Federal Court
Cour fédérale
|
Ottawa, Ontario, August 11, 2026 PRESENT: Madam Justice McDonald |
Date: 20260811 Docket: T-3297-24 Citation: 2026 FC 1048 |
BETWEEN:
VOLGA-DNEPR AIRLINES LLC
Applicant
and
CANADA (MINISTER OF FOREIGN AFFAIRS) AND
THE ATTORNEY GENERAL OF CANADA
Respondents
[1] On this Application, Volga Dnepr Airlines LLC (VDA) seeks judicial review of the Minister of Foreign Affairs’ (Minister) decision, refusing to lift sanctions imposed on them pursuant to the Special Economic Measures (Russia) Regulations, SOR/2014-58 [Russia Regulations]. This Application was heard together with Isaykin v Canada (Minister of Foreign Affairs) and the Attorney General of Canada, 2026 FC 1047 [Isaykin], as both cases arose from
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similar factual and legal circumstances. As many of the same submissions, based on the same record and similar underlying decisions, were made at hearing in relation to both Isaykin and this case, parts of these Reasons largely repeat the findings in Isaykin.
[2] For the following reasons, I am dismissing this Application for judicial review. The Minister has broad discretion under the Russia Regulations, and VDA has not shown that this discretion was exercised erroneously or unreasonably. They also did not demonstrate any procedural fairness issue arising from the contents of the Certified Tribunal Record (CTR) or the materials considered by the Minister.
[3] VDA is a Russian cargo airline, who claims to have refused to carry military cargo since 2018. VDA is a subsidiary of the Volga-Dnepr Group (VDG), a larger conglomerate of Russian airlines. VDG is also subject to Russia Regulations sanctions.
[4] On April 5, 2023, VDA was added to the Sanctions List pursuant to subsection 2(a) of the Russia Regulations, which states:
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2 A person whose name is listed in Schedule 1 is a person in respect of whom the Governor in Council, on the recommendation of the Minister, is satisfied that there are reasonable grounds to believe is (a) a person who has engaged in activities that directly or |
2 Figure sur la liste établie à l’annexe 1 le nom de personnes à l’égard desquelles le gouverneur en conseil est convaincu, sur recommandation du ministre, qu’il existe des motifs raisonnables de croire qu’elles sont l’une des personnes suivantes : |
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indirectly facilitate, support, provide funding for or contribute to a violation or attempted violation of the sovereignty or territorial integrity of Ukraine or that obstruct the work of international organizations in Ukraine; |
a) une personne s’étant livrée à des activités qui, directement ou indirectement, facilitent une violation ou une tentative de violation de la souveraineté ou de l’intégrité territoriale de l’Ukraine ou procurent un soutien ou du financement ou contribuent à une telle violation ou tentative ou qui entravent le travail d’organisations internationales en Ukraine; |
[5] On June 20, 2023, VDA filed a delisting application pursuant to paragraph 8(1)(a) of the Russia Regulations, requesting that they be removed on several grounds, including that they are a “peaceful carrier” who is not involved in the transport of military cargo. VDA’s application also included submissions supporting the delisting of Mr. Aleksey Isaykin, VDA’s former chairman and majority shareholder.
[6] On March 1, 2024, Global Affairs Canada (GAC) replied, outlining the grounds for including VDA on the Sanctions List. This letter included references to open-source online articles relevant to the Minister’s decision and invited VDA to respond.
[7] On August 6, 2024 VDA responded.
[8] To assist the Minister with the delisting request, GAC prepared an internal Memorandum for Action. The Memorandum summarized VDA’s application and attached its June 2023 delisting application and August 2024 reply. It did not include many of the attachments to those materials but summarized their contents.
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[9] In a Decision Letter dated October 29, 2024 (Decision), the Minister declined VDA’s delisting application. The Minister concluded that there were no reasonable grounds to recommend removing VDA from the Sanctions List. Specifically, she found that VDA “benefitted from contracts and subsidies from the Russian government to assist with activities intended to ease or otherwise circumvent the effects of sanctions imposed against Russia by Canada and its partners, and as such that [VDA] have engaged in activities that indirectly facilitate, support or contribute to a violation or attempted violation of the sovereignty or territorial integrity of Ukraine”.
[10] The Minister based this conclusion on open-source evidence that: (1) in April 2022, VDA entered agreements with the Russian government for the purpose of transporting goods between Russian cities and importing goods from countries that had not imposed sanctions on Russia; (2) VDA contracted with Moscow enterprises to transport cargo, and thus restore supply chains interrupted by sanctions; and (3) VDA received subsidies from the Russian government to counteract sanctions and mitigate the effects of sanctions on the Russian economy.
[11] Overall, the Minister found “that by entering into the April 2022 agreement with the Russian government, Volga-Dnepr Airlines facilitated the Russian government’s access to essential goods and services that would otherwise have been restricted by international sanctions”. As such, the Minister declined to delist VDA.
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[12] On this judicial review, VDA argues that the Minister’s Decision was both procedurally unfair and unreasonable.
[13] Procedural fairness issues are considered on a correctness-like standard, where the Court asks “whether the procedure was fair having regard to all of the circumstances” (Canadian Pacific Railway Company v Canada (Attorney General), 2018 FCA 69 at para 54).
[14] Reasonableness requires a decision to have justification, transparency, and intelligibility, be based on an internally coherent and rational chain of analysis, and be justified in relation to the facts and law that constrain the decision maker (Canada (Minister of Citizenship and Immigration) v Vavilov, 2019 SCC 65 at paras 85-86 [Vavilov]).
[15] Before addressing the specific procedural fairness issues raised by VDA, it is helpful to articulate the degree of procedural fairness owed to them in the circumstances. VDA argues that the Minister owes a high degree of procedural fairness, while the Respondent argues that the Minister only owes a low degree of procedural fairness.
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[16] In Isaykin (at paras 17-32), I considered the degree of procedural fairness owed, using the framework and factors provided by the Supreme Court in Baker v Canada (Minister of Citizenship and Immigration), [1999] 2 SCR 817, for delisting applications under section 8 of the Russia Regulations. Given the similarities between this case and Isaykin, my conclusions in Isaykin are equally applicable to this case.
[17] Overall, I found that the procedural fairness requirements were low, noting that similar conclusions were reached regarding similar statutory schema in: Gomez v Canada (Attorney General), 2021 FC 1300 [Gomez], which involved the Justice for Victims of Corrupt Foreign Officials Regulations, SOR/2017-233 made under the Justice for Victims of Corrupt Foreign Officials Act (Sergei Magnitsky Law), SC 2017, c 21; and Deeb v Canada (Attorney General), 2025 FC 1954, which concerned the Special Economic Measures (Haiti) Regulations, SOR/2022-226 made under the Special Economic Measures Act, SC 1992, c 17 [SEMA]. SEMA is the same act under which the Russia Regulations were enacted.
[18] Having noted that only a low degree of procedural fairness was owed, I now turn to VDA’s claims that the Minister breached procedural fairness.
[19] VDA’s primary procedural fairness argument centres on the contents of the CTR. According to VDA, procedural fairness was breached because the Minister did not have their full application before her when she made her Decision.
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[20] In support of their June 20, 2023 delisting application, VDA claims to have submitted 32 documents. However, only 3 of those documents are included in the CTR produced for this Application. The Respondent acknowledges that these documents were not included in the CTR and therefore were not before the Minister. The Respondent however makes the point that the relevant information from these documents was before the Minister in the form of summaries and attachments in the Memorandum for Action. The documents not included in the CTR are:
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[21] VDA asserts that the mere absence of these documents constitutes a breach of procedural fairness. They rely on caselaw for the proposition that a decision is procedurally unfair if it is made without consideration of submitted documents before the decision maker (Akram v Canada (Citizenship and Immigration), 2018 FC 1105 at para 21; Togtokh v Canada (Citizenship and Immigration), 2018 FC 581 at para 16; Vulevic v Canada (Citizenship and Immigration), 2014 FC 872 at para 6; Agatha Jarvis v Canada (Citizenship and Immigration), 2014 FC 405 at paras 18-24).
[22] Those cases are of limited relevance to this case. In each case, the missing relevant documents contradicted the decision maker’s findings and were neither included in the record nor otherwise reflected in it. They do not establish that the absence of documents, by itself, is enough to demonstrate a breach of procedural fairness. The “failure to include documents in the
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CTR will not automatically lead to the quashing of the impugned decision unless the omitted documents were material to the decision” (Yadav v Canada (Citizenship and Immigration), 2010 FC 140 at para 36).
[23] In summary, the omitted documents must be material, contain information not otherwise found in the record, and contradict the Minister’s findings.
[24] Here, the omitted information was summarized in VDA’s delisting application and addressed in the Memorandum for Action, both of which were before the Minister. That was sufficient: the duty of fairness permits officials to collect and summarize facts, provided the designated decision maker makes the final decision (Qin v Canada (Minister of Citizenship and Immigration), 2003 FC 1504 at para 23). It is accepted that ministerial decisions may require officials to review and summarize documents for the decision maker, given “that the volume and complexity of modern decision-making in a regulatory setting such as the present one necessitates resort to many sources, including officials not charged with the responsibility of deciding the matter” (Ayr Motors Express Inc v Canada (Employment Workforce Development and Labour), 2017 FC 514 at para 25).
[25] The absence of documents from the CTR is not, on its own, sufficient to establish a breach of procedural fairness, particularly where the relevant information from those documents was before the Minister in a summarized form. VDA has not identified any errors or misinformation in the summaries that were before the Minister, nor has he demonstrated that the omitted documents contained material information that was not otherwise before the Minister.
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[26] No breach of procedural fairness arises in relation to documents that were not included in the CTR.
[27] VDA also argues that they did not know the case to meet because the Minister relied on information that was not provided to them. VDA emphasizes that the March 1, 2024 letter referred to ten open-source articles, while the Memorandum for Action that the Decision is based on, lists sixteen open sources. Only two of the open sources from the March 1, 2024 letter were included in the Memorandum for Action.
[28] The open-source documents referenced in the March 1, 2024 letter consist of information about:
[29] The open sources cited in the Memorandum for Action include thirteen articles that do not relate to VDA specifically, and three directly related to VDA. The thirteen open sources in the Memorandum for Action concern the Russian economy and sanctions evasion generally.
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These articles are merely context, do not mention VDA, and are irrelevant to the specific grounds for sanctioning VDA.
[30] The March 1, 2024 letter notified VDA that GAC considered circumvention of sanctions as “indirectly support[ing] the violation of the sovereignty or territorial integrity of Ukraine” and that VDA was alleged to engage in such circumvention . VDA thus knew the case to meet, and there is no breach of procedural fairness in the Minister not providing these articles to VDA in the March 1, 2024 letter.
[31] The three open sources that specifically mention VDA include two articles that were provided in the March 1, 2024 letter. These two articles discuss the Russian government (Annex D.01) and the Mayor of Moscow (Annex D.02) entering agreements with VDA to restore supply chains disrupted by Western sanctions. These articles are directly related to the grounds the Minister cited for declining to recommend removing VDA from the Sanctions List, and were provided to VDA in the March 1, 2024 letter.
[32] VDA specifically highlights Annex D.16, which references VDA but was not cited in the March 1, 2024 letter. Annex D.16 stated that civilian cargo airliners, such as VDA, have been known to deliver sanctioned goods. However, this article, and the information within it, were irrelevant to the Minister’s Decision, which was based on VDA’s receipt of subsidies from Russia intended to restore supply chains and circumvent sanctions.
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[33] Any requirement to disclose open-source information on which the Minister’s Decision was based, must be considered against the degree of procedural fairness owed – which I have found is low – and the fact that disclosure requirements in administrative proceedings are lower than other contexts (May v Ferndale Institution, 2005 SCC 82 at paras 91-92). I also note that in Gomez, the Court found that the Minister was not required to disclose all open-source information used in advance of a decision made under a similar statutory scheme (Gomez at para 125, citing Azizian v Canada (Citizenship and Immigration), 2017 FC 379 at para 29, and Mancia v Canada (Minister of Citizenship and Immigration), [1998] 3 FC 461).
[34] Fundamentally, “[w]hat matters is whether the applicant had sufficient knowledge of the information relied upon, and an opportunity to meaningfully participate in the decision-making process” (AB v Canada (Citizenship and Immigration), 2020 FC 461 at para 31).
[35] The March 2024 letter, and the linked open-source articles, constituted sufficient notice to VDA of the case to meet. There is no breach of procedural fairness merely because the Memorandum of Action annexed articles that were irrelevant to the grounds for including VDA on the Sanctions List.
[36] VDA has failed to specify any “new” information used in the Decision that was not provided in the open sources listed in the March 2024 letter. The only example highlighted was Annex D.16, discussing VDA delivering sanctioned goods. However, since the March 1, 2024 letter advised that the Minister believed that VDA was involved with the transport of goods to
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circumvent sanctions and included a link to a different open-source article, this was sufficient to put VDA on notice of the case to meet and the type of information the Minister would rely upon.
[37] Overall, I find VDA had sufficient information on the case to meet and there was no breach of procedural fairness.
[38] Finally, VDA argues that the Minister raised novel considerations in the Decision that were not raised in the March 2024 letter. They point to part of the Decision which states:
The activities that Volga-Dnepr Airlines has engaged in correspond precisely to the evasion typologies identified by the Royal United Services Institute, the Russian Elites, Proxies, and Oligarchs Task Force, the “Export Enforcement Five” and the G7 Sub-Working Group on Export Control Enforcement.
[39] This statement in the Decision merely affirms that the conduct, which was the basis of the Minister’s Decision, corresponds with patterns associated with sanctions evasion identified by various organizations. It was not itself a novel ground for refusing the delisting application.
[40] The other “novel” consideration which VDA says the Minister references is the transfer of Mr. Isaykin’s ownership of VDA in August 2022, shortly after the imposition of sanctions. This consideration however is merely a supplementary point to the Minister’s primary reason for declining VDA’s application, which is that he owned and controlled VDA when it engaged in conduct to assist the Russian government in evading sanctions in April 2022.
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[41] In conclusion, VDA has not identified any breach of procedural fairness.
[42] VDA challenges the reasonableness of the Decision on several grounds.
[43] In assessing reasonableness, the Supreme Court noted in Vavilov (at para 90) that “what is reasonable in a given situation will always depend on the constraints imposed by the legal and factual context of the particular decision under review”.
[44] The legal constraints on the Minister under the Russia Regulations were addressed in Makarov v Canada (Foreign Affairs), 2024 FC 1234 at para 69 (aff’d 2025 FCA 223) [Makarov], where the Court stated that, given the nature and purpose of the decision and the Minister’s role at the apex of Canadian decision-making, “the Minister is entitled to the widest deference in weighing and assessing the record and making the Decision in this case”. Accordingly, although “the issue [in] this case is justiciable, the bar the Applicant must overcome to succeed is exceedingly high” (Makarov at para 85).
[45] VDA argues that the Minister ignored several of their arguments, which are:
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[46] In my view, these arguments are not relevant to the Minister’s grounds for refusing their application. The Minister found that VDA “benefitted from contracts and subsidies from the Russian government to assist with activities intended to ease or otherwise circumvent the effects of sanctions imposed against Russia by Canada and its partners, and as such that [VDA] have engaged in activities that indirectly facilitate, support or contribute to a violation or attempted violation of the sovereignty or territorial integrity of Ukraine”.
[47] The fact that VDA is not owned by the Russian government, has no influence in Russian politics, and has not provided services for Russia’s military, amongst VDA’s other arguments, does not undermine the Minister’s findings. The Minister’s grounds for declining to recommend removal was the activities that “indirectly facilitate, support or contribute” to Russia’s invasion of Ukraine. Accordingly, the Minister was not required to address these arguments in the Decision since they were irrelevant to the grounds for her Decision.
[48] VDA also argues that the Minister failed to grapple with their legal arguments that placing them on the Sanctions List was ultra vires the Russia Regulations and a violation of
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international law. They argue that placing them on the Sanctions List is ultra vires the Russia Regulations because it does not contribute to the objectives of the Russia Regulations or SEMA. VDA also argued that sanctioning them violates international law because they are not responsible for, or contributed to, Russia’s unlawful invasion. According to VDA, Canada’s sanctions have no connection to pressuring Russia to cease its illegal conduct.
[49] The Minister addresses this issue in the Decision as follows:
Canada’s sanctions against Russia were imposed in response to Russia’s grave human rights violations and unlawful contravention of the sovereignty and territorial integrity of Ukraine and aim to apply pressure on the Russian regime and to impose costs on Russia to limit Russia’s ability to fund its war in Ukraine. Circumvention of these sanctions indirectly supports the violation of the sovereignty or territorial integrity of Ukraine. Global Affairs Canada assesses that Volga-Dnepr Airlines, as Russia’s largest air cargo carrier company, has played a critical role in supporting the efforts of the Russian regime to bypass sanctions imposed by Canada and its allies to obtain goods that are sanctioned or can be used in sensitive or military related sectors, and thereby supporting and facilitating Russia’s continued aggression against Ukraine.
[50] This is directly responsive to VDA’s claim that including them on the Russia Regulations is ultra vires. It also indirectly addresses their arguments that placing them on the Sanctions List violates international law, because it ties their conduct with Russia’s continued unlawful invasion.
[51] Overall, recognizing the wide deference held by the Minister on these decisions, and being satisfied that the Minister exercised that discretion reasonably, there is no basis for this Court to intervene in the Decision.
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[52] I am dismissing this judicial review application, as VDA has not demonstrated the Decision was unreasonable or lacked procedural fairness.
[53] The parties agreed that the successful party would be awarded costs of $6,000.00.
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JUDGMENT IN T-3297-24
THIS COURT'S JUDGMENT is that:
"Ann Marie McDonald"
Judge
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FEDERAL COURT
SOLICITORS OF RECORD
| DOCKET: | T-3297-24 |
| STYLE OF CAUSE: | VOLGA-DNEPR AIRLINES LLC V CANADA (MINISTER OF FOREIGN AFFAIRS) ET AL |
| PLACE OF HEARING: | OTTAWA, ONTARIO |
| DATE OF HEARING: | APRIL 29 AND 30, 2026 |
| JUDGMENT AND REASONS: | MCDONALD J. |
| DATED: | AUGUST 11, 2026 |
APPEARANCES:
| Vincent DeRose Jennifer Radford Michelle Folinas |
FOR THE APPLICANT |
| Marilyn Venney Margaret Cormack |
FOR THE RESPONDENTS |
SOLICITORS OF RECORD:
| TEREPOSKY & DEROSE LLP Ottawa, Ontario |
FOR THE APPLICANT |
| Attorney General of Canada Toronto, Ontario |
FOR THE RESPONDENTS |