OTTAWA — The Canadian Bar Association and a lawyer helping firms navigate Canada’s sanctions regime warn that reforms in the federal budget bill seeking to clarify the rules will actually have the opposite effect.

The Liberals are proposing changes that would specify which entities are barred from doing business with Canadians, such as companies that are 50 per cent or more owned by someone whom Ottawa has sanctioned.

William Pellerin, an Ottawa-based trade lawyer with the firm McMillan LLP, says that change puts Canada in line with allies, but other proposals are too vague.

He noted that another part of the bill targets foreigners who can direct a company’s activities “directly or indirectly, and through any means,” which he says will be too difficult for companies to track.

The Canadian Bar Association says the current phrasing would create more uncertainty and penalize Canadian entities seeking to comply with rules that aren’t as clear as those in other countries.

There has been a historic uptick in the number of individuals and corporations Ottawa has sanctioned in response to Russia’s invasion of Ukraine, as well as human-rights crackdowns in Iran and gang violence in Haiti.

The office of Finance Minister Chrystia Freeland says it will respond this afternoon.

This report by The Canadian Press was first published May 19, 2023.

The Canadian Press