Open this photo in gallery Eight Light-armoured vehicles, parked temporarily, seen here near Rothesay Avenue, at the corner of Ashburn Lake Road on Saint John's east side on Sept. 18, 2019. Joseph Tunney

The Canadian government is lifting a moratorium on approving new permits for military exports to Saudi Arabia after renegotiating some terms of a controversial $14-billion deal to sell light-armoured vehicles to Riyadh.

The government said Thursday it would begin reviewing export permit applications on a case-by-case basis, ending a ban on new permits for shipments of controlled goods to Saudi Arabia imposed in the fall of 2018. Controlled goods include military equipment such as light-armoured vehicles (LAVs) made by General Dynamics Land Systems in London, Ont., under a long-term contract brokered by the Canadian government.

The federal government also revealed for the first time that it would have been on the hook for up to $14-billion if it had cancelled the LAV contract or disclosed its terms to Canadians.

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In the fall of 2018, after news broke that the Saudi government had ordered the murder of dissident journalist Jamal Khashoggi, the Trudeau government announced a review of all Canada’s existing arms sales to Saudi Arabia. Ottawa also put a moratorium on new export permits for shipments of controlled goods destined for Saudi Arabia. These measures were made as Riyadh was facing mounting condemnation for the costly war it is waging in neighbouring Yemen.

This November, 2018, ban on new permits did not affect already-approved permits, so this meant shipments of greenlit military exports continued.

In late 2018, Mr. Trudeau even publicly talked about trying to find a way to end shipments of armoured vehicles to Saudi Arabia.

On Thursday, however, Foreign Affairs Minister François-Philippe Champagne and Finance Minister Bill Morneau announced the suspension of approval of new permits for Saudi Arabia is now lifted. They cited a government review made public last September to tell Ottawa it had found no credible evidence linking Canadian exports of military equipment or other controlled goods to Saudi Arabian human-rights violations. The same report also advised the government that 48 export permits were ready to be signed should the government lift its moratorium.

"Following the conclusion of the review of export permits to Saudi Arabia conducted by officials from Global Affairs Canada … we have now begun reviewing permit applications on a case-by-case basis,” Mr. Champagne announced, adding later that there would be no “blank cheque” approvals.

“As always, we will ensure that they comply with the aforementioned legal requirements under Canadian law and the [global Arms Trade Treaty].”

Mr. Champagne said General Dynamics will require extensions of export permits to complete the $14-billion deal with Saudi Arabia, a transaction he said is now about 50-per-cent complete. That’s one way this resumption of permit approvals could help the company.

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“The company will have to submit [applications for] extensions of existing permits to be able to continue to perform under this contract,” he told reporters.

The General Dynamics factory in London is still producing LAVs. “Following critical infrastructure and essential service guidelines of the governments of Canada and Ontario we remain open and operational,” spokesman Doug Wilson-Hodge said in an e-mail.

Mr. Champagne and Mr. Morneau also announced that after a renegotiation of terms with Saudi Arabia, the Canadian government is able to be more transparent about the contract and can reveal it would face penalties of up to $14-billion, or the full value of the agreement, if it were to cancel or discuss terms of the LAV deal. The 2014 deal was signed by the Harper government but it was the Trudeau government that gave the crucial approval of the first export permits for the LAVs.

The ministers said negotiations have also secured a change ensuring that Ottawa’s “exposure to financial risk will be eliminated where future export permits are delayed or denied" if it’s ever forced to suspend, cancel or deny export permits because the LAVs are found to be used for reasons other than their defensive purpose.

The announcement Thursday was made as Canada struggles with an economic crisis caused by COVID-19, but Mr. Champagne denied the timing of Ottawa’s move on export permits to Saudi Arabia was linked to the pandemic or the volatility in oil prices related to a feud between Moscow and Riyadh.

He said he’s informing Canadians about developments because the Saudis signed the amendments to the LAV contract March 31.

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The Foreign Affairs Minister rejected the notion that this represents an improvement in Ottawa-Saudi relations. “I am not sure about that. Suffice to say the human-rights’ record of Saudi Arabia remains troubling, particularly when it comes to social and political rights and women’s rights, so we will continue to advocate for human rights.”

Under Canadian law, Ottawa must deny export permits “if there is a substantial risk that the export would result in a serious violation of human rights.”

Arms control advocate Cesar Jaramillo, with Project Ploughshares, criticized the removal of the moratorium on new export permits.

“It is utterly disappointing that only days after Canada endorsed the UN Secretary-General’s call for a global ceasefire in the context of the COVID-19 pandemic, Canada decides to continue arming one of the world’s worst human-rights pariahs, who is also the chief instigator of the catastrophic humanitarian crisis in neighbouring Yemen – now in its fifth year,” Mr. Jaramillo said.

“It is hard to understand how or why the prospect of economic penalties would override the Canadian government’s obligation to uphold the law, including as it relates to denials of export permits when there is a clear and present risk of misuse, as is undoubtedly the case with Saudi Arabia.”

Ottawa announced it would create an advisory panel of experts to help strengthen Canada’s arms export approval process and will push for an international inspection regime for arms sales.

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This announcement was made seven months after Global Affairs told the Trudeau government it didn’t believe that Canadian exports of military gear to Saudi Arabia were being used unlawfully. This review also warned the government that a moratorium on approving exports of this sort was further damaging already depressed trade relations with the desert kingdom. In a Sept. 17, 2019, memo published on Global Affairs’ website, public servants told the government that while Saudi Arabia’s human-rights record “remains problematic,” with unlawful killings, forced disappearances and torture, Ottawa has no information or evidence linking Canadian military exports to unlawful conduct.

NDP foreign affairs critic Jack Harris panned the decision to reopen export permits. “The Conservatives started this but the fact remains, the Liberal government is sending armoured vehicles to an undemocratic authoritarian regime with a terrible human-rights record. This contract should have been cancelled. Period.”

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