Canada revoking sanctions exemptions for Nord Stream turbines

OTTAWA -

Canada has revoked an exemption to sanctions that had allowed a Montreal company to repair turbines for the Nord Stream pipeline operated by Russian state-owned energy giant Gazprom.

The decision on Wednesday comes three months after explosions, which Swedish investigators said were the result of "gross sabotage," rendered the pipeline carrying natural gas beneath the Baltic Sea from Russia to Germany inoperable.

"Canada is making this decision recognizing that the circumstances around granting the waiver have changed," Natural Resources Minister Jonathan Wilkinson and Foreign Affairs Minister Melanie Joly said in a joint written statement on Wednesday.

"It no longer serves its intended purpose."

They said that purpose was to call the "bluff" made by Russian President Vladimir Putin when he blamed the turbines for causing maintenance issues that prevented Russia from flowing gas to Germany.

The pipeline is owned by Gazprom, but Siemens Canada had a contract to maintain turbines for the pipeline at its Montreal facility. One of the turbines was in Montreal when Canada sanctioned Gazprom following the decision by Putin to invade Ukraine.

Russia began limiting gas flows to Germany in June, citing maintenance concerns. Germany, facing an energy supply crisis, asked Canada to exempt the turbines from the sanctions.

Canada agreed, expecting to prove that Putin would still not ship gas to Germany even after getting the turbine back.

"With the granting of this waiver, the government removed Putin's excuse for withholding gas exports to Europe," they said.

But Putin never did resume full shipments and in August the pipeline flows were halted entirely. In September explosions were detected along the route.

"Putin has been forced to show that his intention was never to return Nordstream 1 to full operation," the federal ministers said.

The exemption affected six turbines but only one was in Canada. The other five were not shipped to Canada following the exemption.

Canada's exemption caused political turmoil, with Germany desperate to get access to more energy and Ukraine accusing Canada of playing into Putin's hands and showing the West's resolve against Russia to be "weak."

A House of Commons committee was struck to study the issue, and held several hearings but fell apart in November when the Conservatives accused the Liberals of filibustering. The committee has not met on that issue since mid-November.

Prime Minister Justin Trudeau spoke by phone with German Chancellor Olaf Scholz Tuesday, and the issue of energy and the exemptions was discussed.

Ukraine has also been informed of the decision.

This report by The Canadian Press was first published Dec. 14, 2022.