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Canada could face severe consequences for cancelling Saudi arms deal: global affairs expert

WATCH: Cancelling controversial arms deal with Saudi Arabia could cost "billions", Trudeau says

A global affairs expert is shedding light on the consequences London and the rest of the country will face if the government cancels a $15-billion arms deal with Saudi Arabia.

Prime Minister Justin Trudeau is facing increasing public pressure to scrap the contract, signed by the previous Conservative government and billed as the largest arms deal in Canadian history, in the wake of journalist Jamal Khashoggi’s death.

Trudeau may cancel $15B arms deal with Saudi Arabia over Khashoggi
Trudeau may cancel $15B arms deal with Saudi Arabia over Khashoggi

WATCH: Trudeau may cancel $15B arms deal with Saudi Arabia over Khashoggi

Trudeau said Wednesday that Canadians expect there to be “consequences” for the brutal murder of Khashoggi, who was killed earlier this month after entering the Saudi consulate in Turkey. And he suggested his government is looking for ways to cancel the arms contract without triggering any financial penalties.

“We are a looking at … suspending export permits, which is something we’ve done in the past,” Trudeau said on his way into a Liberal caucus meeting.

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READ MORE: Trudeau says Ottawa could suspend Saudi arms sale permits after Khashoggi murder

NDP MP for London-Fanshawe, Irene Mathyssen, feels the contract violates some of Canada’s international obligations.

“We signed a treaty, an international treaty, that says we must not sell arms to governments that are guilty of human rights offences, and very clearly, the Saudi government is,” she said.

Her riding includes General Dynamics Land Systems (GDLS), the plant on Oxford Street East in London building the light armoured vehicles. Mathyssen wants the government to cancel the contract, provide support for the impacted workers, and find new customers for the plant.

READ MORE: London, Ont. company that makes LAVs for Saudi Arabia lays off 37 workers

“What this government has got to do is support those workers,” Mathyssen said. “They have to set up a program, a protocol, to make sure that those workers and their families, and the workers who provide parts and supply General Dynamics, are not hurt.”

But David Perry, senior analyst at the Canadian Global Affairs Institute, tells Global News Radio 980 CFPL the contract complies with our permitting process for exports. That process involves reviewing whether there is a significant risk the goods being exported would be used to commit a human rights abuse, he said.

“Despite all of the controversy over this, over the last several years, the government of Canada has continued to say that there’s been no evidence that that’s the case,” Perry said. “The Saudis do things that lots of people find abhorrent for good reason, but they have not been doing them with light armoured vehicles, specifically those made in London, Ont.”

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READ MORE: Canada is prepared to freeze Saudi arms deal if weapons misused, Trudeau says

Perry said the government has been signing similar contracts for the past 30 years, so there is a significant body of evidence to evaluate how they use these vehicles.

“There’s lots of discussion but too much of it inappropriately and wrongly draws a straight line between a country doing something bad that we don’t like, to then that creating a premise where you should cancel an export deal,” he said. “That’s not how any government in Canada, since we’ve been doing arms exports, has ever looked at these things.”

Perry noted the consequences for cancelling the contract could include: the government of Canada being financially liable to the Saudi government and GDLS; the company leaving Canada; the cancellation creating job losses in London and across the country; Canada losing tax revenue; and the controversy undermining Canada’s export regime.

“There would be geopolitical implications. There would be a huge number of economic implications, both immediately and in the wider economy,” he said. “So I think [the Canadian government] is still looking for a way to basically voice their displeasure with the Saudis, as are many other Western governments, but cancelling this, I think, would be a big step because as far as I understand the way that we look at arms exports, it would effectively mean that we’ve changed the rules of the game.”

Trudeau said he can’t give the exact penalty a price tag because the contract includes a requirement of total confidentiality.

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