Canada improves terms of light armored vehicles contract, putting in place a new robust permits review process
April 9, 2020 - Ottawa, Ontario - Global Affairs Canada
The Honourable François-Philippe Champagne, Minister of Foreign Affairs, and the Honourable Bill Morneau, Minister of Finance, today issued the following statement:
"Canadians expect that the contracts negotiated by their government on their behalf are in line with their values and Canadian law.
"In 2014, a contract was signed between the Kingdom of Saudi Arabia and the Canadian Commercial Corporation, a Crown corporation, for the sale of light armoured vehicles manufactured by General Dynamics Land Systems-Canada. This contract is governed exclusively by Saudi law and subject to the Saudi judicial system.
"Under the agreement signed in 2014, the terms of the contract were strictly confidential, preventing the government from discussing the contents with Canadians.
"The government undertook negotiations to improve the terms of the contract. Today, we are announcing that, as a result of these negotiations, we have been able to secure significant improvements to the contract.
"This includes now being able to communicate more transparently with Canadians about certain terms of the contract.
"We can confirm that the cancellation of this $14-billion contract—or even the mere disclosure of any of its terms—could have resulted in billions of dollars in damages to the Government of Canada, with potential damages amounting to the full value of the contract. This would have put the jobs of thousands of Canadians at risk, not only in Southwestern Ontario but also across the entire defence industry supply chain, which includes hundreds of small and medium enterprises.
"Additionally, under the improved agreement, we have ensured that Canadians’ exposure to financial risk will be eliminated where future export permits are delayed or denied if there is an infringement of the permit’s end use assurances—which ensure that the vehicles are used only for the stated purpose.
"In addition, in order to ensure that the government always upholds the highest standards with respect to human rights, we are announcing the creation of an arms-length advisory panel of experts who will review best practices regarding arms exports by state parties to the United Nations Arms Trade Treaty [ATT] to ensure that our system is as robust as possible.
"Canada officially joined the ATT on September 17, 2019. With the passage of Bill C-47, the implementing legislation, Canada now has one of the most robust legal applications of this UN treaty in the world.
"Under our law, Canadian goods cannot be exported where there is a substantial risk that they would be used to commit or to facilitate serious violations of international humanitarian law, international human rights law or serious acts of gender-based violence.
"We need to ensure that we are always ready to strengthen available tools to conduct proper due diligence on all exports, as Canadians expect.
"To that end, we are also announcing that we will spearhead multilateral discussions on means to strengthen international compliance with the ATT, toward the establishment of an international inspection regime.
"Following the conclusion of the review of export permits to Saudi Arabia conducted by officials from Global Affairs Canada—including those related to this contract—we have now begun reviewing permit applications on a case-by-case basis. As always, we will ensure that they comply with the aforementioned legal requirements under Canadian law and the ATT."
Office of the Minister of Foreign Affairs
Media Relations Office
Global Affairs Canada
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