Local politicians are trying to calm the fears of London residents in the wake of the Trudeau government’s suggestion it may scrap a $15-billion arms deal with Saudi Arabia.
There are growing concerns about the impact a contract cancellation would have on General Dynamics Land Systems (GDLS), which manufactures the light armoured vehicles ordered by Saudi Arabia and is also one of London’s largest employers.
London North Centre Liberal MP Peter Fragiskatos held a news conference Tuesday morning emphasizing that no final decision has been made about the GDLS contract. He also admitted that the decision ultimately rests with the prime minister and foreign minister.
Fragiskatos hasn’t met with Justin Trudeau since the prime minister made the comments, but the MP said they’re trying to strike a balance between Canada’s human rights obligations and the responsibility to workers at GDLS.
Political opponents, citing the killing of journalist Jamal Khashoggi and Saudi Arabia’s involvement in the war in Yemen, insist Trudeau should end the deal, which is the country’s biggest export contract ever and was negotiated by the previous Conservative government.
Fragiskatos said Trudeau is considering a wide range of options, including those that secure jobs at GDLS, but it’s not known when a decision will be made.
“I simply cannot give you a timeline on this,” he said. “It is being worked on. We are keenly aware of the importance of the deal to the community and that workers — I see it, I hear it from them, I know that they are worried and I’m here to provide a sense of reassurance that we are looking at all options to preserve jobs.”
But Gerry McCartney, CEO of the London Chamber of Commerce, said cancelling the contract would severely damage the country’s reputation as a reliable trading partner.
“If you want to teach the Saudis a lesson then do so diplomatically. There are a number of different diplomatic solutions you could deliver,” he said. “You can do as other G8 or NATO countries are doing and say: ‘Look, we’re not going to ship any future product to you’ so you suspend future trade with them — not cancel, suspend future trade.”
McCartney believes the negative impact on the London region would be worse than GM’s recent announcement that it would shut down its plant in Oshawa, Ont.
“In terms of dollar volume, it’s absolutely larger. We’re talking $14 billion. That’s a lot of money that disappears out of our economy, and certainly our trade balance would be out of whack,” he said.
“We know that tomorrow, China or Russia would fill that order in a heartbeat so now they’ve got the same weapons, same pieces of equipment, and what’s changed in terms of their human rights violations? Nothing. So, what have we taught them? All we’ve done is created a catastrophic hole in our economy and punished London for those efforts.”
Officials with GDLS issued a company statement on Tuesday.
“We are continuing to execute our valid and binding contract,” read the statement. “Were Canada to unilaterally terminate the contract, Canada would incur billions of dollars of liability to General Dynamics Land Systems-Canada.
“In addition, terminating the contract would have a significant negative impact on our highly skilled employees, our supply chain across Canada and the Canadian defence sector broadly,” the GDLS statement continued. “We hope that we will be allowed to continue to keep building sophisticated, high-value equipment in Canada.”
As Fragiskatos was addressing members of the media Tuesday morning, London Mayor Ed Holder also issued a statement to the media, echoing many of the Liberal MPs’ sentiments.
Trudeau’s recent comments on the deal represented a notable hardening in tone from the prime minister, who previously said there would be huge penalties for scrapping the agreement.
Last month, Trudeau said Canada could freeze the relevant export permits if it concluded the weapons had been misused.
“We are engaged with the export permits to try and see if there is a way of no longer exporting these vehicles to Saudi Arabia,” Trudeau told CTV. He did not give further details.