The Canadian government is lifting a suspension on arms exports to Saudi Arabia and has renegotiated a controversial multibillion-dollar contract that will see an Ontario-based company sell light armoured vehicles (LAVs) to Riyadh.

The "significant improvements" to the contract would secure the jobs of thousands of Canadians, "not only in Southwestern Ontario but also across the entire defence industry supply chain, which includes hundreds of small and medium enterprises," Foreign Minister Francois-Philippe Champagne and Minister of Finance Bill Morneau said in a statement on Thursday.

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In December 2018, Canadian Prime Minister Justin Trudeau maintained that Canada "was looking for a way out of the Saudi arms deal", following the murder of Saudi journalist Jamal Khashoggi at the Saudi consulate in Istanbul.

A month earlier the Liberal government suspended approvals of new arms export permits for Saudi Arabia pending an indefinite review.

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The 14 billion Canadian dollar ($10bn) deal to export LAVs made by the Ontario-based General Dynamics Land Systems to Saudi Arabia was brokered in 2014 by the previous Conservative government.

Trudeau's Liberal government subsequently gave the final approval for the deal following the 2015 election.

The ministers added in their statement that as a state party to the United Nations Arms Trade Treaty, Canada's goods cannot be exported where there is a "substantial risk" that they would be used in violating human rights and humanitarian law.

"We have now begun reviewing permit applications on a case-by-case basis," the statement said.

'Reopen the weapons exports' floodgates'

Academics and activists have long pressured Ottawa to cancel the exports of Canadian-made LAVs to Saudi Arabia, citing the killing of Khashoggi and Saudi Arabia's involvement in the Yemen war.

Campaigners have said there is credible evidence Canadian arms are being used by the Saudi-UAE led coalition in the long-running conflict in Yemen.

Anthony Fenton, a PhD candidate in political science at Toronto's York University who studies Canada's relations with Gulf Cooperation Council countries, told Al Jazeera that the announcement came as no surprise.

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"At every opportunity since the diplomatic spat erupted in August 2018, Trudeau's government has been trying behind the scenes to 'normalise' relations with Saudi Arabia, in spite of their horrendous human rights record and leading role in the brutal war in Yemen," Fenton said, referring to the diplomatic dispute that erupted in August 2018 after Ottawa criticised Riyadh over its crackdown on women's rights activists.

"Now, under the cover of the chaos brought on by the global pandemic, they've elected to reopen the weapons exports' floodgates, placating Canada's arms industry, while likely calculating little pushback from the media or public."

Cesar Jaramillo, executive director of Canadian peace research institute Project Ploughshares, told Al Jazeera that while there may be an economic price to pay to comply with domestic and international arms control regulations, the humanitarian cost of an unregulated arms trade is much higher.

"Each day that Canada continues arms exports to Saudi Arabia, its arms control and humanitarian credentials continue to crumble," Jaramillo said.

"Canada has given greater credence to Saudi officials than to authoritative human rights organisations; it has whitewashed violent security crackdowns by the Saudi regime involving Canadian equipment, in which scores of civilians have been killed; it has dismissed or ignored highly credible links between the state of Saudi Arabia and the assassination of Jamal Khashoggi.

"And it has done all this while claiming to be a beacon for human rights, feminism and a rules-based international order," Jaramillo said.