Canada's new sanctions targeting Russia could hurt Canada's economy as well, Freeland says

Canada will hit Russia with more sanctions and economic policies designed to undermine Russian President Vladimir Putin's ability to wage war — and some of those moves might end up hurting Canada's economy, Finance Minister Chrystia Freeland said Tuesday.

Freeland made those remarks Tuesday afternoon after meeting with the finance ministers of the other G7 nations and the Ukrainian finance minister to discuss measures to punish Russia for its invasion of Ukraine.

"Tariffs and retaliation and sanctions are the most effective when you can devise policies that have the maximum impact on the counter party whose attention you are seeking to get, and do the minimal damage to yourself," Freeland said, adding that, so far, sanctions have been structured to avoid harming Canadian business interests.

"If we are truly determined to stand with Ukraine, if the stakes in this fight are as high as I believe them to be, we have to be honest with ourselves, I have to be honest with Canadians, that there could be some collateral damage in Canada and that's something that the G7 finance ministers discussed very early this morning."

Freeland would not offer details of the measures she and the other finance ministers discussed. She said the government will have more to say in the coming days. 

"I cannot announce those additional measures today," she said. "We are discussing them, we are working with our partners and allies. We have suggested many things, as have our allies. We believe that the most effective thing to do is to work together to announce measures together and we will continue to do that."

Natural Resources Minister Jonathan Wilkinson announced Tuesday evening that Canada will now ban all petroleum products from Russia. The government said a day earlier that it would only ban Russian crude oil.

Wilkinson said on Twitter that government officials were told "to design a ban that will minimize the impact to the Canadian economy, while maximizing the impact on the Russian economy."

Canada imported more than $250 million worth of refined petroleum products from Russia in 2021.

During question period in the House of Commons Tuesday, interim Conservative leader Candice Bergen asked the Liberal government if it will expel Russia's ambassador to Canada and recall Canada's ambassador to Russia. 

Prime Minister Justin Trudeau sidestepped the question, saying only that Foreign Affairs Minister Mélanie Joly did summon Russia's ambassador to her office to express Canada's extreme displeasure with Russia's actions.

Later in the day, Freeland said that Canada and other democracies have been working together and likely will continue to do so.

"When it comes to sanctions, let me just underscore that we know that we are the most effective when we act together," she said.

"I think that one of the reasons that the sanctions have been much tougher than Russia expected, and have had a much tougher impact than anyone expected before this war began, is that we've managed to have unprecedented unity among the democracies."