Ukraine needs to carry out deep structural reforms and develop a clear defence policy before it goes on a shopping spree for sophisticated Western and Canadian military equipment, says Defence Minister Harjit Sajjan.

The issue of Canadian-Ukrainian military and defence industry cooperation was on the agenda for Prime Minister Justin Trudeau's talks with Ukrainian President Volodymyr Zelenskiy when the two leaders met on the sidelines of the Ukraine Reform Conference in Toronto last week.

Speaking to reporters after their first meeting, Zelenskiy said Ukraine is particularly interested in acquiring Canadian armoured vehicles.

Canada will continue "to stand with Ukraine against Russian interference and aggression," Trudeau said, adding that he and Zelenskiy discussed Canada's mission in Ukraine to train the Ukrainian military as well as the sale of lethal weapons to Kyiv.

Prime Minister Justin Trudeau meets with Ukraine’s President Volodymyr Zelensky during a bilateral meeting of the Ukraine Reform Conference in Toronto on July 2, 2019. (Chris Helgren/Reuters)

Trudeau said, without offering details, that a Canadian company has invested in an ammunition factory in Ukraine already.

But Sajjan told Radio Canada International that before Ukraine and Canada can deepen their defence cooperation further, Ukraine needs to figure out what kind of a military it wants.

Instead of focusing on immediate equipment needs, the Ukrainian government needs to invest its efforts in building its defence institutions, he said.

"I've been there and seen other nations' donated equipment, but they're sitting in sea containers," Sajjan said. "If you go and have chunks of this and that, it doesn't really work very well. What we're trying to do while we're there is helping them to come up with the appropriate plan."

Michael Carpenter is managing director of the Penn Biden Center for Diplomacy and Global Engagement and a former high-ranking Pentagon official with responsibility for Russia, Ukraine and Eurasia. He said Sajjan's approach is "absolutely right" — that Ukraine needs to get serious about deep structural reforms to its defence institutions.

'Soviet logic'

The Obama administration expended a lot of effort on helping Ukraine develop a roadmap for defence reform, he said. The result was a document called the Strategic Defence Bulletin.

"It's a very comprehensive plan to make Ukraine's military more capable and more NATO-interoperable," he said. "But the real problem with that roadmap was that there was a lot of resistance amongst the senior members of the General Staff, who operated according to a much more Soviet logic."

Carpenter said he hopes the new government will work to move aside those old Soviet-trained cadres and promote bright, Western-educated officers who genuinely want to pursue reforms.

Canadian soldiers march along Khreshchatyk Street during a military parade to celebrate Independence Day in Kyiv, Ukraine, Friday, Aug. 24, 2018. (Efrem Lukatsky/The Associated Press)

Once the new Ukrainian government is formed following parliamentary elections on July 21, it will decide what the military's mission should be and what kind of equipment it needs to carry it out, Sajjan said.

"And then from that we can look at progressing some of these conversations forward, but what we have done here is making sure that we are ready to be able to support the plan that they will create," he said.

Having placed Ukraine on its list of countries permitted to buy Canadian military equipment and weapons, and having signed a defence cooperation agreement with Kyiv, Ottawa already has created the legal foundation for eventual arms sales or defence technology transfers, Sajjan said.

A major weapons-maker

After the collapse of the Soviet Union, Ukraine inherited a vast military industrial complex capable of producing everything from tanks and armoured vehicles to aircraft and ballistic missiles.

According to the Stockholm International Peace Research Institute, in 2018 Ukraine ranked as the world's 12th largest arms exporter — well ahead of Canada, which ranked 23rd.

But without sustained investment in research and development, Ukraine's defence industry has fallen behind both Western nations and the Russian military industrial complex with which it was closely intertwined prior to the 2014 crisis and Russian military intervention in Eastern Ukraine.

"The Russian military has modernized and reformed, especially over the last ten years, rather prodigiously and prolifically," Carpenter said.

To defend itself, Ukraine needs capabilities that can match Russia's sophisticated new weaponry, he said.

"For certain types of military equipment, like anti-tank weapons, like air defence systems, they really need to purchase or receive those systems from Western partners."

A corruption problem

Defence cooperation with Canada could give the once-neglected Ukrainian defence industry access to state-of-the-art Canadian and Western technology — particularly modern communications tech and electronics, night vision equipment, precision-guided munitions and target identification and acquisition systems.

But Western companies are leery of investing in Ukraine because of a business climate rife with corruption and its opaque defence industry — dominated by the giant quasi-state company Ukroboronprom, which is made up of over 130 separate entities and employs more than 80,000 people, Carpenter said.

This has been the main obstacle to Western defence companies setting up shop in Ukraine, he added: until Ukroboronprom is thoroughly reformed, there is little chance of substantial Western investment in the Ukrainian defence industry.

So far, only a few small- and medium-sized Western arms manufacturers have shown an interest in investing in Ukraine's defence industry.

Colt Canada eyes the market

Colt Canada — an Ontario-based arms manufacturer and a subsidiary of the U.S.-owned Colt's Manufacturing LLC — supplies the Canadian military and several police forces with small arms (assault rifles, machine guns and carbines); it's one of the companies seriously looking at investing in Ukraine.

Alex Payne, vice president of programs at Colt Canada, said the company has been in talks with Ukrainian officials for almost two years now.

"The end goal at this point in time is to cooperate with the Ukrainian government in order to support their establishment of a centre of small arms," Payne said. "Their facility is going to be autonomous to them, that's the ultimate goal. They will own it, they will manage it."

Colt Canada will provide Ukraine with guidance on how to create a manufacturing operation that fits Western standards, he said.

"Discussions have really been based on how do we achieve that. We have laid all that out, including all of the business standards, all the ethical standards and all the quality standards, and all those things that would make it in tune with Colt Canada."

But the Kitchener-based company, which produces C7 rifles and C8 carbines under licence from Colt Defense LLC, has to overcome several regulatory hurdles in Canada and the U.S. before it can transfer any technology or know-how to Ukraine, Payne said.

Weapons sales would make things worse, Russia claims

Colt Canada has been able to get some minor clearances to run demonstrations in Ukraine, but setting up production and transferring technology would require much more thorough regulatory scrutiny by both U.S. and Canadian governments, he said.

The Russian embassy in Canada, meanwhile, said Canadian weapons sales to Ukraine would only add "fuel" to the fire in Eastern Ukraine.

"Instead of pressuring Ukrainian authorities to fully implement the Minsk Agreements, starting from immediate cease-fire, Canada continues to provide military equipment and training, adding fuel to the ongoing intra-Ukrainian civil war," said a statement by the Russian embassy.

The only way Ottawa can really contribute is by facilitating direct dialogue between Kyiv and Donbas, sharing Canadian experience in guaranteeing equal language rights and federalism, the statement added.