Canadian PM’s comments harden in tone after maintaining there would be huge financial penalty if contract is scrapped.

Canadian Prime Minister Justin Trudeau has said for the first time that his Liberal government is looking for a way out of a multibillion-dollar arms deal with Saudi Arabia.

Speaking in a TV interview that aired on Sunday, the comments represented a notable hardening in tone from Trudeau, who previously said there would be huge penalties for scrapping the $13bn agreement for armoured vehicles made by the Canadian unit of General Dynamics Corp.

Last month, Trudeau said Canada could freeze the relevant export permits if it concluded the weapons had been misused.

“We are engaged with the export permits to try and see if there is a way of no longer exporting these vehicles to Saudi Arabia,” Trudeau told CTV. He did not give further details.

Political opponents, citing the killing of Saudi journalist Jamal Khashoggi and Saudi Arabia’s involvement in the Yemen war, insist Trudeau should end the General Dynamics deal, which was negotiated by the previous Conservative government.

In October Trudeau maintained that he was reluctant to cancel the controversial contract with Saudi Arabia in the wake of the Khashoggi case as it would cost Canada C$1bn ($747m).

Trudeau said that the “difficult” contract was made in a way that “makes it very difficult to suspend or leave the contract”.

“I do not want to leave Canadians holding a billion-dollar bill because we’re trying to move forward on doing the right thing,” Trudeau said in October. “So we’re navigating this very carefully.”

On Monday, the Canadian arm of General Dynamics warned Ottawa that the federal government would incur “billions of dollars of liability” by unilaterally scrapping the agreement.

“Terminating the contract would have a significant negative impact on our highly skilled employees, our supply chain across Canada, and the Canadian defence sector broadly,” the company said in a statement.

‘Immoral and unethical’

Relations between Ottawa and Riyadh have been tense since a diplomatic dispute over human rights earlier this year. Ottawa says it has been consulting allies on what steps to take after Khashoggi was killed inside the Saudi consulate in Istanbul.

“The murder of a journalist is absolutely unacceptable and that’s why Canada from the very beginning had been demanding answers and solutions on that,” said Trudeau.

Human rights groups have been issuing letters to Trudeau since 2016, asking him to cancel the controversial arms deal with Saudi Arabia.

“To provide such a large supply of lethal weapons to a regime with such an appalling record of human rights abuses is immoral and unethical. The spirit and letter of both domestic export controls and international law support this view,” said the letter signed by representatives of human rights organisations such as Amnesty International.

“We believe the regime’s integrity has been utterly compromised with the government’s decision to proceed with the largest arms sale in Canadian history to one of the world’s worst human rights violators.”

There is a “reasonable risk” that Canadian-made military hardware is being used against civilians, the letter noted, considering Saudi Arabia’s “abysmal and worsening human rights record, both within Saudi Arabia and in neighbouring Yemen”.