In the House of Commons during question period, Prime Minister Stephen Harper said, "Canada will contribute observers to an important military observer mission in a co-ordinated effort to better monitor the Russian military mission in Crimea."
Two Canadians will be part of the Organization for Security and Co-operation in Europe mission.
The pair are already in Europe and are on their way to Ukraine. On Tuesday, U.S. Secretary of State John Kerry called on Russia to allow observers and said the U.S. wants to see large numbers of them in Crimea.
In response to a question from Opposition Leader Tom Mulcair, Harper said he has told the prosecutor-general of Ukraine that Canada will be imposing economic sanctions on members of the ousted regime of former president Victor Yanukoych. That will include the freezing of assets held in Canada of corrupt Ukrainian officials.
The government will also be suspending Canada's participation in the Canada-Russia Intergovernmental Economic Commission, established to promote economic relations between Canada and Russia.
Harper went on to say talks are taking place with the International Monetary Fund and Canada is "prepared to collaborate with them."
Harper did not mention whether Canada will be offering financial aid to Ukraine. On Tuesday, Kerry announced that the U.S. will provide $1 billion in loan guarantees to Ukraine, and today the European Union pledged $15 billion if Ukraine is able to work with the IMF.
Harper's office issued a statement Wednesday saying the prime minister had spoken to Donald Tusk, prime minister of Poland, whose country borders Ukraine. The two two leaders agreed on the importance of respecting Ukraine’s territorial integrity and that any violation of Ukraine’s sovereignty is unacceptable, the statement said.