Penalty for cancelling Saudi arms contract ‘in the billions’: Trudeau

The company insisted the layoffs are “part of a normal cycle of work” and have “no connection to recent events that the government of Canada is addressing.” (File Photo: Justin Trudeau)

OTTAWA — The price for registering Canada’s outrage over the murder of journalist Jamal Khashoggi went up exponentially Thursday, as Justin Trudeau revealed the penalty for cancelling a $15-billion arms deal with Saudi Arabia would be “in the billions of dollars.”

The prime minister blamed Stephen Harper’s previous Conservative government — which signed the contract to sell light armoured vehicles to the desert kingdom — for making it so costly to cancel and for making it impossible for him to publicly reveal the exact figure.

But he was accused by the NDP of inventing numbers to justify not cancelling the contract.

Earlier this week, Trudeau signalled his reluctance to cancel the deal, saying he didn’t want “to leave Canadians holding a billion-dollar bill because we are trying to move forward on doing the right thing.”

During a news conference Thursday with Netherlands Prime Minister Mark Rutte, Trudeau was pressed to say if that was a precise figure. He said the “extremely difficult contract” signed by the Harper government included a requirement for “total confidentiality” which prevents him from disclosing details.

But he added: “Suffice it to say possible penalties would be in the billions of dollars but that is something we are looking at right now.”

Trudeau also said that the government is “actively reviewing existing export permits” for arms to Saudi Arabia.

While that review is underway, Foreign Affairs Minister Chrystia Freeland said no new export permits will be approved.

Canada temporarily suspended approvals of new export permits to the Gulf kingdom in 2017, while the government investigated allegations that Saudi Arabia had used Canadian-made armoured vehicles against its minority Shia Muslim population. The suspension was lifted a few months later after the investigation found no conclusive evidence of the allegation.

While suspending export permits falls short of outright cancellation of the contract, Trudeau said Thursday it would provide a lever for Canada to increase pressure on Saudi Arabia to come clean on what happened to Khashoggi.

“One of the things that we are working on as an international community is ways to put leverage and put pressure on Saudi Arabia to give better answers as to what actually happened to Jamal Khashoggi and to understand that protection of a free press is fundamental to protecting human rights and upholding the stability and prosperity of countries around the world,” he said.

Khashoggi disappeared after entering the Saudi consulate in Istanbul on Oct. 2. Saudi Arabia initially insisted he’d left the consulate, then said he’d been killed in a fist fight inside the consulate and, on Thursday, finally admitted his murder had been premeditated.

Turkish officials say a 15-man Saudi hit squad — including at least one member of Crown Prince Mohammed bin Salman’s entourage — tortured, murdered and dismembered Khashoggi, whose remains have yet to be found.

Rutte said the Netherlands has had “a very restrictive arms sales regime” with Saudi Arabia for years and he pleaded at last week’s European Council meeting for other European countries to do the same.

Lawmakers at the European Union passed a non-binding resolution Thursday calling on member countries to impose an EU-wide arms embargo on Saudi Arabia. The resolution also called on member countries to halt exports of “surveillance systems and other dual-use items that may be used in Saudi Arabia for the purposes of repression.”

In the House of Commons, New Democrats urged the Trudeau government to follow suit.

“Everyone knows the kingdom is one of the worst human rights offender in the world. This alone should be enough (to cancel arms contracts),” said NDP foreign affairs critic Helene Laverdiere.

“What are the Liberals waiting for?”

Transport Minister Marc Garneau, standing in for the prime minister, said the government strongly expects that “Canadian exports are used in a way that’s consistent with Canada’s foreign policy objectives and that fully respects human rights.”

“We have frozen our export permits before when we’ve had concerns about their potential misuse and we will not hesitate to do so again.”

Meanwhile, the London, Ont.-based company that won the contract to supply Saudi Arabia with light armoured vehicles announced Thursday that it is laying off more three dozen employees.

In a written statement, General Dynamics Land Systems-Canada said it reviewed its current business environment and work forecast and “concluded that a workforce reduction of 37 salaried positions was necessary.”

The company insisted the layoffs are “part of a normal cycle of work” and have “no connection to recent events that the government of Canada is addressing.”