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Light Armoured Vehicles are parked on the lot of the General Dynamics Land Systems factory in London, Ont., on Wednesday, April 13, 2016.Dave Chidley/The Globe and Mail

The Canadian government is fond of boasting that its controls on weapons exports are among the strongest in the world, but bragging rights may soon go to Sweden, where legislators are readying new restrictions that could curb arms sales to non-democratic nations.

The rigour and effectiveness of Canada's approval process for military exports was called into question this year after Foreign Affairs Minister Stéphane Dion in April approved permits to ship the bulk of a controversial $15-billion combat vehicle deal to Saudi Arabia, a country with an abysmal human rights record.

Mr. Dion, who said the Liberals had no choice but to honour a deal signed by the Conservatives, is promising more "openness, transparency and rigour" in future contracts.

Arms-control advocates say the government should look to Sweden for inspiration.

"If the government is serious about improving the regulation of Canadian arms exports, it should look closely at – and perhaps even aim to improve upon – states like Sweden that are leading the way," said Ken Epps, a senior researcher with Project Ploughshares, a disarmament group in Waterloo, Ont., that is an agency of the Canadian Council of Churches and tracks arms shipments.

Saudi Arabia, an absolute monarchy, would likely find it hard to qualify for Swedish military exports if Stockholm adopts what has been proposed.

When it comes to Saudi Arabia, Sweden and Canada are heading in different directions.

U.S. defence contractor General Dynamics Land Systems is preparing fighting vehicles in London, Ont., for shipment to Riyadh this year. It is Canada's largest advanced manufacturing export contract ever, Ottawa says. As well, Mr. Dion is headed to Saudi Arabia next week to talk strategy with Arab states on combatting groups such as Islamic State.

In Sweden, new sales of military goods to Saudi Arabia appear to be on the wane since March, 2015, when the Social Democratic government cancelled a defence co-operation agreement with Riyadh in a dispute over human rights with the Mideast country. Swedish Foreign Minister Margot Wallstrom, who has vowed to enact a feminist foreign policy, publicly criticized Saudi Arabia for banning women from driving and violating their rights. She also called the flogging of blogger Raif Badawi "medieval."

Just months after the Stockholm-Riyadh fracas, an all-party committee of Swedish federal legislators recommended ambitious changes to the country's arms export controls in a report called Tightened Control on Exports of Military Equipment.

This included, most notably, making democracy a criterion for assessing which countries can receive Swedish-made military goods.

"A country's democratic status will be a central condition for an export permit," committee chairman Hans Wallmark told media last June when he presented the study.

A spokeswoman for Sweden's foreign ministry told The Globe and Mail that Stockholm is planning to unveil new legislation in response to this report by the spring or summer of 2017.

The legislators who drafted the Parliamentary report, including members of the governing party, acknowledge the proposals could mean more restrictions on where Sweden sells arms.

"This means that the potential markets for Swedish defence industry will diminish," Lena Hjelm-Wallen, deputy committee chairman and a former minister of foreign affairs, said last June. "That is the price we'll have to pay."

In Canada, the consensus among human-rights, development and arms-control groups is that the Canadian arms-control system failed on the Saudi deal. In an open letter last month to Prime Minister Justin Trudeau, they called the decision to award export permits "immoral and unethical."

Awarding permits is a vital step in sanctioning Canadian arms exports, and the decision is not supposed to be affected by whether a contract is already signed. It amounts to a judgment call by the Canadian government that the equipment will not be used against civilians in Saudi Arabia, a country that watchdog Freedom House ranks among the "worst of the worst" on human rights.

Canada's arms export rules require Ottawa to demonstrate "there is no reasonable risk" the goods shipped to human rights abusers might be used against civilians. But all the department of Global Affairs offered in the way of assurance on the Saudi deal was to say it was not aware of any evidence that combat vehicles exported to Riyadh in the past had been used to violate human rights.

The export deal was approved despite troubling signs in Saudi Arabia.

Liberals green-lit the shipment just months after the biggest round of mass executions in Saudi Arabia in decades – it included a dissident cleric critical of the ruling House of Saud after a trial Amnesty International described as "grossly unfair." Mr. Dion's approval also came only months after a UN panel accused Riyadh of violating humanitarian law in its conduct of the war in neighbouring Yemen and as international watchdogs warned that human rights conditions in Saudi Arabia "steadily deteriorated" over the previous year.

Earlier this month, The Globe and Mail published footage of Riyadh's forces using armoured vehicles against civilians in the country's Eastern Province. The vehicles are not Canadian-made, but they demonstrate that the Saudis have used such machines against their people. The European-Saudi Organization for Human Rights estimates similar equipment has been used against dissidents 15 times since 2011.

The Swedes do not shy away from producing military goods and their conduct has been less than angelic at times.

Sweden ranks 12th in the world among arms exporters in recent years – just one spot ahead of Canada, according to the Stockholm International Peace Research Institute (SIPRI) – and it has made controversial sales to questionable customers, including a 2007 Gripen fighter jet deal with Thailand's military junta. In 2012, Sweden's defence minister, Sten Tolgfors, resigned after media revealed a government agency was secretly helping Saudi Arabia plan a factory to build anti-tank explosives.

Over the years however, Sweden has built a more rigorous and transparent system for vetting arms sales to foreign countries than that of Canada.

And in the past 10 months, the Scandinavian country has been engaged in a public debate over what kind of weapons vendor it wants to be. Anna Ekberg, a spokeswoman for the Swedish foreign ministry, said the government has consulted about 100 groups from companies to non-governmental organizations to municipalities on a new export regime law.

Arms control experts such as Sam Perlo-Freeman, a senior researcher with SIPRI, an independent group that researches conflict and the arms trade, said he expects that whatever law is enacted will be written "more or less along the lines of the proposals" because an all-party committee issued them. He said whether it will be stronger or weaker remains to be seen.

This is not sitting well with Swedish defence interests. Hakan Buskhe, CEO of Swedish aerospace and defence manufacturer Saab, has warned his company would move most of its research and development activities abroad if the legislation proceeds as recommended.

The Swedish proposal lays out metrics that Stockholm would use to assess whether a country is democratic, including open and fair elections with universal suffrage, whether these elections cover the senior leadership positions and whether freedoms such as expression and assembly are maintained between elections.

"Granting a licence to export military equipment to a country that has severe shortcomings in terms of its democratic status can be regarded as legitimizing or giving political support to the regime in office. This in turn may counteract Sweden's overarching foreign policy objective to promote democracy and human rights," the 2015 all-party report said.

Canadian arms control advocates say Ottawa should be pioneering better standards as well.

The Swedes give their Parliamentarians a role in scrutinizing arms exports – at least in some cases. An export-control council includes members from all parties in the national legislature, and while its recommendations are not binding, they are part of the process.

The idea in Sweden is that legislators are informed of an arms deal in advance in an effort to reach agreement on its merits.

"The intention of the Swedish system, uniquely in international terms in that representatives of the political parties can discuss potential export transactions in advance, is to build a broad consensus on export control policy and promote continuity in the conduct of that policy. Unlike in many other countries, the Export Control Council deals with cases at an early stage, before a specific transaction comes up," the Swedish government has said.

In Canada, however, Parliamentary oversight does not seem to be a priority for the government.

In April, the Trudeau Liberals used their Commons majority on the House foreign affairs committee to reject an NDP proposal, backed by the Conservatives, to create Parliamentary oversight of arms exports. New Democrat MP Hélène Laverdière had envisioned a subcommittee of MPs to screen arms deals.

"The [Canadian] committee's vote became another illustration of how far Canada has slipped behind other countries such as Sweden in terms of transparency and oversight of … export controls," Mr. Epps said.

The Swedes give far more information to voters about military exports.The government authority charged with screening exports releases an annual report within months of the previous calendar year-end that exhaustively chronicles annual military and security shipments. Its 2015 report is already out.

In Canada, the last military goods export report made public covered 2013.

The annual Swedish report names companies with major defence and security goods exports for the previous year and the amount shipped – details Canada has never revealed, Mr. Epps said.

The Canadian government's reports offer far less information. Canadians are told the aggregate dollar value of arms exports to countries – by category – but no details on transactions. The Saudi deal came to light only because the Conservative government was eager to publicize what it saw as an export win.

It is not clear whether Canada's export-control regime has ever blocked shipments of weapons. The Canadian government cannot say how many applications to export weapons and military technology have been rejected in the past 10 years, for example. "Export permit data is not compiled in this fashion," a spokesperson for the department of Global Affairs told The Globe and Mail in January.

In Sweden, the government authority that screens exports reported that, in 2015, it rejected 22 requests for export permits to countries including Saudi Arabia, Bahrain, Egypt, United Arab Emirates, China, Pakistan, Thailand and Tunisia. It noted that this does not mean all exports to those countries were denied, just the requests cited.

Applying a democratic criterion to Canadian arms exports to Saudi Arabia would certainly complicate Canada's ability to justify the combat vehicle contract, or future deals, with Riyadh.

Craig Stone, an associate professor at the Canadian Forces College, said the consequences would be myriad if Ottawa walked away from the $15-billion Saudi deal, which General Dynamics says helps sustain more than 3,000 jobs across the country.

The Harper government signed the deal in 2014, but the Trudeau government took political ownership of the contract in 2015, when it approved the bulk of the export permits.

"I have no idea what drove either the previous Conservative government or the present Liberal government to make the decision they did, which appears to be at odds with our own export-controls rules, but I do know it is never as black and white as people like to make it out to be," Prof. Stone said.

"If Canada decided not to sell the vehicles to Saudi Arabia, General Dynamics would just move the production to their U.S. facility and the vehicles would still be sold to Saudi Arabia," he said.

He said Ottawa would also have to weigh the impact on its relations with Arab states.

"In addition to considering the possible loss of jobs in London … the government will have also had to consider what the impact would be on things like its relationship with other nations of the Gulf Cooperation Council, access to facilities in the region for military activities, its reputation for being a trusted country and what that means for other business development, military and commercial, and opportunities around the world for trade."

Anna Ek, president of Svenska Freds, a long-time Swedish peace organization, said Sweden's arms export process still has too many shortcomings. She said the oversight by legislators is insufficient because those parliamentarians providing scrutiny cannot discuss the proposed deals with their own leaders.

She expects Sweden will add democracy as a criterion for judging arms deals, but fears the wording will not be robust enough to make this an overriding concern. Rather, she said she is concerned it could be set aside in favour of other foreign policy interests, such as defence and security.

Aaron Karp, who once worked at SIPRI but now teaches at Old Dominion University in Norfolk, Va., says debate about arms exports is especially painful for Sweden's governing Social Democratic Party, which is torn between different internal constituencies.

He said Sweden is trying to end interminable debates about arms exports, but there is a risk that legislating as many rules as possible might make weapons export licensing "more mechanical and less discretionary" for policy makers.

"The arms trade compels every exporting and importing country to acknowledge the contradictions of their foreign and security policies: the gap between the goals of a peaceful world, the possibilities of inter-state war, and the everyday reality of armed conflict and hybrid war, between the desire to transform the world and the imperative to support friends and slow the spread of chaos, between moral purity and messy realities," Professor Karp said.

With a report from Reuters