This article originally appeared in the Globe and Mail.
By Marcus Kolga, Bill Browder and Aaron Gasch Burnett
October 16, 2025
How might history, our Ukrainian friends or Canadians judge us if $22-billion in frozen Russian state assets are drained overnight from Canadian banks and funnelled back into Russia’s war machine?
Unless Canada moves quickly to close a gap in its sanctions enforcement, this nightmare could become reality. Fortunately, there is a relatively simple solution that asserts Canadian sovereignty, strengthens the government’s negotiating position and enjoys cross-party political support.
Canada can swiftly eliminate the risk of this money returning to Russia by “double-freezing” the $22-billion in reserves of the Central Bank of Russia held in Canadian dollars.
In February, 2022, Canada helped lead diplomatic efforts to freeze US$300-billion worth of Russia’s Central Bank reserves held in Western currencies. The freeze saw the ruble’s value plummet and denied Russian President Vladimir Putin a significant source of cash, hampering Russia’s ability to fund its war effort. But this money remains in constant danger of being returned to Russia.
Belgian securities depository Euroclear manages the vast majority of these frozen assets, including Canada’s $22-billion share. Although Euroclear is based in Belgium, these billions are quite likely held in Canadian financial institutions – or even the Bank of Canada itself – where Euroclear holds its Canadian-dollar deposits on behalf of the Central Bank of Russia.
Bloomberg reports that the EU and its allies are nearing an agreement to use those frozen funds for loans to Ukraine. But the plan does not seize the funds outright, and this money has been frozen through EU sanctions that have to be voted on and unanimously extended every six months. If even one on the EU’s 27 members – say Hungary’s Viktor Orban – vetoes an extension, the $22-billion would pour right back into Mr. Putin’s war chest.
Canada can’t control how Europeans vote. But we can act now to independently freeze Canada’s share. An independent Canadian freeze also strengthens Canada’s voice at the negotiating table as its G7 and EU allies work out how these frozen funds will be used.
How? Follow the money.
Canada’s sanctions legislation allows the Foreign Affairs Minister, in consultation with the rest of cabinet, to request Canadian banks disclose any Euroclear deposits they’re holding, and for any amounts deposited on behalf of Russia’s Central Bank to be moved to separate accounts.
Once that’s done, Canada’s Special Economic Measures Act would kick in and freeze it. That’s because SEMA already lists the Central Bank of Russia itself as a sanctioned entity. Both European and Canadian freezes would then keep that $22-billion effectively “double-locked” – meaning that the Canadian share of Russia’s frozen funds stays in Canada, even if a catastrophic veto drops at the EU table.
Double-freezing also gives Canada an opportunity to demonstrate leadership in its support for Ukraine by encouraging other non-euro countries holding frozen Russia assets to pass their own double-freezes. With Britain holding at least a $47-billion share and Australia with at least an $8-billion share, Canadian leadership can be powerful well beyond our own borders – at no extra cost to taxpayers.
With Canadian Liberals, Conservatives and New Democrats all on record as supporting using Russia’s frozen assets and a public largely behind Ukraine, there is simply no reason not to double-freeze – especially when the consequences of failing to do so could be so dire.
A scenario that sees $22-billion in frozen funds flow out of Canadian banks and back to Mr. Putin would threaten both Ukrainian and Canadian security and undermine our international credibility.
Russia would receive a war chest likely held in Canadian banks that eclipses the $19.5-billion worth of Canadian support provided to Ukraine since 2022. Russia is likely to use this windfall to further threaten Ukraine and the wider West, including in Canada’s Arctic.
Canadian taxpayers, like their G7 counterparts, could also be left on the hook for billions in loans made out by the bloc to Ukraine. These loans are currently being repaid by the interest on frozen Russian assets (separate from the current EU plan to use the principal amount to back loans). Without those assets to generate interest, repayment will have to come out of somewhere.
With the next EU sanctions rollover deadline looming on Jan. 31, there’s no time to waste. Canada must immediately show both its own initiative and international leadership to help safeguard itself, Ukraine, our allies and its international credibility by double-freezing the frozen assets held in Canadian dollars.
Marcus Kolga is the founder of DisinfoWatch and a senior fellow at the Macdonald-Laurier Institute.
Bill Browder, KCMG, is the chief executive of Hermitage Capital Management and head of the Global Magnitsky Justice Campaign.
Aaron Gasch Burnett is a security analyst at the European Resilience Initiative Center, based in Berlin.
