OTTAWA—Foreign Affairs Minister Stéphane Dion insists Canada still has leverage over the controversial contract to sell light armoured vehicles to Saudi Arabia despite the Star’s revelation that the federal government could be on the hook for a multibillion cancellation penalty.

“Each time you break a contract, there is always the danger of penalties,” Dion said Monday. “I always said that, but this is not the issue, because we’re not — we’ll respect the contract.”

At the same time, Dion insisted Canada’s hands are not tied when it comes to ensuring “that the military equipment that any Canadian company is selling abroad is not used against human rights and the interests of Canada and our allies.”

Dion said the arms “export permits allow Canada to be sure that military equipment . . . sold by Canadian companies is not misused by the country that received them.”

The Star on Saturday reported the cancellation penalty is in the multibillion-dollar range, under the contract signed by the previous Conservative government.

Cesar Jaramillo, executive director of Project Ploughshares, said his greater concern is Dion has made up his mind that the contract will continue despite valid questions about the human rights implications of proceeding with the deal.

In signing export permits for the vehicles, said Jaramillo, Canada has already given up “leverage.”

“They speak of evidence, but the threshold (for export approval) is neither certainty nor evidence, it is reasonable risk” the weaponized vehicles might be used against unarmed populations, he said. “The practical difference is if you use ‘evidence’ — this is something that takes place after the exports have taken place and after the human rights violations have occurred.”

Project Ploughshares joined Amnesty International and other groups in writing an http://ploughshares.ca/pl_publications/human-rights-development-and-arms-control-groups-call-on-prime-minister-justin-trudeau-to-stop-the-sale-of-light-armoured-vehicles-to-saudi-arabia/ open letter END to the Liberal government asking it to halt the sale on the grounds that there is “reasonable risk — the threshold for Canadian export controls — that Canadian-made goods will be used against civilians by Saudi Arabia.”

The sale of an unspecified number of weaponized vehicles, to be built by General Dynamic Land Systems in London, Ont., was signed between Saudi Arabia and the Canada Commercial Corporation, a Crown corporation.

A briefing note for Finance Minister Bill Morneau, released under Access to Information and shared with the Star on condition the source not be identified, states clearly there is a question of liability for the government.

While the international trade minister has direct responsibility to Parliament for the Crown corporation that is the contracting party for Canadian suppliers, the document flags to the finance minister that it is he who approves the corporation’s borrowing plan and also has a direct role in approving CCC’s involvement in large capital projects.

The document, which contains redactions, identifies CCC’s signing of “a record $14.3-billion contact with Saudi Arabia for the sale of light armoured vehicles produced by General Dynamics Land Systems, and says “fees from transactions like this help maintain CCC’s financial viability.”

Liberal MP John McKay, the parliamentary secretary to the defence minister, said in an interview that if there were any move to stop the Saudi contract it would have to involve “very, very serious consideration.”

“There’s reputational damage, there’s financial damage, there’s employment damage and at the end of the day what did you actually accomplish? It’s not if the Saudis wouldn’t be able to buy LAVs. They can buy LAVs. So in an ideal world you wouldn’t have to be discussing this but this is not an ideal world.”

Members of the former Conservative government adamantly defended the contract in interviews with the Star last week. On Monday, Conservative foreign affairs critic Tony Clement clarified previous statements he’d made questioning whether the Saudi regime’s cross-border military efforts in Yemen should result in the contract’s cancellation.

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Clement said “if the situation on the ground is the same as when we signed the contract, ie., that the LAVs are going to be used against terrorists, I’m in favour of implementing the contract. If there’s something different on the ground that indicates that the LAVs would be used to crush legitimate internal dissent that’s a different story.”

He now says the issue in Yemen is more complicated than when he suggested the contract should be shelved.

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