Hon. Peter A. Stollery:

Honourable senators, it has been many years since I read The Fall of the Russian Empire, by Edmund Walsh, that still sits in my library and that my dad bought in 1931. I suppose that I read it in the early 1950s. I read a lot in the late 1940s and 1950s. People around me still talked about the purges. They had been broadcast on the radio. I can remember clearly my dad talking about the Moscow trials. "They all pleaded guilty in public," he would say, shaking his head.

Even during the war, my mother did not like the Russians because of the communists. Remember, this was before the Cold War started. However, my dad was for our Russian allies and told me that at school in Toronto during World War I — at the time it was referred to as the Last War — they sang "God Save the Tsar." Russia was our ally then as well. All I knew about Russia was the 900 days of Leningrad and Stalingrad, and the fall of Berlin. Then came the Cold War and Kremlinology and people who mostly pretended that they knew about Russia.

The best story I heard was from a dramatic Pole I saw interviewed on early television about the death of Stalin. He was convincing and had Stalin having a stroke at a meeting and lying on the floor, seemingly dead. Lavrentiy Beria was supposed to have said, "Look. The monster's dead." When Stalin opened his eyes and looked at him, Lavrentiy Beria got down on his hands and knees and begged forgiveness.

The Pole relating the incident was persuasive. He talked the U.S. networks into interviewing him, and he persuaded me, and for years my friends and I talked about the scene with Beria on his knees.

Now, only 20 years after the collapse of the Soviet Union, what a difference there is. I have a dozen serious books in my library, many of them based on interviews with people like the Mikoyan family members, the Berias, Georgy Malenkov's daughter and Vyacheslav Molotov's grandson. The KGB archives have been public for years.

Twenty years ago, I read Telford Taylor's The Anatomy of the Nuremberg Trials. He was one of the prosecutors. He wrote in 1990:

"In 1945 and for fifteen to twenty years thereafter, the reading public in the Western world knew a good deal about the structure and record of the Third Reich and the names of its leading personalities — Hitler, Goering, Goebbels, Ribbentrop, and Himmler, among others — were household words. Today that is no longer the case."

That is happening today with the main personalities of the Soviet period. The world has moved on. Looking at history, it would be hard to find another example of a country that has achieved what Russia has achieved in only 20 years from what Orlando Figes described in A People's Tragedy — and not much more than 10 years from their effective bankruptcy.

Our committee, the Standing Senate Committee on Foreign Affairs and International Trade, started working on Russia along with Ukraine about 10 years ago. The germ of the idea of studying Russia and Ukraine came from the committee's study of the North Atlantic Treaty Organization, mostly chaired by my distinguished predecessor, Senator John Stewart. We heard repeatedly from the members of NATO that Russia was the potential enemy, as a reason for maintaining the fiction of the North Atlantic Treaty Organization.

Our report, which I finally produced as chairman when Senator Stewart retired, is skeptical about the future of NATO. The report was unanimous. Ten years ago, Russia was coming out of turmoil. Its critics seemed uninformed, so the committee decided to take a serious look. The report was a first, at least in Canada. I had the staff install a large map of Russia at the head of the room so we could at least follow the unfamiliar geography.

We went to work. Before we were finished, a small group of senators, including Senator Andreychuk, our vice-chairman, and me, met with President Vladimir Putin for a candid question-and-answer period. In my opinion, that report was limited, but it was a first. We started the ball rolling on this region of the new emerging world with which Canada needed to engage.

As I wrote at the time:

. . . this report is the result of years of work in which we saw European affairs moving further and further east and committee members' increasing concern about what this means for Canada.

Now, under the able chairmanship of Senator Di Nino, we had a second report about Canada and Russia eight years after the first one, and how things have changed. Russian gross domestic product has quadrupled while Canada's has not quite doubled. Russian foreign currency reserves have gone up 10 times. Most important, Russia has become more and more a part of the world mainstream.

The real weakness of our first attempt to understand Russia was that the committee did not go there in 2002. Under Senator Di Nino's chairmanship, last October we did.

One is given an impression when one listens to witnesses in Ottawa or reads a fact book that says, and I quote from the CIA world factbook:

. . . the rapid privatization process, including a much criticized "loans-for-shares" scheme that turned over major state-owned firms to politically-connected oligarchs, has left equity ownership highly concentrated. The protection of property rights is still weak and the private sector remains subject to heavy state interference.

One has a different impression when one goes to Moscow, or in my case, St. Petersburg, Tver, Yaroslavl, Kostroma, Ivanovo, Vladimir, Nizhny, Novgorod and Kazan and see the energy, the thousands of private cars — Russia has taken over from Germany as the largest car market in Europe — and infrastructure improvements; the thousands of new apartments and complexes, the many shops and good restaurants filled with customers and the busy streets and highways.

One of our colleagues who was going to Russia asked me about changing money. I told him to forget it, and go to a bank machine, which are everywhere.

During our October visit, the committee visited one of the many Auchon supermarkets in Moscow. I believe there were 96 busy checkouts, with hundreds of customers. As I said to Senator Di Nino, they cannot all be oligarchs. Our able researcher, Natalie Mychajlyszyn, reminded me that the particular Auchon we visited was so big we could hardly see the end of the line of checkouts from the first one.

As I prepared these few words, I could not help wondering about that CIA World Factbook. There was no texture. It did not reflect what members of the committee saw. It was out of date, and I am talking about information updated as recently as April 28, 2010.

I was not entirely happy with the results of our first Russia study. It was not only that we did not visit. There were witnesses that were good; there were witnesses that I did not believe.

As honourable senators are aware, the committee moved on to our review of the Free Trade Agreement and North American Free Trade Agreement. Then, encouraged by Senator Corbin, we worked on our Africa report, which received a great deal of favourable publicity and, as I never tire of reminding people, 20,000 downloads the last time I looked.

However, I did not forget about Russia and my unhappiness. My problem was that, although I speak a language or two and have travelled widely, privately my knowledge of Russia was limited to crossing it by train from Peking on my way to Paris in 1975. I decided that I must learn something about modern Russia and that the only way was to travel there myself by bicycle.

I have been a regular long-distance cyclist for many years in many countries, so that was not so unusual. What was unusual is that it was seven years ago, when I was 67. As I looked at my maps, I could see that the distances between towns became greater as one traveled east. As it turned out that year, my first year, my longest day north from Pskov, just over the border from Latvia, was 167 kilometres with a loaded bike.

For those senators with an interest in the complex relationship between Russia and Ukraine, Pskov, an important city, was founded 1,100 years ago, and near the banks of the Velikaya River and the ancient Kremlin is a small shrine to the birthplace of Saint Olga of Kiev, who was born in Pskov.

For those senators who like to eat, I recommend the Cafe Kaleidoscope where I ate a wonderful dinner, if you like boletus mushrooms with pickerel, excellent white wine from the Caucasus and Pushkin vodka. I always go local, and Pushkin was from near Pskov.

I could not believe it myself when I calculated my 167 kilometres, and naturally celebrated that evening with an Estonian metal pipe salesman and a litre of local vodka in a small bar-café owned by Latvian-Russians who had to leave Riga because they could not speak Latvian. It was in the town of Slantsy. I had never heard of the town before and was directed there by two men who reminded me of Buster Keaton in their old-fashioned leather helmets riding an old Slawa motorcycle with a sidecar that kept breaking down.

The practically deserted road ran through forests that at one point were filled with mushroom pickers carrying pails and looking down, and occasionally waving to me. The Slawa and I kept passing each other as they stopped for repairs, and we took to laughing as to who was going faster. I knew nothing about mushrooms and later that year joined the Toronto Mycological Society to learn about what I had seen in Baltic Russia.

Of course, the country was flat and there was no wind, or I never would have made it, but I learned how few services there were in Russia, only seven years ago. There was no hotel in Slantsy, a sizable town with European hornbeam instead of the more usual plane or beech growing elegantly in the town square.

When one enters Russia from Latvia to travel to St. Petersburg, one goes north, not east. St. Petersburg is at latitude 60, the same latitude as the border between our Canadian provinces and the Northwest Territories. Hornbeam is a deciduous tree that grows very far north and is common in northern Russian towns.

One of those ubiquitous ugly-from-the-outside, grey plaster, Soviet-era apartment buildings had one floor with rooms to rent to travellers, which is where I met the Estonian. What looked awful from the outside was quite cosy on the third floor, and the staff could not have been friendlier. The trick was in finding the place. I went 167 kilometres because there was no place to sleep between Pskov and Slantsy.

Of course, I had many adventures and the next year I cycled the 650 kilometres between St. Petersburg and Moscow. There were precisely two motels along the way, and it is the main highway between the two largest cities in Russia.

There were some cars, not a lot, but many transport trucks. That is where I saw my first licence plate from Kazakhstan.

I found places to sleep, but it was difficult. Not far out of St. Petersburg, I got stuck and paid 500 rubles to a retired schoolteacher, whom I found cleaning toilets at a roadside restaurant, to sleep in the parlour of her small wooden cottage in the nearby village. Her pension was practically worthless, and the 500 rubles were helpful. While she chatted with another older lady in her tiny garden, I walked around the village, which was very interesting, and which, if I had not been stuck, I would not have seen. Even seven years ago, people who made some money had either bought a cottage or perhaps inherited one and there was a surprising amount of renovation and new construction going on. A river ran through the village and, taking advantage of summer, young people were splashing and diving from the mud banks.

I walked into the nearby forest and the insects, which were unfamiliar, were even larger and more voracious than in Canada, but for some reason they did not come into the village.

Honourable senators, let me take a moment to talk about property rights in Russia. The World Factbook says that the protection of property rights is still weak. The Economist, in an article on March 11, 2010 — which even managed to dredge up Stalin who has been dead since 1953 — said that it is a "country with weak property rights."

Of course, I do not know about the whole country — it is pretty big — but six years ago, in that village I saw a lot of log and wooden buildings being erected. Our committee, when we travelled in November, saw thousands of new apartments. It is hard to believe that the village buildings or the huge apartment developments would be built if land title was very much in dispute.

It just happens that a close friend of mine who lives outside Russia, who is not a Russian citizen but was born in St. Petersburg, inherited an apartment in St. Petersburg about the time I started my investigations. My friend, in order to avoid the complicated transfer, was inclined to sell for a few thousand dollars. I said: "Whatever you do, do not sell. Go there; sit there; deal with it."

My friend took my advice and is much richer for it. It was complicated — with copies of this and copies of that needed — but my friend has title and rents the place out for a tidy sum.

As I have pointed out, six and seven years ago, infrastructure was not great, but it was being improved. It depended on the town and the oblast, or county. I visited a lot of towns in a total of 10 oblasts and one autonomous republic. Critics, for reasons hard to follow, say: "Oh, yes, Moscow. But outside of Moscow, things are terrible." That is simply untrue.

The year after I made Moscow, I cycled the Golden Ring, 600 kilometres of ancient towns and churches up to the Volga and around to Vladimir on the main Volga Highway. I had never heard of the Golden Ring before finding a Russian travel book written in English in a bookstore in St. Petersburg. I never saw so many churches being refurbished. That year, I used the most recent Lonely Planet guidebook, which was completely out of date although it was less than one year old. It was hard on my nerves. I never knew what to expect. After the previous year's problems about where to sleep, I was always worried, but the changes in three seasons were amazing. Of course, I did not know that and, on a bicycle, where to sleep is more important, obviously, than in a car.

In one small town, there were three new hotels where there had been none 12 months previously and, of course, there were busy town centres and new buildings going up everywhere. In an industrial town named Ivanovo that, at first glance, looked rather gloomy, poking around I found a camera store in a new six- or seven-storey commercial building where they sold more up-to-date electronic cameras than I had been able to buy in Toronto. From Ivanovo to the next town, 60 or 70 kilometres further on, the highway had been newly repaired and paved.

I am not a lobbyist for Russia. I work in the Canadian interest. I paid every penny of my Russia travels myself, but I do not think it is in the Canadian interest to have other people's interests and propaganda presented as fact. Mr. Tye Burt, president and CEO of Toronto-based Kinross Gold Corporation, Canada's largest single investor, wrote in The Globe and Mail:

. . . the Western media has tended to focus unduly on business failures in Russia rather than on success stories. This, in turn, has fed the perception of a corrupt and unworkable system.

In an article last Friday, Mr. Burt quoted from the committee's most recent report:

. . . the negative experiences are only part of the story and do a great disservice in scaring away a greater number of trade and investment initiatives that might lead to systemic reforms. . .

Here are some statistics: From 2000 to 2009, Canada's total trade with Russia increased by more than 357 per cent, or an average annually of over 22 per cent, and increased by an average of 23.17 per cent annually as a percentage of total Canadian trade.

During the same period, Canada's exports to Russia grew by an average of 22.5 per cent annually and increased by an average of 22.57 per cent annually as a percentage of total Canadian exports.

Also, between 2000 and 2009, Canadian imports from Russia grew by 27 per cent per year and increased by an average of over 27 per cent annually as a percentage of total Canadian trade.

Russian-Canadian trade is growing, but it is small in the context of the United States or China. However, we know that Bombardier is interested in the upgrade of the Russian railway system, and we know about the attempt by Magna International to buy Opel and open up in Russia. The Canadian business press did not seem to understand the importance of Magna's Russian partner, Sberbank, the Russian national bank run by Herman Greff, the highly regarded former Minister of Industry.

Russian-Canadian trade is not small, if one is a Canadian beef producer in Alberta or a pork producer. Canadian beef producers have been devastated by U.S. non-tariff barriers. They are eager for the Canada-EU free trade agreement supported by our committee since the 1990s. We met a large Alberta delegation in Moscow that concluded an important agreement for beef exports. I am certain that our committee's presence was useful.

I learned on my bike riding that on weekends Russians love shish kebob. One always knows it is Thursday from the smoke of barbecues starting up in roadside gas stations and restaurants. Normally, shish kebab is made with lamb. It comes from the Caucasus and from central Asia, but not in Russia. In Russia, they eat pork shish kebab, and the country has been an important market for our hard up pork producers.

Last August, I cycled for a few hundred kilometres along the middle Volga and took the train from Nizhny Novgorod to Kazan, the capital of Tatarstan. The service situation was day and night compared to seven years ago — not everywhere, but at times it was difficult to believe that the Soviet gloom ever existed.

What Russians have achieved is truly amazing. Often European Russian cities turn the main street into a pedestrian mall. The one in Nizhny Novgorod is very elegant with shops and restaurants and leads to the quite spectacular view from the Kremlin on the high bluff where the Oka River meets the Volga.

Kazan is a UNESCO world heritage site, where about half the population is Muslim and the other half is Orthodox. Their Kremlin also looks over the Volga where it turns south towards the rich agricultural lands, which were settled by Germans under Catherine the Great and who were mostly removed by Stalin.

Side by side, in the Kazan Kremlin, stand the Annunciation Cathedral and the huge, new, and I thought quite elegant, Kul Sharif mosque. The cathedral was built to commemorate the Ivan the Terrible's defeat of the Tatars. The mosque, completed in 2005, is named after Kul Sharif, the imam who died defending the city against Ivan the Terrible. The mosque is bigger than the cathedral.

There are two particularly interesting sites in Kazan. Across a sort of lake in the midst of thousands of new apartments is a small log mosque. It seems to be new, and I stood across the street and watched worshipers going and coming. I thought it was very neat. In my many years in Muslim countries, I have never seen a log mosque, and it is perfectly made.

To understand the other sight, it helps if you read the Cyrillic alphabet. Near the MacDonald's, owned by George Cohen in Toronto, in the pedestrian mall, is a large statute of a man dressed in modern clothes holding a soft felt hat. The statue stands in front of a new hotel. The name in English is something like "The Kazan Hilton." In Russian, it is the Chaliapin Hotel, and the statute is of Feodor Chaliapin, who apparently started his career, appropriately enough, on the Volga in Kazan. I have fond memories of listening to the great Feodor Chaliapin on old 78s as he sang the Song of the Volga Boatmen. It was pretty amazing to see the statue.

Stalingrad, now called Volgograd, scene of the greatest defensive battle in history, is on the west bank further south, and on the east bank further south lies Kazakhstan. As honourable senators can imagine, one cannot give up what has changed from an investigation to an adventure without seeing Stalingrad and the great Volga delta at Astrakhan. It is indeed a pleasure to walk in the wonderful market in Kazan where you feel central Asia at your fingertips, with its spice smells and mix of Russians, Tatars, Kazakhs, Azeris and other peoples from the lands further to the east.

I still have my bike, but I am 74, and I am looking for a Volga boat.

As my bill is an act respecting Canada-Russia Friendship Day, I would like to mention the standing committee's visit to Khanty-Mansiysk on the Ob River in Northwest Siberia. It is the oil centre.

Our committee visited countries in Africa, where huge oil revenues have been either squandered or stolen. That is not the case in Khanty-Mansiysk. It is an old Cossack town of the usual wooden houses, founded when the Cossacks crossed the Urals at the end of the 18th century. My mother's family were lumber people from the Ottawa Valley and, as a child, I spent a lot of time with my beloved grandfather in Northern Ontario, with people who still knew how to build log buildings. I have much sympathy for Russian log houses. In Khanty-Mansiysk, that old wooden town is surrounded, and the oil money has built a new, modern town with churches and shops and modern apartments. Blue is a favourite colour for the metal roofs to resist the harsh winters. The university opened in 2004 and has 2,000 students. The cultural centre for young actors, musicians, dancers, sculptors and painters, with 1,200 students, is amazing. One of their theatrical groups has performed in New York.

The nearest next town is 600 kilometres away. In winter, the temperature can hit minus 50. A Russian friend of mine, who watches Russian television, phoned me to say that there was a special bulletin out for the citizens of Khanty-Mansiysk last winter not to travel by car to the next town without a cell phone. Apparently, a number of people froze to death when their car broke down.

Russian Senator Gennadiy Dmitrievich Oleynik, senator for the district, accompanied the committee from Moscow, and we all thank him for his time and kindness. He was terrific.

I would like to say a few quick words about Russian demographics. The critics talk about declining Russian population. There is no doubt that population is a big problem for the Russians, as it is for all industrial countries. My own travels have been in European Russia, where most of the 142 million people live, but Russia has vast areas east of the Volga and the Urals, all the way to the Pacific, which have never been heavily populated, and some border on China, with its huge population. That is where the problem is, not in European Russia. The Canadian birth rate is actually lower than the Russian birth rate. The Russian birth rate is 11.11 births per 1,000 persons, and ours is 10.28 per 1,000 persons. We also have huge empty areas, but without 1 billion people next door. That is the real demographic situation.

Honourable senators, I will end my remarks by reading from an article that appeared in The Globe and Mail last Friday, May 21, 2010. This is by Mr. Burt, president and CEO of the Toronto-based Kinross Gold Corporation.

For years, we've heard how our similarities in geography and resource endowment should be the basis for stronger economic relationship between Canada and Russia. Shared issues such as Arctic sovereignty, sustainable development of the North, and global warming strongly underline the case for a more robust engagement between our countries.

Now, a new report by the Canadian Senate Standing Committee on Foreign Affairs and International Trade adds a persuasive and well-researched argument for stepping up Canada's commercial relations with Russia. The report (Canada and Russia: Building on Today's Successes for Tomorrow's Potential) is required reading for any Canadian executive, investor or government official seeking knowledge about doing business in Russia.

With the G8 and G20 summits approaching, it also gives timely advice to our government leaders on how they can advance Canada's commercial agenda in Russia by taking a more prominent and active role in engaging their Russian counterparts.

The senators' report is based on their fact-finding tour of Russia last fall, which included 26 meetings with 40 representatives from the Russian government, Canadian and Russian businesses, international organizations, and others. It sums up many of the key lessons that Canadian companies, such as Kinross Gold, have learned during years of operating in Russia.

Their bottom line — Canada companies "can succeed in Russia cleanly and without reproach" — is a message that needs to be heard by Canada's business and investment community.

The senators' conclusion and their "recipe for success" in Russia, square closely with Kinross's experience. As Canada's largest single investor in Russia, we have learned the critical importance of having a committed local partner; of understanding the mechanics of various Russian government agencies and knowing where decision-making power lies; of clearly demonstrating the benefit that our investment brings to the local population; and, above all, of being patient — and persistent — in pursuing our goals.

The report does not sugar coat the realities of doing business in Russia. It points out the unique challenges of dealing with an evolving bureaucracy combined with a protectionist mindset, and relates examples of Canadian companies that have been stymied in their attempts to break into the Russian market.

In some cases, the problems these companies face have proven intractable, but in others, initial delays and frustrations have eventually been resolved: Inevitably, those who've succeeded point to the importance of taking a long-term perspective, cultivating personal relationships, and understanding that in Russia, government always plays a bigger role in guiding business decisions that it does at home.

The report notes that the Western media has tended to focus unduly on business failures in Russia rather than on success stories. This, in turn, has fed the perception of a corrupt and unworkable system. "The negative experiences are only part of the story and do a great disservice in scaring away a greater number of trade and investment initiatives that might lead to systemic reforms," the senators astutely observe.

The Canadian panel met with a number of Russian officials who discussed anti-corruption efforts under way, as well as new initiatives to encourage foreign investment. Significantly for mining companies and other companies in the extractive sector, the senators heard that legislation governing subsoil extraction would be revisited and changed, based on consultations with foreign businesses in order to attract investment.

For Canadian companies hoping to expand into Russia, the senators offer encouragement, citing opportunities in infrastructure development, agriculture, transportation, timber and paper, natural resources, construction and housing and green technologies.

The report concludes with specific recommendations to the Canadian government based on comments from their Russian hosts. A key recommendation is that senior Canadian federal and provincial representatives have higher profile in Russia. The senators note that governments and other G8 and G20 countries conduct regular high-level visits to Russia, giving companies in those countries decided advantage over Canadians businesses in the Russia market.

The focus of next month's G8 and G20 meetings will be global and multilateral, but they also provide an ideal opportunity for our government to follow the senators' advice and beginning elevating our bilateral engagement with Russia to a new level.

Some Hon. Senators: Hear, hear.

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