'Called the wrong bluff': Ministers criticized for Canada's Russian turbine return during tense hearing

OTTAWA -

Foreign Affairs Minister Melanie Joly was challenged Thursday on her assertion the federal government making the decision to grant a two-year exemption to federal sanctions, allowing a Canadian company to return repaired turbines from a Russian-German natural gas pipeline, was done to "call Putin's bluff."

"Russia has weaponized energy by cutting the flows of gas to Europe. We hoped to leverage Canada's role in the maintenance of Nord Stream 1 turbines to do just that," Joly said Thursday during her testimony as part of parliamentary hearings on Canada's decision to return Russian-owned pipeline parts.

The foreign affairs minister said ahead of Canada making the decision, both she and Natural Resources Minister Jonathan Wilkinson discussed the matter with Germany and Ukraine, encouraged discussion between the two countries, and sought to find alternatives including an ultimately deemed unviable route for the gas to flow through Ukraine.

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"Knowing that turbines were being repaired in Canada, the German Chancellor reached out to us directly pleading for us to call Putin’s bluff," Joly said, going on to make an effort to tout Canada's efforts to support Ukraine to date, from highlighting the range of sanctions imposed on the various tranches of military, financial and humanitarian aid.

However, opposition MPs were quick to question this rationale, peppering the minister with questions over why this idea of calling “Putin's bluff” has only recently been circulated, and why Canada didn't consider it would be predictable that Russia would continue to use energy as a weapon regardless of what happened with the turbines.

"This whole decision was based on the idea that there is any trust, any belief that Putin would in fact continue to provide gas to Germany… He lies. We know Putin lies… Why call the bluff as you say, when realistically, he's already told us, he's already told the world what he intends?" asked NDP MP and foreign affairs critic Heather McPherson. "We already knew the bluff was there. So now what we've done is we've weakened our sanctions regime, we've weakened Canada's stand standing with Ukraine, and yet we haven't actually helped get gas to Germany."

CANADA GOT OUTPLAYED: CONSERVATIVES

Wilkinson testified alongside Joly at Thursday's meeting of the House of Commons Foreign Affairs Committee, speaking to the events that unfolded in the lead up to the decision, including the consideration that Canada's sanctions regime was meant to directly punish Russia, not indirectly jeopardize European economies.

"The trap that Putin was trying to set by weaponizing the Nord Stream pipeline was obvious. Don't return the turbines such that Canada and the West are likely to be blamed for reducing the gas flow to Europe and risking dividing the alliance, or return the turbine and risk a perceived weakening in the alliances' resolve regarding sanctions," Wilkinson said.

During a heated exchange in which Conservative MP and ethics critic James Bezan suggested Putin was "playing chess" while the Government of Canada was "playing checkers" and was "outplayed," Wilkinson denied Canada was effectively enabling Gazprom to put more money into Russia's "war machine."

"I think Mr. Bezan you actually misunderstand a lot of the things that were going on," Wilkinson said, asking what the Conservatives would have done differently. "It's very easy to make those kinds of comments."

Committee members voted in July to launch a special summer study into the federal government's decision to circumvent Canadian sanctions, expressing a desire to be briefed by those involved in the decision on how it was made, and what its implications and ramifications are.

'CALLED THE WRONG BLUFF': UCC HEAD

The marathon committee hearing continued after the ministers’ testimony, with President of the Ukrainian Canadian Congress Alexandra Chyczij explaining to MPs her organization’s opposition to Canada's decision, suggesting that granting the permit has given Russia leverage they will continue to try to exploit in regards to the energy sector.

"I think it has always been about sanctions, not about the pipeline or the turbine. And we have allowed ourselves, Canada has allowed itself, to be party to blackmail that resulted in a waiver of those sanctions," she told the committee.

Chyczij questioned whether the federal government did do—as it claims— everything possible to avoid lifting sanctions on Gazprom, and whether there remains any justification to continue with the permit given Russia's continued choking off of energy supplies.

"It's absolutely clear that Russia contrived the Nord Stream 1 debacle to test the resolve of Germany, Canada, and our allies on sanctions. And we have failed that test. Germany and Canada did not understand what the test was. It's about sanctions, the unity on sanctions, not just on Nord Stream 1… So when Chancellor Scholz says that he called a bluff, he called the wrong bluff."

Her organization, working alongside the Ukrainian World Congress, have sought to challenge the decision in Federal Court, arguing that granting the permit "was not reasonable, transparent or properly authorized."

AMBASSADORS EXPRESS DIFFERING VIEWS

Canada's decision to allow the return of these turbines has been met with mixed reviews internationally. While it has been backed by allies, such as the U.S. and the EU, it has been roundly condemned by Ukrainian President Volodymyr Zelenskyy,

Diving further into the differing views on the issue, MPs also heard testimony from the Ambassador of Ukraine to Canada Yuliia Kovaliv, the Ambassador of Germany to Canada Sabine Sparwasser, and the Ambassador of the European Union to Canada Melita Gabric.

Both Sparwasser and Gabric offered insight into the rationale for their support of Canada's decision as a short-term necessity as Germany and other European countries work to reduce their reliance on Russian oil and gas.

"We appreciate Canada's investment in European security and its commitment to a rules-based international order," Gabric said. "With the return of this part, one of the excuses being used by Russia for reduced gas flows was removed."

Sparwasser told the committee that while the debate being had about the turbines is an important one, with valid arguments on both sides, it should not be forgotten that it's a debate happening among allies who are united in their overall goal of not allowing Russia to win the war on Ukraine.

"No decision is perfect. None was easy. It was only after a lot of soul searching that Germany asked Canada to allow a waiver of its national sanctions regime. And the Canadian government did grant it, after difficult deliberations. We're very grateful for the decision," the German ambassador said.

In contrast, Kovaliv restated Ukraine's position that Canada is setting a dangerous precedent and renewed Kyiv's calls to reverse the decision, arguing that Ukraine would be capable of providing substitute gas delivery despite currently being under attack.

"This waiver is not a one time decision. The maintenance of all six turbines in Canada will cement Russia's ability for years ahead to weaponize energy and to derail the efforts to address climate change, and it will be done with Canada's blessing," Kovaliv said. "Now it's more than clear that the additional five turbines that were allowed to be further maintained in Canada will be turned by Russia into tools of humiliation."

"We urge you: do not take the bait. There was no need to waive the sanctions to call the Putin regime's bluff… You just can Google the history. This logic of appeasement already failed to prevent the war in Ukraine," said Ukraine's ambassador.

'PUTIN HAS NOTHING LEFT TO HIDE BEHIND'

The issue bubbled up last month after Wilkinson announced Canada would be granting Siemens Canada a "time-limited and revocable permit," allowing the company to return turbines — part of Gazprom's Nord Stream 1 pipeline — that had been sent to Montreal for repairs.

After the federal government imposed sanctions on Russian state-owned energy company Gazprom as part of an expanding economic sanctions program in retaliation for the invasion of Ukraine, Siemens Canada was restricted from sending the equipment back.

As a result, Canada faced pressure from both Russia and Germany to return one of the turbines to Germany ahead of scheduled maintenance that has since gone ahead. Wilkinson said Thursday that in June, Siemens Canada applied to Global Affairs Canada with an urgent request to continue scheduled maintenance of the turbines at its facility, saying it was the only facility in the world capable of providing the service needed.

Gazprom claimed it needed the turbines in order to continue supplying Germany, after already considerably decreasing the gas flow through the pipeline. This prompted Germans to express concern that Russia could use not having the turbines as a reason to further cut off its natural gas supply, leaving Germany without a sufficient reserve.

However, since the turbine has been returned, Russia has further reduced gas supplies and has not installed the key piece of pipeline infrastructure it said it needed. According to The Associated Press, German Chancellor Olaf Scholz inspected the turbine on Wednesday in Germany and said there were no problems prohibiting the part's return to Russia, other than missing information from Gazprom.

"With the issue of turbine maintenance taken off the table, Putin has nothing left to hide behind. When the flow of gas slows down, the world now knows with certainty that it was Putin's decision and his alone," Joly said Thursday.

While it was not made clear by the Liberal government at the time the deal was announced, the permit allows for the movement of six turbines to be sent back and forth for regular maintenance over the next two years, with the ability for the permit to be revoked at any time. There has no been indication to date that Canada is prepared to do so.

Canada has ardently defended the move, saying while it was a difficult decision, it was necessary to push back on Russia's attempts sow division among western allies, as well as to ensure European allies are able to "stay steadfast and generous in their support of Ukraine," which would become more difficult to do if their economies were feeling the impact of reduced energy resources.

Ahead of two of her ministerial counterparts taking the hot seat, Defence Minister Anita Anand said Thursday the federal government is backing Ukraine "full stop" despite the contentious move.

"I have been in touch with [Ukraine Defence Minister Oleksii Reznikov] this morning and we continue to stand in solidarity with Ukraine and with our counterparts in the Ukrainian government," Anand said. "They recognize that we stand with Ukraine shoulder-to-shoulder, full stop."

After announcing Canadian Armed Forces personnel will be deployed next week to take part in a training mission of Ukrainian soldiers in the U.K., Canada's defence minister was questioned about Canada heeding Ukraine's requests for military assistance while still standing by returning of these parts, something Ukrainians have suggested will indirectly allow Russia to continue funding its war.

"We will continue to impose severe costs on the Russian regime in response to Putin's illegal and unprovoked war against Ukraine. At the same time, it is important for us to support our European friends and allies as they work to end their dependency on Russian gas imports as quickly as possible," Anand said.