General Dynamics Canada wins $10B deal with Saudi Arabia

The federal government has helped secure a $10-billion US deal for a Canadian company to sell armoured vehicles to Saudia Arabia, a country widely condemned for its human rights abuses.

Will supply armoured vehicles, equipment, and training over 14 years

Canadian soldiers are shown in an upgraded light armoured vehicle unveiled at a news conference at a General Dynamics facility in London, Ont., on Jan. 24, 2012. General Dynamics has won a $10-billion US deal to provide armoured vehicles to Saudi Arabia. (Mark Spowart/Canadian Press)

The federal government has helped secure a $10-billion US deal for a Canadian company to sell armoured vehicles to Saudia Arabia, a country widely condemned for its human rights abuses.

The deal was announced today by International Trade Minister Ed Fast at the London, Ont., plant of General Dynamics Land Systems.

The Canadian Commercial Corporation, the government's international contracting agency, helped secure the deal. The organization said the Saudi government wouldn't consent to disclose the number of heavy armoured fighting vehicles, ancilliary equipment, training and support services included.

The company, known by its acronym GDLS, is the manufacturer of the LAV III armoured vehicle Canada used in Afghanistan. It also makes similar Stryker armoured vehicles for the United States and bid with a larger, heavier model in the recently cancelled Canadian procurement of heavy armoured personnel carriers that would have been worth $2 billion for 108 vehicles, plus training and maintenance.

Neither the Canadian government nor GDLS has been so far willing to say how many of the sophisticated weapons systems will be built for the government of Saudi Arabia, but a $10-billion US deal could buy many hundreds of vehicles.

Women's rights violations

Human Rights Watch in its 2014 report alleged the government of Saudi Arabia remains a serial abuser of human rights.

"Saudi Arabia stepped up arrests, trials, and convictions of peaceful dissidents, and forcibly dispersed peaceful demonstrations by citizens in 2013," the report said.

"Authorities continued to violate the rights of nine million Saudi women and girls and nine million foreign workers ... As in past years, authorities subjected thousands of people to unfair trials and arbitrary detention."

Saudi Arabia permits beheading and stoning as forms of criminal punishment for murder and rape, alongside social crimes such as adultery. Homosexual acts are also punishable by death, flogging and imprisonment, as is drug use. Saudi Arabia is also regularly condemned for its treatment of women, who will earn the right to vote in 2015, but who will still be disallowed from driving cars — or armoured vehicles, for that matter. 

In a statement today, London, Ont., Conservative MP Susan Truppe praised the deal. Truppe, who is also the parliamentary secretary for the Status of Women, said the deal proved the Conservative government was acting on job creation and not just spouting empty rhetoric. 

"I am thrilled that our government has announced that London will be the primary beneficiary of the largest advanced manufacturing export win in our nation’s history," she said.

The government and GDLS say the Saudi deal will create and sustain more than 3,000 jobs a year for 14 years and will benefit 500 Canadian companies. Its value could climb to nearly $14 billion if all options are exercised. 

Delivery of the first vehicles is expected in 2016.

'Important partner'

In a statement, Trade Minister Ed Fast's spokesman Rudy Husny defended the deal with Saudi Arabia.

"Saudi Arabia is an important partner for Canada. It has significant regional and global influence, and plays a leadership role among Arab countries on key regional issues, including Syria and Iran," Husny wrote.

"We will continue to engage with Saudi Arabia on a range of issues including regional security and human rights."

Husny said Canada has strict rules governing arms exports and all deals are rigorously assessed against those standards.

"Further, Canada won these jobs over rival bids from our western allies Germany and France. We supported this agreement to bring these jobs to Canada."

Canada's arms export laws prevent the sale of weapons to countries that "pose a threat to Canada and its allies, that are involved in or under imminent threat of hostilities, that are under United Nations Security Council sanctions; or whose governments have a persistent record of serious violations of the human rights of their citizens."

The last provision includes an exemption for countries where "it can be demonstrated that there is no reasonable risk that the goods might be used against the civilian population."

The contract with the Saudis follows an agreement last year that saw General Dynamics win a $65.3-million US contract with the Colombian government.

The Colombian Ministry of National Defence signed a deal to buy 24 light armoured vehicles from General Dynamics.

The company also signed a $24-million US deal last year to produce 13 light armoured vehicles for the U.S. Marine Corps.

With files from The Canadian Press