Canada has real leverage in Saudi arms deal

Since October 2nd the world has been gripped with the brutal and brazen murder of Washington Post journalist and Saudi national Jamal Khashoggi by a Saudi Arabian hit squad. The unspeakable crime took place in the Saudi consulate in Istanbul, Turkey and was almost certainly carried out on the orders of Crown Prince Mohammed bin-Salman (MBS).

Global outrage has led to the German suspension of arms sales to the Kingdom and American congressional threats to do the same, despite President Trump’s extreme reluctance to jeopardize lucrative arms deals in any way.  U.S. legislators are also calling for the resignation of the Crown Prince, described by one Republican Senator as a human “wrecking ball”.

What about Canada? After all, Saudi Arabia is our largest customer for military goods after the USA, due mainly to the $10-billion-plus contract to sell upgraded armoured vehicles to Riyadh, older versions of which have already been deployed in the brutal Saudi war in Yemen.

Prime Minister Trudeau addressed the issue Monday in Question Period:

We have frozen export permits before when we had concerns about their potential misuse and we will not hesitate to do so again….

But early Tuesday morning, 23 October, he appeared to walk that statement back in an interview on CBC Radio’s Metro Morning with host Matt Galloway:

The contract signed by the previous government, by Stephen Harper, makes it very difficult to suspend or leave that contract. We are looking at a number of things, but it is a difficult contract. I actually can’t go into it, because part of the deal on this contract is not talking about this contract, and it’s one of the binds that we are left in because of the way that the contract was negotiated.

The Prime Minister further explained that suspension of the export permits could trigger a billion-dollar cancellation penalty.

There are two issues here: (1) whether Canada has the legal authority to suspend the export permits or cancel the contract outright and (2) possible contractual penalties should they do so.

There is no doubt that Canada has full legal authority under the Export and Import Permits Act  to cancel arms shipments to the Saudi Royal family in the face of gross human rights violations.

But what about the alleged penalties Canada could face?

What the Prime Minister seems not to appreciate is that Canada holds virtually all the cards here.  Saudi Arabia is extremely dependent on Canadian armoured vehicles for both internal security and the brutal war in Yemen.  Even if they do find replacement vehicles, the acquisition, training and deployment process will take years, during which time the Saudis would not have access to Canadian parts or servicing, rendering their existing armoured vehicle fleet less and less reliable.

And then there is Canada’s ability to impose sanctions on Saudi entities under the so-called Canadian Magnitsky Law, passed in 2017 to give Canada more tools to address “gross violations of internationally recognized human rights”.

Finally, there is the very real possibility that the penalty clause would not even be upheld by a Canadian court as contrary to both public policy and Canadian law.

Some of this would undoubtedly be breaking new legal ground.  But isn’t such a proactive approach infinitely better than cowering behind the secret terms of what has become an utterly unconscionable deal?   – Peggy Mason, RI President


Photo credit: Youtube image (Crown Prince MBS and Jamal Khashoggi)

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