OTTAWA—The government of Canada would be on the hook for a multibillion-dollar cancellation penalty if it were to break a controversial deal to sell light-armoured vehicles to Saudi Arabia under the contract signed by the previous Conservative government, the Star has learned.

The onerous price tag for cancelling might help explain the resistance of the Liberal government to growing calls by critics to cancel the $14.8-billion contract reached by the Tories.

However, it also raises questions about whether such a heavy penalty effectively guts the ability of any future government to oversee any human rights violations that could result from deployment of the weaponized vehicles known as LAVs.

“I’m not going to comment on the details of the contract. That’s for the current Liberal government to respond to,” said former Conservative international trade minister Ed Fast, who worked on the deal along with Stephen Harper’s foreign affairs minister, John Baird.

“All I will say is it is a very significant-sized contract. It has very significant benefits to Canada’s economy and I will certainly acknowledge that a termination of the contact unilaterally by one party will have very significant consequences,” Fast said in an interview with the Star.

Fast said he would not discuss “what the actual damages might be for termination of the contract,” adding “there is a process within government that provides for a review under our export/imports regime to ensure that exports serve not only the national interest, but more specifically Canada’s stand on defending human rights.”

Fast said the Canadian government gave the 14-year deal “a sovereign guarantee” through the Canada Commercial Corp., a Crown corporation that acted as not only a broker but the contracting party for General Dynamics Land Systems with Saudi Arabia.

A source who spoke to the Star on condition of anonymity said the cancellation penalty is part of the contract reached after Harper personally sought support from Saudi Arabia’s ambassador to Canada to secure the 14-year deal to deliver weaponized vehicles — a deal that was otherwise looking certain to go to Germany.

Since the contract was first announced in 2014, secrecy has surrounded many details of the contract, such as the number of LAVs to be delivered.

Fast acknowledged previous reports that Harper had written a letter to the Saudi king.

“I can say that the Canadian Commercial Corporation was a key player in concluding that contract and we won that contract over competing bids from Germany and France,” Fast said. Asked if Germany was the preferred bidder at the time, Fast would say only that “it went to Canada.”

The Star requested an interview with the Saudi Arabian ambassador in Ottawa but had not yet received a reply.

Jason Hann, a spokesman for the Canada Commercial Corp., declined the Star’s request for an interview, saying in an email response to specific questions that “details related to all provisions of the contract to which you’re referring are commercially confidential and cannot be released.”

Global Affairs spokesperson Rachna Mishra replied to questions sent to Stéphane Dion’s office, saying “For reasons of commercial confidentiality, the department does not comment on ongoing contracts between Canadian companies and other countries.”

Baird, reached in Europe, declined to discuss any details about the deal, any cancellation penalty or about Harper’s personal interventions to secure the contract.

Baird said he and Fast “worked very hard to make this contract happen,” and said the Liberals should “absolutely not” halt it.

“This is good for the economy of Canada, but it is also good for the security of Canada because we don’t want ISIS moving into Saudi Arabia,” Baird said.

“In fairness to the Liberals,” Baird said, “this was successfully negotiated by General Dynamics Land Systems under the previous Conservative government and you shouldn’t blame the Liberal government for that. Contracts should be sacrosanct, and the new government is honouring that and it’s the right thing to do.”

Fast’s and Baird’s views are in sharp contrast to the position taken by the Conservatives’ current foreign affairs critic, Tony Clement, who said information now available about Saudi Arabia’s actions in Yemen wasn’t available at the time the deal was struck. He said the deal should be shelved.

When Harper announced the $14.8-billion sale in 2014, he and land systems officials touted the 3,000 jobs to be created — mostly in London, Ont. — and the importance of Canada working with Saudi Arabia, a key regional security ally in the Middle East.

The Liberals did not oppose the sale during last year’s federal election, with a campaigning Trudeau at one point calling it a commercial contract for a bunch of “jeeps.”

Once in power, foreign affairs minister Dion signed off on export permits in April to approve the shipment of the LAVs based on an assessment the Saudis would not use them against its civilian population but would use them to defend Canada’s common security interests with the desert kingdom.

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But the Liberals have come under increasing pressure to respond to concerns about the abysmal human rights record of the Saudi regime which quashes civil dissent within its own borders, denies basic rights to women, authorized a mass beheading of 47 people last January, and moved beyond its own borders to quash an uprising in nearby Yemen, led by Houthi rebels allied with Saudi Arabia’s regional rival, Iran.

On Thursday in the Commons the NDP demanded to know why the government would not create a committee to oversee arms exports to guard against human rights abuses. Pam Goldsmith-Jones, Dion’s parliamentary secretary, said “the government takes every opportunity to raise critical issues with senior Saudi officials with respect to humanitarian issues, consular issues, and human rights, as the minister did in his visit to the region last week.”

Asked later how the government intends to monitor whether the LAVs would end up being used by Yemeni military forces against civilians, she said, “We’re watching that situation very closely. Of course, as you know, with regard to our permit process, monitoring the human rights situation is of utmost importance, so that’s all I can tell you at this time.”

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