The revelation puts into question the government's tough line on
Russia over the crisis in Ukraine. Prime Minister Stephen Harper
recently compared Putin's actions to those of Adolf Hitler in the
run-up to World War Two.
Canada, home to 1.2 million people of Ukrainian descent, has imposed
sanctions on more than 80 Russian and Ukrainian officials and
businesses, compared to about 60 by the United States.
But unlike the United States, Canada has not moved against Sergei
Chemezov, who heads state-owned industrial and defense conglomerate
Rostec, and Igor Sechin, CEO of oil giant Rosneft. Both men, who are
close to Putin, have business ties to Canada.
Rosneft owns some 30 percent of a Canadian oil field, while
Rostec has an aircraft assembly joint venture lined up with
Bombardier Inc. The venture is vital to the Canadian plane and train
maker, as the fate of a roughly $3.4 billion aircraft sale deal is
tied to it.
Asked about the decision not to go after either Sechin or Chemezov,
a Canadian government source familiar with Ottawa's sanctions
strategy told Reuters: "Our goal is to sanction Russia, it is not to
go out of our way to sanction or penalize Canadian companies."
The comments appear to contrast with the official government
approach. Harper, referring to the Ukraine crisis, said in March
that "we will not shape our foreign policy to commercial interests"
and officials say that stance is still valid.
Indeed, the Conservative government on Wednesday called on business
executives not to attend events in Russia, like the St. Petersburg
International Economic Forum this month and the World Petroleum
Congress in Moscow in June.
"We will continue to apply pressure to Russia, we will continue to
impose sanctions along with our allies, but we will also look out
for Canada's broader interests," the government source said.
Canada's official opposition New Democrats said the failure to
target Chemezov and Sechin undermined the case for sanctions.
"It's egregious. I think this is not consistent with what the
government's rhetoric is on getting tough with the Russians and
getting tough with Putin," the party's foreign affairs spokesman
Paul Dewar said.
In Europe, some leaders have also tempered their criticism of
Moscow, in a sign they, too, are worried about business ties with
Russia, a major provider of oil and gas to the region.
But Harper took a strong line from the start, castigating Putin and
pushing the effort to have Russia kicked out of the Group of Eight
leading industrialized nations.
CEO LOBBIES OTTAWA
As Ottawa developed its sanctions policy, it was being lobbied by
top officials from Bombardier, which is one of Canada's major
The company last year signed a preliminary deal to sell 100
short-haul aircraft in Russia and agreed to set up an assembly line
for the planes in that country, in partnership with Rostec.
Bombardier also has other interests in Russia, including a
long-standing joint venture in its rail business.
[to top of second column]
Canada's official registry of lobbyists shows Bombardier CEO Pierre
Beaudoin reported six meetings in March with government officials,
including Transport Minister Lisa Raitt and Industry Minister James
One source familiar with the discussions said Bombardier
did not specifically ask the government to keep Chemezov off the
sanctions list but stressed the ramifications that punitive measures
could have on its business interests in Russia.
Three of the meetings took place on March 4 and one on March 7.
After Canada announced sanctions in mid-March, Bombardier again met
with senior officials on March 20 and 27.
Bombardier declined to comment on the specifics of its lobbying
efforts in Ottawa but said the discussions revolved around its
extensive overseas interests, among other matters.
A spokeswoman said the firm remained hopeful about the joint venture
with Rostec, but acknowledged the current political environment was
likely to delay its timeline.
The registry of lobbyists showed no record of Rosneft
representatives meeting with the Canadian government in March. But a
third well-placed source, familiar with sanctions planning,
confirmed the decision to exclude both Chemezov and Sechin was made
because of Canada's commercial interests.
Rosneft owns 30 percent of an Exxon Mobil Corp oil field in the
western province of Alberta, where it is learning the horizontal
drilling and fracturing techniques that have revolutionized the
North American oil industry.
Canada coordinates sanctions closely with the United States, which
described Chemezov as a trusted Putin ally and said Sechin "has
shown utter loyalty" to the Russian leader.
Outwardly, Canada's reluctance to impose sanctions on the pair does
not appear to have caused tensions with its neighbor. A White House
official said the United States valued its cooperation with Canada
and other partners.
In Moscow, spokespeople for both Rosneft and Rostec declined to
(With additional reporting by Megan Davies in Moscow, Jeff Mason in
Washington and Scott Haggett in Calgary; Editing by Jeffrey Hodgson
and Ross Colvin)
[© 2014 Thomson Reuters. All rights
Copyright 2014 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.