04/03/2014 06:32 EDT | Updated 06/03/2014 05:59 EDT

Ukraine envoy to Canada stresses need for bailout as Russia pressures on gas

OTTAWA - The Ukrainian ambassador to Canada says his country urgently needs an international financial bailout to stave off a looming crisis.

Vadym Prystaiko said in a speech in Ottawa on Thursday night that his country is being forced to make serious cuts to cope with the economic fallout from Russia's annexation of the Crimean Peninsula.

He says 24,000 public servants will have to be laid off in the coming month ahead of a scheduled presidential election on May 25.

Prystaiko also said the postponement of the satellite launch it had planned with British Columbia's MacDonald, Dettwiler and Associates Ltd. has cost Ukraine $260 million. The company has said it has suspended work on ground infrastructure for its communication satellite program in Ukraine due to the country's political instability.

The Ukraine economy is near collapse and is dependent on a massive international aid package.

Russia ratcheted up the pressure Thursday by threatening to raise the price of its natural gas supply, and calling on Kyiv to pay its outstanding energy bill of about $2.2 billion.

The head of Russia's state-owned gas company Gazprom said Thursday said that it would end previous discounts to Ukraine, which could mean a 70 per cent price increase.

Canada has pledged $220 million toward a plan by the International Monetary Fund for up to $18 billion in loans to Ukraine. Earlier Thursday, U.S. President Barack Obama signed off on $1 billion in U.S. loan guarantees to Ukraine.

"That's the big chunk of money we need to have to avert the immediate crisis," Prystaiko told a gathering of diplomats that included the envoys of Norway, Sweden and Georgia at Ottawa's Carleton University.

Prystaiko said Ukraine, as Russia's biggest gas consumer, needs to find ways to become energy independent, and is talking with Canada and others on ways to achieve that.

"We are putting a lot of hope on shale gas," he said, pointing to the fact that Poland, which shares the same geological structure with Ukraine, is hopeful of finding shale gas deposits.

Canadian companies, he said, could help Ukraine with expertise in that area.

He said the option of shipping liquefied natural gas to Ukraine is also becoming more economically feasible, and that shipments from Canada and U.S. could be possible in the next three years.

Prystaiko said some key details would still need to be worked out, including Turkey allowing the passage of tankers as well as the possible construction of new pipelines.

Prystaiko also said he hoped Canada would send observers to the upcoming presidential ballot.

Canada last sent a large observer force of 500 to Ukraine in 2012 to monitor parliamentary elections, a regular occurrence that dates back to 2004 when former Liberal prime minister John Turner led Canadian election monitors.

Earlier this week, Foreign Affairs Minister John Baird and Prime Minister Stephen Harper indicated that Canada would send observers to the May elections.