The Canada Pension Plan Investment Board’s investment in a grain exporter may be used as a propaganda tool by the Russian government, according to J. Paul Goode, McMillan chair in Russian studies at the Institute of European, Russian and Eurasian Studies at Carleton University.

“If a company as important as Viterra is to the Canada Pension Plan does business with Russia, it has the potential to undercut the Canadian government’s stance,” he says.

Viterra Inc., a Canadian grain delivery business in which the CPPIB has a 39.9 per cent stake, is the fourth-largest exporter of Russian grain. The British Columbia Investment Management Corp. also holds a 9.9 per cent stake in the business.

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“[The CPPIB’s continued joint ownership in Viterra] plays to a common theme in Russian propaganda — that the West is willing to make money off Russia but not to give it recognition as a global power,” says Goode. “That could be amplified by pro-invasion voices in and outside of Russia.”

The economic impact of Viterra’s exports are an important domestic moral booster for the general public and for business and political leaders, he adds. “Wheat exports are important in terms of domestic politics. For the general public, it’s important for employment and it shows that, despite the war, Russia remains in business. Arguably, for the elites, it shows that Russia can continue to do what it’s doing and wring additional concessions out of Western countries.”

However, the economic benefits may be insignificant for the Russian government. “In practical terms, however, it’s hard to say there’s a huge economic benefit,” says Goode. “The ruble is grossly overvalued due to moves made in response to sanctions by Russia’s central bank. As a result, exports are increasingly costly.”

Despite these concerns, Goode also notes the continued exportation of Russian grain may be necessary in order to prevent a very different catastrophe from occurring. From February to July, the conflict disrupted exports from both Ukraine and Russia, causing grain prices to rise more than 30 per cent. According to the United Nations, the shortfall was felt most in the poorest regions of the world, with prices rising 187 per cent in Sudan, 86 per cent in Syria and 60 per cent in Yemen.

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In July, four weeks after Russian targeted Viterra’s terminal at a Ukrainian port on the Black Sea, the international body took action, proposing a deal to restore regular shipping activities of Ukrainian and Russian grain exports. Representatives of both nations agreed to its terms.

“Today, there is a beacon on the Black Sea,” said UN secretary general Antonio Guterres, in a press release at the time. “A beacon of hope. A beacon of possibility. A beacon of relief in a world that needs it more than ever.”

Goode points to the potential for a humanitarian catastrophe in Africa, noting the UN wouldn’t have conceded on agricultural exports otherwise. The international body’s ability to respond to the crisis in other ways wasn’t particularly strong, he adds, due to Russia’s veto powers afforded by its permanent seat on the UN security council.

“Also, a large number of member states are very concerned about feeding their people. . . . A lot of the attention of the West is focused on Ukraine. But for the people most impacted by food prices, particularly in Africa and Asia, they care little about the conflict.”

The CPPIB declined to comment.

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