August 6, 2018 11:47 am
Updated: August 6, 2018 5:02 pm

As Saudi-Canada feud escalates, here’s how axing armoured vehicle deal could hurt Trudeau in 2019

WATCH: Foreign Minister Chrystia Freeland said questions about whether Saudi Arabia's decision to freeze trade with Canada would affect the light armoured deal are ones to ask the Arab kingdom.


The future of one of Canada’s largest arms deals — and whether axing it could hurt Liberal prospects in 2019 — is fast becoming a major question after Saudi Arabia reacted to criticism of its treatment of female activists by ejecting the Canadian ambassador Sunday night and ordering a freeze on all new trade.

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On Monday morning, the Middle Eastern kingdom also escalated the feud by suspending scholarships for the roughly 16,000 Saudi students studying in Canada.

READ MORE: Saudi Arabia expels Canada’s ambassador, freezes trade with Ottawa

Now, the question remains of what will happen to a highly controversial deal brokered by the former Conservative government and upheld by Prime Minister Justin Trudeau (former foreign affairs minister Stephane Dion signed the export permits) to let a Canadian company sell $15 billion worth of light armoured vehicles to the repressive regime.

READ MORE: Arab states back Saudi Arabia in expelling Canadian ambassador over human rights dispute

“At this point, I’m really reluctant to come to any particular point,” said Thomas Juneau, an assistant professor at the University of Ottawa who specializes in Middle East relations with Canada, noting the next 12 to 24 hours will be critical to understanding how far this feud might go.

“This is Saudi Arabia. They’ve been acting very unpredictably and aggressively.”

WATCH: Why Saudi Arabia is expelling Canada’s ambassador

It all began around 7 PM Sunday night when news broke that Saudi Arabia had ordered the Canadian ambassador to leave and would recall its own ambassador from Ottawa, in response to statements made last week by Canada that criticized the kingdom’s arrest and detention of women’s rights activists.

One of those activists, Samar Badawi, is the sister of jailed dissident blogger Raif Badawi, whose wife is a Canadian citizen and lives in Quebec.

READ MORE: So what if Saudi Arabia is using Canadian-made arms to fight citizens?

Saudi Arabia accused Canada of interfering in its internal affairs and also said all “new business and investment” would be frozen as a result.

That reference to “new” trade is what is raising questions about the future of the arms deal.

READ MORE: Federal court rejects bid to block Canada’s $15B Saudi Arabia arms deal

Inked in 2014, the deal allowed General Dynamics Land Systems Canada (GDLS) to provide Saudi Arabia with more than 1,000 armoured vehicles, but the details of exactly what they will be used for have remained secret because of a confidentiality provision in the contract.

However, CBC News reported earlier this year that the deal will not just include the “trucks” and “jeeps” that both Harper and Trudeau have described.

Instead, it will also see the kingdom provided with hundreds of “heavy assault,” “anti-tank” and “direct fire” vehicles.

WATCH BELOW: Saudi Arabia restricts Canada trade, recalls ambassador

So far, the government has resisted repeated calls for it to cancel the arms deal, suggesting doing so could hurt faith in Canadian business.

But could the Saudis cancel the deal themselves?

“Saudi Arabia can get the LAVs from elsewhere,” said Juneau, noting any costs associated with cancelling the deal would likely be easily absorbed.

“The cost for Saudi Arabia is manageable. If you only look at the numbers, this is a bigger loss for Canada.”

Could losing the deal hurt Liberals in 2019?

Electoral chances may also be a key consideration for the governing Liberals in how they respond.

Roughly 3,000 jobs and millions of hours’ worth of manufacturing would be at stake if the deal were axed by either side.

About 2,200 of those jobs are in London, Ont.

WATCH BELOW: Saudi princess drives for the first time in Saudi Arabia after driving ban on women lifted

The actual plant is location in the riding of London-Fanshawe, which has been held by NDP MP Irene Mathyssen since 2006.

The region was hard hit by the collapse of manufacturing during the Great Recession — both the Ford and Caterpillar plants closed — and during the last election, few officials were wiling to speak out against the deal when asked.

When the deal was struck, the Conservatives had held three of the four London-area ridings, excluding London-Fanshawe.

But in the 2015 election, the Liberals flipped two of those seats: London North-Centre and London West.

WATCH: Saudi Arabia expels Canada’s ambassador, freezes all trade with Ottawa

If thousands of those promised jobs disappear from the deal being axed, that could prove a political challenge for the Liberals in chipping away at the swaths of seats in southwestern Ontario that helped propel them into a majority government.

Global News has reached out to Global Affairs Canada asking if there are any plans to reassess the export permits granted to the deal.

No response has yet been received.

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