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The big deal

Ottawa is under fire for brokering a deal to sell $15-billion worth of light-armoured vehicles to Saudi Arabia, despite rules that require the government to curb shipments to countries with a 'persistent record of serious violations of the human rights of their citizens.' Steven Chase breaks down the deal and the potential cost of arming a repressive regime

Saudi Arabia’s King Salman Prime Minister Stephen Harper tours the General Dynamics Land Systems in 2014.

Saudi Arabia’s King Salman Prime Minister Stephen Harper tours the General Dynamics Land Systems in 2014.

Pablo Martinez Monsivais/AP Photo Dave Chidley/THE CANADIAN PRESS Graphic: Murat Yukselir/The Globe and Mail Photo illustration: The Globe and Mail

The deal

The sprawling General Dynamics plant in northeast London, Ont., is a rare success story today in Canada's badly battered manufacturing sector.

It's the key beneficiary of a deal brokered by the former Harper government that paved the way for what is now the largest manufacturing-export contract in Canadian history.

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The $15-billion deal, first announced in 2014, will keep 3,000 Canadians employed for 14 years – many of them located in Southwestern Ontario.

There's just one glaring drawback: the customer.

Under this transaction, Canadian workers are building weaponized armoured vehicles for Saudi Arabia, a country roundly condemned for an abysmal record on human rights as a result of its appalling treatment of women, dissidents and prisoners.

General Dynamics Land Systems (GDLS) advertises its fighting vehicle as a classic piece of Canadiana. In marketing materials, it showcases the combat machine, equipped with a machine gun, alongside photos of poutine, a Mountie, a hockey game and a moose. The advertising tagline reads: "This is Canadian."

Critics, however, say the Saudi arms deal is un-Canadian and that a country whose icons include peace makers such as Lester B. Pearson and Roméo Dallaire has no business selling weapons to a Middle East regime regularly ranked among the world's worst on human rights.

Canadian soldier Steve Sabo with the 2nd Battalion, Princess Patricia's Canadian Light Infantry from Shilo, Manitoba, drinks some water on a LAV-3 on Friday Aug. 1, 2008.

Canadian soldier Steve Sabo with the 2nd Battalion, Princess Patricia’s Canadian Light Infantry from Shilo, Manitoba, drinks some water on a LAV-3 on Friday Aug. 1, 2008.

Joe Bryksa/The Canadian Press

Landing the Big One

Canada's biggest arms deal in history is no ordinary transaction.

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Stephen Harper's government lobbied the Saudis hard for the business, pouring significant resources into the competition. This deal, clinched less than two years ago, was brandished by the Conservatives as proof that "economic diplomacy" – or making the service of private industry the centrepiece of foreign policy – works.

The prime minister himself wrote then-King Abdullah to assure him that Canada was committed to the deal and executives from its defence-export-promotion company, the Canadian Commercial Corp., even spent the Christmas of 2013 in the Middle East waiting for the opportunity to get the monarch to sign off on the deal.

Adam Taylor, a former aide to then-international trade minister Ed Fast, said winning the contract proved "Canada was playing the game in a competitive world where others are playing the game more fiercely and with better results."

The contract was a lifesaver for the GDLS plant in London, which was looking for new business after Canada's participation in the war in Afghanistan had wound down, and the Canadian Armed Forces had less light-armoured vehicle (LAV) work to send its way.

"This deal literally saved the General Dynamics Land Systems operation in London, Ont., and made it the hub for the next generation of light-amoured vehicle," Mr. Taylor said.

The federal government is front and centre in this deal. It brokered the deal and is the prime contractor, meaning it's ultimately responsible for the delivery of these weapons to the Saudis.

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The foreign service has embraced its beefed-up role in landing business for companies such as GDLS, which is a subsidiary of a major U.S. defence contractor.

When Canada's ambassador to Saudi Arabia gave Ottawa early notice the deal was coming together, he was positively jubilant. In an October, 2012, e-mail with the subject line "GDLS lands the Big One," Thomas MacDonald informed the federal government of what had transpired and ended his missive with a jubilant expression: "Gotta LOV the LAV!"

The customer

The Saudi Arabian National Guard is a distinctive defence force inside this Middle East country. It is loyal to the long-ruling Saud family and helps this clan keep its grip on power. It is dedicated to protecting the monarchy from internal threats and, if necessary, from rival families or a coup by the Saudi military.

This praetorian guard is a useful tool to suppress civil unrest. Separate from the Saudi army, it has a main force of 100,000, and owns its own helicopters, artillery and thousands of armoured combat vehicles.

In 2011, the Saudi King sent security forces equipped with fighting vehicles to neighbouring Bahrain to help his ally crush protests sparked by the Arab Spring uprisings across the region.

The Canadian government doesn't deny that Canadian combat vehicles, part of far smaller orders this country sold to the Saudis in the past, may have been part of the force deployed to Bahrain. Ottawa says only that "to the best of the Government of Canada's knowledge," Canadian armoured vehicles were not used to kill, or fire upon, civilians who died in the uprising.

That same year, Riyadh sent the guard to Saudi Arabia's Eastern Province, home to the country's major oil fields, to quash demonstrations by the sizable Shia minority in February and March, 2011. Shiites make up as much as 15 per cent of the Saudi population and form the majority in Eastern Province.

A light-armoured vehicle driven by Canadian soldiers is shown in southern Afghanistan in 2010.

A light-armoured vehicle driven by Canadian soldiers is shown in southern Afghanistan in 2010.

KIRSTY WIGGLESWORTH/ASSOCIATED PRESS

The problem with Saudi Arabia

Saudi Arabia is a human-rights pariah.

It is among the biggest executioners in the world, often carried out by beheading. It conducted the biggest mass execution in decades in early January, killing 47 – including a prominent dissident Shia cleric from Eastern Province.

The Sunni majority oppresses its Shia minority citizens, who face discrimination in the education system and the courts, and cannot build houses of worship outside designated enclaves.

Human-rights advocates are pleading with Riyadh to reconsider the case of Ali Mohammed Baqir al-Nimr, sentenced to death by crucifixion over his alleged role in pro-Shiite protests when he was 17 years old.

Saudi Arabia is wreaking devastation in Yemen as the head of a coalition of Arab states that are battling Houthi forces aligned with Iran. A United Nations panel report last week said the Saudi-led military campagn is indiscriminately killing civilians there, conducting "widespread and systematic" bombing of non-combatants. The report attributed 60 per cent of civilian deaths and injuries in the Yemen conflict to air-launched explosive weapons, and said the coalition's "targeting of civilians … is a grave violation of the principles of distinction, proportionality and precaution," and violate international law.

Women cannot drive in Saudi Arabia. Saudi authorities took harsh measures against women who defied this ban in 2015.

The male guardianship system there means women cannot obtain a passport, marry, travel or obtain higher education without the approval of a male guardian, usually a husband, father, brother or son, according to Human Rights Watch.

Public practice of religion other than Islam is forbidden, as are challenges to Islam.

Saudi writer Raif Badawi was sentenced to 10 years in prison and 1,000 lashes after being convicted for blasphemy.

Secrecy and a refusal to reconsider

The federal government is supposed to police arms exports to make sure Canada is not supplying weapons to human-rights abusers.

In the case of the Saudi arms deal, it's impossible for Canadians to learn why Ottawa let this deal proceed.

As with the Harper Conservatives, Justin Trudeau's new Liberal government is refusing to explain how this contract is justified under Canada's arms-control rules, which are supposed to restrict weapons exports to countries with poor human-rights records.

Those rules call for Ottawa to curb shipments to countries with a "persistent record of serious violations of the human rights of their citizens." Shipments are forbidden if there is a chance the customer could turn the arms against its own population. In the case of Saudi Arabia, the biggest risk would be that the National Guard uses the combat vehicles against the restless Shia minority in Eastern Province.

Foreign Affairs Minister Stéphane Dion's department refuses to make public the analysis that Ottawa is supposed to conduct to determine that shipping arms to Saudi Arabia is acceptable to Canada, saying it could injure the "commercial confidentiality of the deal."

And also, as with the Tories, the Liberals are refusing to reconsider the contract, framing it as a done deal despite urging from elder Liberal statesman Lloyd Axworthy to review the transaction.

"Everybody says it's for jobs, but I think if you start counting up the price you pay in terms of instability and repression and forceful maintenance of order, you may be paying a high price," Mr. Axworthy told The Globe in January.

"I think the Saudis have really, in the last couple of years, really become a problem country," he said. "The degree of oppression against women and dissidents in Saudi Arabia is becoming almost epidemic."

Mr. Axworthy said Saudi Arabia's and Canada's interests don't align on major issues. Canada is suffering the impact of the oil-price crash after Saudi Arabia abandoned a long-standing policy of cutting supplies to stabilize petroleum prices. As well, the Mideast country is long accused of exporting Islamic fundamentalism. "We're saying we've got to do something about terrorism and extremism," Mr. Axworthy said, "and you've got a very wealthy country using a good part of its wealth to proselytize."

Both Ottawa and General Dynamics refuse to divulge details of the deal, including how many combat vehicles will be sold.

Ottawa is contractually obliged to keep secret the details of the transaction. Department of Global Affairs e-mails obtained by The Globe and Mail under the Access to Information Act indicate the Saudis have made excess publicity about the sale of armoured fighting vehicles a deal breaker.

Officials were scrambling behind the scenes last year after the arms deal got more media attention, trying to determine the consequences of publicly releasing the terms of the Saudi contract.

A Canadian LAV (light armoured vehicle) arrives to escort a convoy at a forward operating base near Panjwaii, Afghanistan at sunrise on Sunday, Nov.26, 2006.

Bill Graveland/CP

Not 'jeeps'

Mr. Trudeau has sought to play down the egregiousness of the Saudi arms deal, telling reporters during the federal election campaign that the deal brokered by Canada was merely a transaction to sell "jeeps" to Riyadh.

But as The Globe and Mail first reported in January, the armoured combat vehicles will feature medium- or high-calibre weapons supplied by a European subcontractor – such as a powerful cannon designed to shoot anti-tank missiles.

Details about the turreted weapons have been slow to emerge because both GDLS and its Belgian supplier, CMI Defence, part of CMI Groupe, are saying little about the contract and subcontract.

CMI, which manufactures turrets and cannons, is supplying two gun systems for the Canadian-made vehicles, including a medium-calibre weapon, and the Cockerill CT-CV 105HP, which it advertises as a "high-pressure gun with an advanced autoloader to deliver high lethality at very light weight," one with the capacity to fire 105 mm shells and a heavy, armour-penetrating missile.

Ottawa's ongoing duty

The Trudeau Liberals frame the Saudi deal as a fait accompli and say that they cannot alter it.

This is despite the fact the contract is still in early phases – General Dyamics said in January it is still in "material procurement stage" and notwithstanding the Canadian government's ongoing obligation to monitor the human-rights conduct of Saudi Arabia.

Under pressure from critics of the Saudi deal, the Liberals shifted messaging in late January – acknowleding they have the power to suspend exports in the $15-billion arms sale, saying Ottawa reserves the right to do so if events warrant.

That's not enough for some. Cesar Jaramillo, executive director of Project Ploughshares, an anti-war group based in Waterloo, Ont., thinks Ottawa already has sufficient grounds to reconsider the sale.

"Of course, job creation is a legitimate pursuit for any government," he told The Globe. "But there are lines that Canada should not cross in the pursuit of profit – and sustaining one of the worst human-rights violators in the world should clearly be one of them."

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