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Canadian company warns Trudeau against cancelling $12bn Saudi arms deal

General Dynamics Land Systems-Canada says cancelling shipment to Riyadh would force Canada to pay 'billions of dollars of liability'
Justin Trudeau said on Sunday he's looking for a way out of the deal with Riyadh (Reuters/File photo)

MONTREAL, Canada - A Canadian company shipping weapons to Saudi Arabia has warned Ottawa against cancelling the lucrative arms contract, a day after Prime Minister Justin Trudeau said he was looking for ways out of the deal.

General Dynamics Land Systems-Canada said on Monday that Canada "would incur billions of dollars of liability" should it unilaterally cancel the contract, Reuters reported.

"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 company said in a statement, according to Reuters.

The warning comes a day after Trudeau said his government was looking into ways to cancel the deal, amid heightened pressure to stop doing business with Saudi Arabia in the aftermath of the murder of journalist Jamal Khashoggi and the ongoing Saudi-led war in Yemen.

“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 said on CTV News programme Question Period on Sunday.

Trudeau's predecessor, Stephen Harper, brokered the $12bn agreement ($15bn Canadian) to ship Canadian-made, light-armoured vehicles to Riyadh in 2014 and the Trudeau government later gave the deal its own stamp of approval.

Despite all the talk about how difficult it is for Canada to halt arms exports to Saudi Arabia, the Canadian government has always had the sovereign prerogative to stop them any day it wanted to - including today

- Cesar Jaramillo, Project Ploughshares

Human rights groups have for years called on Canada to cancel the agreement, arguing that the weapons could be used in human rights abuses inside the Gulf kingdom, as well as in Yemen.

Canadian weapons export controls require Ottawa to closely monitor exports to countries with a persistent record of human rights abuses unless the government can demonstrate “that there is no reasonable risk that the goods might be used against the civilian population”.

However, the Trudeau government has so far resisted attempts to alter or suspend the agreement with Saudi Arabia, with Trudeau himself saying last month that cancelling the deal would force Canadians to foot a billion-dollar bill.

Cesar Jaramillo, executive director of anti-war group Project Ploughshares, told Middle East Eye on Monday that he welcomed Trudeau's comments in principle.

However, he said: "Ottawa’s handling of this file thus far makes it clear that the priority for the Canadian government has always been to maintain arms shipments to Saudi Arabia, not to scrap them."

He said Canadian officials, including Trudeau himself, have failed to follow through on past statements that Canada would not hesitate to freeze exports in response to Khashoggi's murder.

"The reality is that Canadian arms are still being shipped," Jaramillo said.

"It is important to remember that despite all the talk about how difficult it is for Canada to halt arms exports to Saudi Arabia, the Canadian government has always had the sovereign prerogative to stop them any day it wanted to - including today."