Canada offers $120 M loan, considers sending small arms to Ukraine to counter threat of Russian invasion

Canada today offered Ukraine a $120 million dollar loan to help the eastern European nation face down what Prime Minister Justin Trudeau called an “aggressive” attempt by Russia to destabilize it.

Ottawa is offering Ukraine a $120 million loan for 'economic resilience and governance reforms'

A Ukrainian soldier walks on the line of separation from pro-Russian rebels in Mariupol, Donetsk region, Ukraine, on Jan. 20, 2022. (Andriy Dubchak/AP)

Canada today offered Ukraine a $120 million dollar loan — and is actively considering sending it a shipment of small arms — as the eastern European nation faces down what Prime Minister Justin Trudeau called an "aggressive" attempt by Russia to destabilize it.

As he announced the loan offer today, the prime minister also hinted at more military assistance for Ukraine while insisting again that Moscow "de-escalate" and refrain from further invading and occupying Ukrainian territory.

That assistance is expected to involve helping Ukraine equip a new branch of its military.

A statement from the Ukrainian Embassy in Ottawa, issued late today, said that in response to the Russian military build-up, Ukraine has created "a new separate branch of Armed Forces – the Territorial Defence Forces.

"To better equip them, we highly seek to receive the critical supplies from our friends in Canada."

Among the weapons Canada is considering sending are small arms, protective vests and goggles, two sources told CBC News. Those items would be part of a package of both "lethal and non-lethal equipment."

A militant of the self-proclaimed Donetsk People's Republic (DNR) holds a weapon at fighting positions on the line of separation from the Ukrainian armed forces near the rebel-controlled settlement of Yasne (Yasnoye) in Donetsk region, Ukraine January 14, 2022. (Alexander Ermochenko/Reuters)

Whether Canada would provide extra troops to help train those irregular forces is unclear.

No decision has been made on the assistance package. The sources said an announcement is expected to come after next week's virtual federal cabinet retreat.

The federal government said the loan announced today is meant to go toward "economic resilience and governance reforms." The terms of the loan are to be negotiated with the government of President Volodomyr Zelensky in Kyiv.

"We are grateful to Canada for working together with other international partners and colleagues to make it clear that Russian aggression and any further incursion into Ukraine is absolutely unacceptable," said Andrii Bukvych, charge d'affaires at the Ukrainian Embassy to Canada.

"Canada's interest is stability and well-being in Europe, which is infeasible without stable, democratic and flourishing Ukraine."

The loan is among the top requests Ukraine has issued to Canada and is intended to ease "the aggressive economic destabilization that is perpetrated by Russia," Trudeau told a virtual press conference, called to announce a domestic affordable housing initiative.

"One of the things the Ukrainian government has been clear [about] is having additional resources to shore up their economy would be extremely important in reassuring the Ukrainian people and standing strong against Russian destabilization," he said.

Canada has been one of Ukraine's biggest bilateral donors since 2014, having spent $245 million on the country's constitutional, judicial and security reforms, among other things. That figure does not include what both Liberal and Conservative governments have spent on military training and technical assistance missions in Ukraine over the past seven years.

The Canadian loan offer is part of a flood of western financial assistance that has flowed into Ukraine over the past several months.

In December, the World Bank approved a $428 million (300 million euro) loan to help Ukraine offset the economic shocks brought on by COVID-19. International financial institutions also kicked in a $285 million (200 million euro) loan to help expand transportation infrastructure across Ukraine.

Russian soldiers take part in drills at the Kadamovskiy firing range in the Rostov region in southern Russia, Thursday, Jan. 13, 2022. (The Associated Press)

Separately, the International Monetary Fund (IMF) last fall approved a $700 million loan to help the country implement further reforms.

Trudeau said Canada is prepared to send military assistance but would not state precisely what he's prepared to offer. He also refused to state unequivocally that Canadian troops would not be drawn into any conflict between Ukraine and Russia.

"I'm not going to engage in hypotheticals," he said in response to a question. "Canada has been and will continue to be a friend and ally of Ukraine, and we will continue to be there to support them and ensure that the Ukrainian people get to determine their future — not Vladimir Putin."

Also today, Foreign Affairs Minister Mélanie Joly made a stop in Brussels, where she met the secretary general of NATO for further talks on the crisis.

The meeting was just one part of a wider diplomatic effort on the international stage. U.S. Secretary of State Antony Blinken met today with his Russian counterpart, Sergei Lavrov, in Geneva.

U.S. Secretary of State Antony Blinken, left, greets Russian Foreign Minister Sergey Lavrov before their meeting in Geneva, Switzerland on Friday, Jan. 21, 2022. (Alex Brandon/The Associated Press)

Lavrov described the talks as open and useful. He said, however, that Moscow would reserve judgment on whether the talks were on the right track until after it has received a written response to its sweeping security demands from the United States.

Russia's demands include a halt to NATO's eastward expansion and a pledge that Ukraine will never be allowed to join the Western military alliance.

Lavrov said Russia had worries of its own, "not about invented threats, but real facts that no one hides — pumping Ukraine with weapons, sending hundreds of western military instructors."

Canada is the biggest western troop contributor to military training in Ukraine, with 200 soldiers spread out in 13 different locations.


Murray Brewster

Senior reporter, defence and security

Murray Brewster is senior defence writer for CBC News, based in Ottawa. He has covered the Canadian military and foreign policy from Parliament Hill for over a decade. Among other assignments, he spent a total of 15 months on the ground covering the Afghan war for The Canadian Press. Prior to that, he covered defence issues and politics for CP in Nova Scotia for 11 years and was bureau chief for Standard Broadcast News in Ottawa.

Sources approved by Carter


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