Canada is jettisoning its decades-old image as an international conciliator and defender of human rights, reshaping its foreign policy to try to rake in more trade--including a slice of the burgeoning world arms market.

The government now approves military sales to authoritarian regimes it once blacklisted, has boosted business in China by throwing a state dinner for an architect of the Tiananmen Square massacre and dispatches Prime Minister Jean Chretien around the Pacific Rim to tout Canadian companies.

But the policy shift also has triggered growing controversy among Canadians who see it as a retreat from a national ideal.

“There is a streak as wide as the ocean among Canadians to have an activist, do-good foreign policy,” said J. L. Granatstein, a foreign affairs expert who teaches history at York University in Toronto. “Trade has been seen as crass and running against this idea of Canadian international Boy Scoutism.”


Perhaps the biggest source of controversy is Canada’s eagerness to increase military sales despite growing uneasiness that Western countries are stoking dangerous arms races in the Pacific and the Middle East.

To be sure, Canadian firms--many of which are affiliates of American companies--still are a long way from catching up with the world’s top arms sellers: the United States, Britain, Russia, Germany, China and France.

But military sales by Canadian companies to countries other than the U.S., including some identified by watchdog organizations as chronic human rights abusers, jumped 48% in 1994, the last year for which figures are available, the Foreign Ministry’s export controls division reports. Experts outside the government say the true figures are higher because some equipment sold for civilian use also has military application.

David Webster, a Toronto-based human rights activist, calls the Chretien government’s embrace of weapons sales “one of the great U-turns in the history of the Canadian Parliament.”


Throughout the Cold War, Canada was a North Atlantic Treaty Organization stalwart and a partner of the United States in the defense of North America against the Soviet threat.

But Canada also courted international influence, particularly in the Third World, by projecting itself as a “middle power” with no history of colonialism, an ambivalence about nuclear arms and a generous foreign aid program.

In the post-Cold War global economy, however, Canada has found that such idealism has its price.

With government deficits so large that the country owes more money than its factories, farms and forests produce in a full year and with Quebec separatists gaining in their efforts to dismember the country, Canada’s economy never has fully emerged from the recession of the early ‘90s. About one in 10 Canadian workers remains unemployed.


The only consistent economic growth in recent years has been in exports, which rose 11% last year compared to 2.5% for the economy as a whole.

“Trade can be justified [as a foreign policy objective] because it’s seen as a domestic growth strategy,” said Robert Bothwell, a history professor at the University of Toronto and co-author with Granatstein of a book on Canadian foreign policy.

To take one example, the work force at Saint John Shipbuilding in New Brunswick has dwindled to 1,000 from a high of 3,800 as the company completes work on a $6.88-billion contract to build advanced frigates for the Canadian navy. Eleven of the 12 warships have been delivered, and in the absence of foreign sales, the shipyard, which has been laying keels on the Atlantic Coast since 1923, faces an uncertain future.

With the backing of the government, the Canadian navy has been enlisted in the sales effort. The frigate Calgary recently completed an around-the-world voyage in which, among other tasks, it was showcased for military delegations from India, Singapore, Kuwait and Saudi Arabia, all potential customers for Canadian defense products.


“The Canadian navy is not only showing the flag these days, it’s selling the arms,” said Ken Epps, who monitors Canada’s international military sales for Project Plowshares, a church-supported disarmament think tank in Waterloo, Ontario.

Critics such as Webster and Epps cite with dismay Canada’s policy reversal on trade with Indonesia, which has repressed dissent in East Timor, a neighboring land that Indonesia invaded in 1975 and later annexed. When more than 100 East Timorese demonstrators were killed by government troops in 1991, the Canadian government of then-Prime Minister Brian Mulroney cut off arms sales.

The Chretien administration, elected in October 1993, approved the resumption of defense shipments to Indonesia in 1994, resulting in sales of nearly $1 million worth of military aircraft. Chretien has made two trade-promoting visits to Jakarta in the last 16 months. Overall, Canadian-Indonesian trade was more than $738 million in 1994.

The Foreign Ministry’s export controls division must approve overseas military sales by Canadian-based firms, and official policy calls for especially close review of weapons transfers to countries “under imminent threat of hostilities” or that have “a persistent record of serious violations of human rights.”


But sources inside and outside the government acknowledge that the scrutiny has relaxed since Chretien came to power. Canada recently has approved transactions with several nations singled out by watchdog organizations for persistent human rights abuses, including Pakistan, Algeria, Egypt and Saudi Arabia.

Canadian defense companies generally compete in specialty markets, such as communications equipment or aircraft simulators.

But the biggest factor in the recent surge in overseas arms sales is the success of General Motors of Canada’s diesel division in London, Ontario, a subsidiary of the Detroit-based auto maker. The factory has become a leading supplier of light armored vehicles, claiming 32% of the market outside China and the old Soviet Bloc. GM has sold more than 1,000 of the vehicles to the Saudi Arabian national guard in a transaction arranged through the U.S. Defense Department.

Canada’s foreign policy shift extends well beyond boosting defense industry sales. A government review completed last year formally moved trade to the top of Canada’s overseas agenda, and Chretien personally has set the tone for the realignment with three high-profile trade missions, two to Asia and one to Latin America. A fourth trip, also to Asia, was partly devoted to trade.


On the most recent journey, in January, Chretien, six provincial premiers and more than 250 business executives spent 12 days in India, Pakistan, Indonesia and Malaysia and returned with deals worth $6.4 billion to Canadian companies.

Another similar trade jaunt--Chretien’s first--occurred in November 1994. It went to Beijing and Shanghai. The prime minister raced reporters up the Great Wall and navigated a bicycle through the crowded streets for photographers.

He and his entourage also signed dozens of agreements involving Canadian businesses with the Chinese in enterprises ranging from building gas pipelines and modular housing to processing ginseng root. Canadian exports to China, this country’s fifth-largest trading partner, jumped almost 36% between 1993 and 1994, to almost $1.7 billion.

Premier Li Peng, one of the hard-liners behind the suppression of pro-democracy dissidents in China, returned Chretien’s visit in October. Li was feted by Chretien at a banquet in Montreal, where, the Toronto Globe and Mail reported, the premier threw a behind-the-scenes tantrum at the sight of anti-Chinese demonstrators across the street.


Indeed, while Chretien’s trade emphasis appears to be paying off from an economic viewpoint, the political costs of looking soft on human rights are rising.

On his January trip, the prime minister--who has insisted that he has discussed human rights privately with national leaders--was trailed by Canadian activists who made themselves available to his media entourage.