Baird told a news conference in Montreal that Canada will not recognize Russia's move to annex Crimea or the treaty signed by Vladimir Putin to make it official.
"We have seen President Putin take another step — another step down the wrong path," he added.
"Canada stands solely with those seeking a peaceful and prosperous Ukraine," Baird said. "We stand resolutely against those who use Soviet-style tactics to intimidate, occupy and annex democratic neighbours."
The foreign affairs minister also announced that 17 Ukrainian and Russian officials have been added to a list of those who have had their assets frozen and will face travel bans.
Baird noted that Russia had a chance to respond Tuesday by withdrawing troops to their bases, but instead there have been reports of violence and the death of a Ukrainian soldier.
"We've been promised tolerance in Crimea by its occupying power but have instead seen the wounds of torture on the body of an innocent, murdered Crimean tartar," Baird said. "This is entirely unacceptable and we condemn it in the strongest of terms."
He said Russia is facing a very clear choice — engage in discussions and diplomacy with the international community or continue to face sanctions targeting those closest to Putin.
Baird said the measures announced Tuesday consist of travel bans and specific economic sanctions against 17 individuals.
"We won't hesitate to expand that list if and when we think it's appropriate," Baird said.
Asked if the sanctions are severe enough, Baird said Canada is prepared to go further.
"I don't think anything is severe enough when a ruler in the Kremlin tries to re-draw the borders of Europe in the post-Cold War era," Baird said.
Prime Minister Stephen Harper is expected to visit Ukraine briefly at the end of this week during a European trip.
Canada does not recognize the outcome of the referendum on Sunday where 97 per cent reportedly voted to secede from Ukraine.
Harper said this week the results are illegitimate and the vote was conducted under an illegal Russian military occupation.
Baird said Canada still hopes reason will prevail and a diplomatic solution can emerge.
But he would not rule out cutting diplomatic relations with Russia.
"Our goal is that the government in Moscow at the Kremlin takes another route. That's our goal, but we'll see day-by-day."
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