'No final decision yet' on Saudi arms contract: MP

London North Centre Liberal MP Peter Fragiskatos confirmed the government is reviewing an arms export contract with Saudi Arabia and that "all options are on the table, including ones that would preserve good-paying jobs" at the General Dynamics Land Systems plant in London, Ont.

Thousands of London jobs are rolled up in providing the kingdom with light armoured vehicles

London North Centre Liberal MP Peter Fragiskatos introduced a private member's bill in 2016 that would make torture perpetrated by citizens a separate crime. (Kate Dubinski/CBC News)

London North Centre Liberal MP Peter Fragiskatos confirmed the federal government is reviewing arms exports with Saudi Arabia and that "all options are on the table" regarding a Canadian government contract that enlists workers at General Dynamics Land Systems in London, Ont., to build light armoured vehicles for the kingdom.

But the MP couldn't say what those options are or when a decision about the future of a $13-billion contract with the Saudi government would be made. 

"No final decision on the contract has been made," Fragiskatos told reporters.

"The final decision on this matter will rest with the prime minister and the foreign minister. As a local member of Parliament, I fully recognize the importance of General Dynamics to our local economy and to the defence industry within Canada. 

"I am also keenly aware that supply chain partners play a vital role in our community's economic success." 

Critics say the Canadian government should scrap the deal because of Saudi involvement in the war in Yemen and the killing of journalist Jamal Khashoggi. 

Your listeners that work for General Dynamics in the city.. ..should be very worried.- David Perry, Canadian Institute for Global Affairs

On Sunday, Prime Minister Justin Trudeau told CTV the Liberal government may pull out of the lucrative arms-making contract with Saudi Arabia altogether. 

David Perry, Vice-President and Senior Analyst for the Canadian Institute for Global Affairs, a think tank based in Calgary, told CBC Radio's London Morning on Tuesday that Trudeau's most recent comments are the "strongest language yet" and cast a long shadow over London's military manufacturing industry. 

"I would certainly think that your listeners that work for General Dynamics in the city or one of its related firms that they should be very worried," he said. "[Trudeau is] sending a clear signal that the government is, to his use words 'is looking for a way out of it.'"

The $13-billion contract was negotiated by the Conservative government under former Prime Minister Stephen Harper. It supplies the kingdom with LAVs built by London, Ont.-based General Dynamic Land Systems-Canada. The contract means employment for thousands of people directly and indirectly in the city. 

While Trudeau has mused publicly about potentially ending the contract, he has given no timeline or details about what would take place if it were to happen. 

Still, according to Perry, the prime minister's words alone are enough to shake very foundations of London's arms-making industry.

"If were a member of the General Dynamics corporate board which is US-based right now, I don't think I would have much confidence that Canada is a market that would have much predictability," Perry said. 

Saudi forces in a graduation ceremony in Riyadh. Saudi Arabia is widely criticized for its human-rights practices. (FAISAL AL NASSER/REUTERS)

Saudi Arabia faces possible international repercussions over the assassination of journalist Jamal Khashoggi. 

Canada and many of its allies are trying to figure out what kind of diplomatic and economic pressure can be applied to Saudi Arabia to make it clear that the killing of the dissident journalist inside the Saudi Consulate in Turkey is unacceptable.

Human rights advocates have said Canada should not be supplying the Saudis with military vehicles that could assist in its ongoing military intervention in neighbouring Yemen, where estimates put half the population facing starvation.

The Prime Minister is talking publicly about cancelling a major arms agreement with Saudi Arabia. How complicated would it be to rip up a deal that keeps so many Londoners employed? We ask David Perry, the vice president of the Canadian Global Affairs Institute. 9:07

Perry said, while Saudi Arabia's actions in the Yemeni conflict have been brutal, there is no direct evidence London-made military equipment is being used by the kingdom against civilians. 

"There hasn't been any credible reports to link the human rights abuses in Yemen to the products being made in London," he said. 

Perry said "it's pretty much impossible for outsiders to say" what penalties Canada could incur if it abruptly ended the deal with Saudi Arabia because the details of the deal between the Canadian and Saudi Arabian governments and General Dynamics Land Systems-Canada have not been made public. 

Mayor working with feds

General Dynamics Land Systems-Canada released a written statement Tuesday, saying it will continue to build light armoured vehicles to order. 

"We are continuing to execute our valid and binding contract," wrote Doug Wilson-Hodge in an email to CBC News Tuesday. 

"Were Canada to unilaterally terminate the contract, Canada would incur billions of dollars of liability to General Dynamics Land Systems-Canada."

A statement issued Tuesday by the office of London Mayor Ed Holder said he has been in contact with the federal government and has been told that no decision has been made by the prime minister's office. 

"I am working together with the federal government to find a solution that keeps jobs in London," he wrote.