General Dynamics estimates 3,000 jobs hinge on contract
OTTAWA — Canada’s recently elected Liberal Party government will review the approval process for defense exports but is standing behind a General Dynamics deal to sell Saudi Arabia billions of dollars of light armored vehicles.
Saudi Arabia’s recent execution of 47 people and other human rights concerns has prompted protests and calls in Canada for Prime Minister Justin Trudeau to cancel a CDN $14.8 billion (US $10.3 billion) contract to sell armored vehicles to the Middle East country.
The contact, announced in February, was approved by and received financial guarantees from the previous Conservative Party government. It was criticized by some Liberal Party members, including one of Trudeau’s key advisers. Last year, Trudeau downplayed the contract, claiming it was for “jeeps.”
But now in power, the Liberal Party government says the deal is too important to Canada and its defense industry to tamper with. “We'll review the process by which these contracts are assessed in the future,” said Foreign Minister Stephane Dion. “But what is done is done and the contract is not something that we'll revisit.”
The deal would see General Dynamics Land Systems - Canada of London, Ont., sell an undisclosed number of light armored vehicles to Saudi Arabia in what has been called the largest export contract in Canadian history. The arrangement has largely been shrouded in secrecy with the Saudis not even acknowledging they are purchasing the Canadian-built light armored vehicles, or LAVs.
Doug Wilson-Hodge , manager of corporate affairs for General Dynamics Land Systems – Canada, said the contract prevents the firm from discussing the specific types and numbers of vehicles to be built or the delivery schedule. “What I can tell you is that we are currently in the design and material procurement phase,” he said.
That phase involves acquiring equipment and components for the construction of the vehicles, Wilson-Hodge added.
According to General Dynamics, the contract is expected to create or sustain about 3,000 jobs per year for the firm and its Canadian supply chain of over 500 companies. That would be for a period of 14 years, Wilson-Hodge said.
Officials with the Canadian Association of Defence and Security Industries (CADSI) say until they see the specifics of what the Liberal Party government is proposing in regard to reviewing defense exports it is limited in what it can say about the situation.
But Christyn Cianfarani, president of CADSI, noted that, "the government of Canada has a rigorous export control process and CADSI member companies follow those rules and procedures."
Cianfarani also pointed out that exports are essential to the ongoing health of Canada's defense firms. “This is an industry that generates approximately $12.6 billion in revenues annually, half of which comes from exports,” she said.
Wilson-Hodge noted that, “GDLS-Canada exports in full compliance with the laws and regulations of the government of Canada.”
Questions about the Saudi deal emerged during the Canadian federal election campaign last summer when some opposition political parties criticized the Conservative Party government for approving the contact.
The election campaign was launched shortly after Saudi courts upheld the sentencing of blogger Raif Badawi to 10 years in prison and 1,000 lashes.
Badawi, whose family has been granted asylum in Canada, was sent to prison in 2014 for insulting Islam.
Conservative Prime Minister Stephen Harper acknowledged human rights violations in Saudi Arabia but said that any of Canada’s allies would have signed a similar defense export deal with that country.
The Liberal Party government is now using similar arguments. “Almost all of our allies are selling weapons to Saudi Arabia,” Foreign Affairs Minister Dion said. “It’s part of the world in which we live.”
Dion also told journalists that Canada’s reputation would be harmed if the government cancelled the contract.
Project Ploughshares, which monitors Canada’s arms exports, used the Freedom of Information law to obtain records showing that two contracts were awarded under the Saudi deal. Its researchers believe one was for the provision of the light armored vehicles, while the other was for in-service support and training.
General Dynamics Land Systems – Canada has sold more than 1,400 LAVs to the Saudis over the last 20 years. The vehicles have been equipped with a variety of weapon systems, ranging from 25mm cannons to 90mm guns.
Human rights observers point out that some of the vehicles were sent in 2011 to help Bahrain’s rulers suppress a pro-democracy uprising.