OTTAWA — Canadian businesses are already behind in the race to capitalize on rebuilding efforts in Ukraine, the head of the Canada-Ukraine Chamber of Commerce says, even though the country is facing some of the most brutal Russian attacks since the war began.

While it may seem counterintuitive to invest in reconstruction while bombs are still falling, the Chamber, whose mandate is to promote trade between Canada and Ukraine, said companies from other countries have been eyeing potential projects in Ukraine since Russia’s 2022 invasion. 

“Polish companies, Dutch companies, even Japanese companies … they were knocking on the doors and they were trying to find opportunities,” said the Chamber’s executive director Olha Mandyuk. “That’s why we wanted Canadian businesses to understand this, that you can’t wait. You have to start exploring now.”

Though the scale of destruction is overwhelming, and growing, it is unquestionably an opportunity for Canadian firms that specialize in the materials and work Ukraine will need, Mandyuk said. The most recent estimates suggest it will cost €506 billion ($810 billion) over the course of a decade to repair the damage to housing, buildings and infrastructure over the last three years. That’s nearly three times Ukraine’s estimated nominal GDP for 2024, according to a joint assessment by Ukraine’s government, the World Bank, the European Commission and the United Nations. 

G7 leaders signed a joint statement last year holding Russia responsible for the cost of reconstruction under international law. The World Bank Group estimated in 2023 that the private sector could cover nearly US$130 billion ($177 billion) by way of investments, or as much as a third of the cost of the recovery accrued at that point.

“Mostly that reconstruction is in those sectors that Canada has expertise in,” said Mandyuk, citing energy, infrastructure and agricultural needs. About 60 per cent of Ukrainian energy infrastructure has been destroyed in the war, she said. “So there’s huge opportunity there.”

A small number of Canadian firms are already in on the rebuilding effort, including Toronto-based construction firm Aecon, which signed on to help rebuild Ukrainian hydropower infrastructure; and Cameco, headquartered in Saskatoon, which signed a deal to supply Ukraine’s state-owned nuclear energy utility with fuel till 2036. 

Smaller firms like Calgary’s Duraflex are also starting to look for opportunities. The Calgary start-up makes admixture for a more durable concrete that can seal in contaminated soil. “It locks everything in, but it also locks everything out,” said founder Jim Yaworski. “It’s kind of like wrapping a battery case around contaminants.”. 

Yaworski’s connection to Ukraine is personal. He has a great aunt who still refuses to relocate from her apartment in Kyiv because she won’t abandon her small dog. He’s in talks with a Polish contractor, a Ukrainian road builder and a Ukrainian concrete precast company to use his product, he said. The potential upsides for his business are huge. Right now, the company has about $1.5 million in revenue, he said, an amount major projects in Ukraine could increase by multiples.

“We’re not looking at doing small projects,” Yaworski said. “The scale of the admixture that they would be using would be off the map.”

He’s not much concerned about the financial risk, since he is likely to be paid for his product up front.

When Russia launched its full-scale invasion of Ukraine in February 2022, it rolled tanks from the country’s northern, eastern and southern borders toward Kyiv. Ukrainian forces managed to expel Russian forces from the capital to front lines near the Russian border, where Russia has taken control of a large swath of Ukrainian territory. No part of the country, though, has been spared from the barrage of Russian rockets and drone strikes.

This was the first year Ukraine and Russia both seemed to entertain serious talk of peace since 2022, but those prospects dwindled after the disastrous televised meeting between U.S. President Donald Trump and Ukrainian President Volodymyr Zelenskyy in the Oval Office in February. The fighting has intensified, and this week, Russia launched a record number of attack and decoy drones on Ukraine. 

The risk of investing in a country under heavy bombardment spooks some Canadian companies, Mandyuk acknowledged. The Canadian business community is “more conservative and risk-averse than, for example, their partners in the EU and in the U.S.,” she said.

Finance Minister François-Philippe Champagne is representing Canada at a conference of governments, businesses and financial institutions in Rome this week to talk about how to get more private enterprises to take the risk. Security, financing, insurance, regulation and labour concerns are all on the agenda. 

Toronto’s Fairfax Financial, a Canadian holding company, is playing a leading role in bringing other international businesses on board, said Mandyuk. The company owns a 30 per cent stake in Ukrainian agribusiness Astarta-Kyiv, one of the country’s largest milk and sugar producers, and has been helping to keep agricultural exports moving during the war. 

Fairfax’s wheelhouse, though, is insurance. The company didn’t respond to The Logic’s request for an interview. Its subsidiary, Arx, partnered with a British firm to pool the risk of insuring commercial property in a war zone. As part of the first-of-its-kind program, FortuneGuard, a Ukrainian insurtech company backed by Lloyd’s of London, uses AI tools to assess how likely a property is to take damage based on official data about projectiles fired into the country. 

Arx also received $50 million from the U.S. International Development Finance Corporation in November to build a portfolio of war risk insurance policies for companies operating in Ukraine. Earlier this year, Fairfax bought full ownership of Arx, as well as Arx Life and Universalna, another Ukrainian insurer. 

Mandyuk hopes to get more Canadian firms involved by playing matchmaker between Canadian companies and partners in the EU and Ukraine at a conference in Warsaw in November. 

She, for one, isn’t letting the protracted war stop her from seeing the country herself. After postponing a trip to Ukraine for years because of the pandemic and then the war, she set off this week with her daughter. 

“It’s mostly to show my daughter where I’m from,” she said. “I decided that it just can’t wait anymore.”