The changes include an end to a broad ban on financial services, imports and exports.
Dion said he wants to re-open a dialogue with Iran, which effectively ended in 2012 when the Harper government severed relations, closed Canada's embassy in Tehran and expelled Iranian diplomats.
Foreign Affairs Minister Stephane Dion speaks in the House of Commons on Friday. (Photo: Sean Kilpatrick/CP)
The easing of sanctions reflects Iran's compliance with an international agreement to curtail its nuclear research programs, he added.
The changes do not mean a wide-open market, as some exports — including nuclear goods and technologies, as well as goods and services that could assist in the development of ballistic missiles — will still be restricted.
Dion says the government will keep an eye on exports to Iran, with all applications for export permits to be vetted on a case-by-case basis.
Canada will also maintain a revised list of individuals and entities tied to missile research, and transactions with such individuals and entities will still be prohibited.
"We'll engage with Iran step-by-step, open eyes, because we still have a lot of concerns."
Dion says Iran remains a country of concern, but characterizes the Conservative decision to cut off communications entirely as wrong-headed.
"Canada today lifted some sanctions against Iran in conformity with the agreement concluded by other countries and Iran," Dion said.
"We do it in conformity with the United Nations. We'll keep sanctions to ensure the proliferation of nuclear will not happen in Iran, the same with ballistic missiles."
He said the government remains cautious.
"We'll engage with Iran step-by-step, open eyes, because we still have a lot of concerns about the role of Iran in the region, including for our allies like Israel and also the record of Iran on human rights is very questionable, to say the least."
Tories oppose move, NDP lauds step
The Conservative Opposition has strongly opposed easing the sanctions, saying Iran still sponsors terrorism, is deeply involved in the Syrian civil war and remains a threat to Israel.
Foreign affairs critic Tony Clement said Iran still sponsors terrorism and remains a threat to Israel.
"Conservatives remain skeptical over Iran's intentions," said Clement, who was in Halifax on Friday for the provincial Conservative party's annual general meeting.
"They continue to be a state sponsor of terror. They are supporting terrorist organizations like Hamas and Hezbollah, who are taking innocent lives in the region and around the world."
Restoring diplomatic relations with Iran sends the wrong message, he added.
"We want to judge Iran by their actions, not by their words. While it is important to reduce the nuclear threat, there are all these others threats that Iran is involved in that are antithetical to our interests as Canadians as well as people who want peace and non-violence in the world."
Helene Laverdiere, the NDP's foreign affairs critic, welcomed the announcement.
"We have to remain very vigilant regarding Iran, but Iran has complied with the steps required by the UN and all our allies have lifted some of the sanctions," she said.
"I think it's the right step."
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