Canada contributing $5 billion to new G7 deal being finalized to help Ukraine using frozen Russian assets

Canada has agreed to contribute $5 billion to a new plan to provide a major loan to help Ukraine in its fight against Russia.

Prime Minister Justin Trudeau and the other world leaders attending the G7 summit in Italyhave struck anew deal to use frozen Russian assets to help Ukrainian President Volodymyr Zelenskyy after Russian gains on the battlefield.

Trudeau met one-on-one withZelenskyyat the summit and said Canada was the first country to announce its contribution to the agreement.

Zelenskyy said the idea to use these assets has been on the table since the start of the war and Canada was first to move on it.

"Thank you for your loud voice," Zelenskyy told Trudeau. "It will help Ukraine, not only on the battlefield [but] also in reconstruction."

The U.S.-led plan involvesusingthe interest generated fromroughly 200 billion euros in frozen Russian assets, mostly heldin Europe, to secure a $50 billion USbank loan for Ukraine. Countries are expected to get that money back.

Biden said theplan will"put that money to work for Ukraine and send another reminder to [Russian President Vladimir] Putin that we're not backing down."

WATCH |Conflictsin Ukraine and Gaza loomover G7 summit in Italy:

Conflicts looms over G7 summit in Italy

3 months ago

Duration 1:57

Prime Minister Justin Trudeau is in Italy for this year's G7 summit. The wars in Ukraine and Gaza, climate change and many other divisions loom over the meeting, which includes leaders from the European Union and Pope Francis.

Cynthia Termorshuizen, Canada's sherpa overseeing negotiations and helping draft the G7's final communique, said everyone around the table agrees Russia "is causing damage and they need to pay."

"There was a lot of conversations and Canada was one of the very early players to talk about how we could design this to make this feasible," she said.

The loan is to be delivered by the end of the year and will gotowardmilitary aid, humanitariansupport and reconstruction efforts in Ukraine.

Russia's foreign ministry immediately fired back, calling the loan planan illegal initiative and warningretaliatory measures will be extremely painful.

The G7 deal comes at a time when Ukraineis in dire need of more weapons, ammunition and training after a long lull in deliveries fromWashington. U.S. Congress approved a $61 billion US military aid package for Ukraine last month, but only after political conflict within the Republican Party delayed the package for six months.

Defence Minister Bill Blair met withthe UkraineDefence Contact Group in Belgiumon Thursday and announced plans to send the first shipment of 2,000 decommissioned rocket motors used by the Royal Canadian Air Force to Ukraine.

Canada will also donate close to 30 Nanuk remote weapons systems, which is a remotely controlled weapons station that can be used on armoured vehicles. Blair also said the government is sending more than 130,000 rounds of small arms ammunition to Ukrainian troops.

Canada has also announced sanctions against 11 people and 16 entities connected to Russia's "military-industrial complex," the Prime Minister's Office said in a news release Thursday. Theyinclude entities involved in circumventing sanctions on Russian oil.

Trudeau took part in a seriesof working sessions on Thursday with G7 leaders about the conflicts in Ukraine and Gaza, along with development in Africa and climate change.

He alsohad bilateral meetings with French President Emmanuel Macron and German Chancellor Olaf Scholz.