Axworthy told The Canadian Press in an interview from Kyiv that world bankers need to step up fast to help the faltering Ukraine confront the belligerence of Russian President Vladimir Putin.
"The IMF and others are kind of treating this like just another loan application," Axworthy said.
"Get off the bucket and quit playing world banker and realize there's a real fundamental issue about the way we're going to govern this world by rule of law," he added.
"We can't let Putin get away with what he's up to."
IMF Managing Director Christine Lagarde said earlier this week she hoped Ukraine's $14 billion to $18 billion aid package would be approved by the end of the month or in early May. Canada has pledged $220 million to the effort.
For the last week, Axworthy has been on a fact-finding mission in Ukraine with the Washington-based National Democratic Institute.
In a report issued Friday, the institute called on the international community to give more support to Ukraine's fledgling government, which faces threats from Russia since it annexed the Crimean Peninsula.
The Ukrainian economy is clearly taking a beating and needs help, Axworthy said.
Russia is also threatening to call Ukraine on billions of dollars of back payments it owes on oil and gas.
Axworthy had high-level meetings with Ukrainian government officials, who are worried about what Putin might do next as Ukraine prepares to hold presidential elections next month.
"Senior officials in the government said to us, 'look we're in a survival mode right now'," Axworthy said.
They characterized the scheduled May 25 presidential election as the turning point for their country's democratic aspirations, he said.
"If it doesn't go well and it gets tarnished or gets sabotaged, Putin wins the game," said Axworthy.
The Ukrainian ambassador to Canada also said last week that his country desperately needs the bailout to stave off crisis.
Vadym Prystaiko said in a speech in Ottawa that Ukraine would have to cut the jobs of more than 20,000 public servants to cope with the economic fallout from Russia's annexation of the Crimean Peninsula.
Canada is well-positioned to offer other assistance to Ukraine, including some public-service expertise to help keep the government running, said Axworthy.
"Canada is highly thought of in the Ukraine and the prime minister's trip here was well received," he said, referring to Prime Minister Stephen Harper's visit to Kyiv last month, the first by a G7 leader.
Axworthy also applauded the Tories for their commitment to send hundreds of election observers to Ukraine for next month's vote. He urged their swift arrival.
He said Russian agents provocateurs are spreading the fantasy that Russians are being persecuted by the Ukrainian majority. Based on his conversations and meetings over the last week, Axworthy said this was all part of a plan that Putin hatched several months ago.
"That's been Putin's strategy all along," he said.
"The constant international observation and periscoping of this is absolutely necessary so that they can offset this game plan."