyware by federal institutions.

4:30 p.m. The House human resources committee will meet to study volunteerism.

5 p.m. Superintendent of Financial Institutions PETER ROUTLEDGE will be at the Senate banking committee’s study on Bill S-243.

6:30 p.m. Health Minister MARK HOLLAND will be at the House health committee to take questions about the government’s advance vaccines purchase agreement with Medicago.

6:45 p.m. The Senate national finance committee will meet to study supplementary estimates.

6:45 p.m. Interim Assembly of First Nations Chief JOANNA BERNARD and Métis National Council President CASSIDY CARON will be at the Senate Indigenous peoples committee. The meeting will take place after the AFN elects a new chief.

7:30 p.m. The House transport committee will meet to take Bill C-33 through clause-by-clause consideration.

Behind closed doors: The House official languages committee will meet to continue discussion about its forthcoming report on increased Francophone immigration. The House public safety committee will meet to discuss committee business.

TRIVIA


Tuesday’s answer: PETER C. NEWMAN’s “Renegade in Power” was supposed to be called “The Tory Tornado.”

Props to PAUL MCCARTHY, ROBERT MCDOUGALL, MARCEL MARCOTTE, GEORGE SCHOENHOFER and HELEN DARBY.

Today’s question: The Canadian National Institute for the Blind was created after what tragedy that took place on this day in history?

Answers to ottawaplaybook@politico.com

Want to grab the attention of movers and shakers on Parliament Hill? Want your brand in front of a key audience of Ottawa influencers? Run a Playbook ad campaign. Contact Jesse Shapiro to find out how: jshapiro@politico.com.

Playbook wouldn’t happen without: POLITICO Canada editor Sue Allan, editor Willa Plank and Luiza Ch. Savage.

 

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