No refunds: $115 million in tariff proceeds committed to power grid restoration in Ukraine

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Eastern Canadian farmers who paid millions of dollars more for fertilizer in 2022 due to sanctions on imports from Russia will not be getting a refund, as the Canadian government is forwarding $115 million in expected tariff revenues to repair the power grid in Ukraine.

Deputy Prime Minister and Finance Minister Chrystia Freeland announced the commitment at a Ukrainian solidarity conference in Paris, France on Tuesday.

Imports into Canada from Russia and Belarus have been subject to 35 per cent tariffs since March 2, 2022, with nitrogen fertilizer destined for fields in Eastern Canada at or near the top of the list of imported goods.

Farm groups, including Grain Farmers of Ontario, the Atlantic Grains Council, and Québec Grain Farmers, have been calling on the government to refund tariff fees directly to farmers.

How much of the $115 million in expected tariff proceeds comes from fertilizer is not known, but as of June 30 (the end of the fertilizer reporting year), the Canadian government had collected $34.1 million in tariffs on fertilizer from Russia and Belarus, according to Finance Canada.

Responding to a written inquiry from the Conservatives, the finance department said the duties were collected on fertilizer imports worth $97.5 million, while $75.5 million in fertilizer imports did not have customs duties applied as these shipments were deemed to be in-transit when the tariff took effect.

RealAgriculture has asked for more information from Minister Freeland’s office, including the timeframe over when the $115 million in tariff revenues were collected, and whether the government considered reimbursing farmers for added fertilizer cost.

Canada is the only G7 country that has maintained a tariff on Russian-sourced fertilizer, while the United Nations and other international organizations have urged countries to not restrict fertilizer trade as a matter of global food security.

“Putin and his henchmen are war criminals, and they are attempting to use the cold as a weapon to break the spirit of the remarkable people of Ukraine. They will not succeed, and this support will help ensure that Ukraine can secure its energy infrastructure and make it through the difficult winter to come,” said Freeland, in a press release announcing the $115 million commitment.

Related:

Farm organizations ask for $34 million in fertilizer tariff reimbursement

Critical fertilizer shipments for Eastern Canada stranded by sanctions against Russia

Editor’s note: This story has been updated to correct the timeline for when Finance Canada shared information on tariff revenues up until June 30.

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