Trudeau says it will cost $1B to leave arms deal with Saudi Arabia amid pressure to sanction regime

Faced with mounting pressure to react to the killing of dissident journalist Jamal Khashoggi by Saudi operatives, Prime Minister Justin Trudeau revealed a financial hurdle to canceling an already contentious arms deal with the powerful kingdom.

That deal — to sell $15-billion worth of Canadian-made light armoured vehicles to Saudi Arabia — comes with a $1-billion cost if canceled, the prime minister said.

“The contract signed by the previous government, by Stephen Harper, makes it very difficult to suspend or leave that contract,” said Trudeau on CBC Metro Morning on Tuesday. “We are looking at a number of things, but it is a difficult contract.”

He described the whole situation as “incredibly frustrating.”

“I do not want to leave Canadians holding a billion-dollar bill because we are trying to move forward on doing the right thing, so we are navigating this very carefully and that’s pretty much all I can say,” Trudeau said. In a separate interview with Ottawa radio station 1310 News, Trudeau said he did not want Canadians “forking over billions of dollars to Saudi Arabia because we’re standing up for human rights.”

The controversial 14-year-deal, brokered by Harper’s Conservatives but given a final green light by Trudeau’s Liberals, committed to the sale of hundreds of weaponized light-armoured vehicles (LAVs).

Trudeau’s comments come a day after he said his governments would be willing to freeze exports of the LAVs, facing mounting political pressure to follow in the footsteps of Germany, which has frozen all arms exports to the kingdom.

Unlike the U.S., which is considering sanctions under the Magnitsky Act, Ottawa hasn’t made any commitments to bringing in sanctions against Riyadh, saying it will wait for the results of an investigation.

On Wednesday, Saudi Crown Prince Mohammed bin Salman denounced the murder as a “heinous crime,” publicly distancing himself from the Saudi men, including some of his own aides, who have been implicated in the killing, stressing that Turkey and Saudi Arabia were working together to bring them to justice.

“The crime was really painful to all Saudis and I believe it is painful to every human in the world,” he said in Arabic. “It is a heinous crime that cannot be justified.”

With their initial explanation quickly unravelling, the Saudis have now conceded that Jamal Khashoggi was killed at the country’s consulate in Istanbul. He disappeared on Oct. 2 after going inside to get paperwork so he could marry his Turkish fiance.

Turkish officials and media alleged a few days later that the Washington Post columnist, who had been critical of Saudi Crown Prince Mohammed bin Salman, was killed and dismembered by 15-person Saudi team, who flew to Riyadh right before Khashoggi’s arrival. They also allege that the Saudis used a body double, dressing him up in Khashoggi’s clothing and getting him to leave the consulate, to cover up the murder.

After initially claiming that Khashoggi left the consulate shortly after he arrived, Saudi Arabia eventually admitted that he died at the consulate, but that he was killed in a fistfight, and that 18 Saudi nationals had been arrested and two top intelligence officials were fired as a result of their investigation.

“I don’t expect the deal to be cancelled,” said University of Ottawa professor and former defense analyst Thomas Juneau. “I would be surprised if the government cancelled the deal.”

The details of the deal between Ottawa and Riyadh have never been public, so it’s unclear what stage the contract is at. In March, CBC reported that the deal involved 928 modern light armoured vehicles, known as the LAV 6, and that delivery was scheduled to begin at the start of 2017.

We don’t know how many have already been delivered, but “The closer you are to the end, the more irrelevant it is to cancel the deal,” said Juneau.

He added that Trudeau’s comments don’t necessarily mean that the fine is $1 billion. The cost he’s referring to could also mean lost jobs.

“Primary jobs — people actually building the labs — but also secondary jobs because of the money gets erased out of the economy, so when he says billion dollar cost to Canada, we don’t know what that actually implies.”

It’s why the Liberals agreed to uphold the deal when they came into power, he argued, adding that it’s also why the NDP had been relatively quiet in its opposition to the deal.

“It’s cynical, it’s cold, but that’s how it is… that job argument, politically, weighs a lot.”

Cover image of Prime Minister Justin Trudeau in Montreal, Wednesday, August 8, 2018. (Graham Hughes/The Canadian Press)