New facts confirm unprecedented size of Canadian arms sale to Saudi Arabia

Conventional Weapons, News

Project Ploughshares has obtained official data that for the first time reveals the exact value of recently awarded multiyear contracts for Canada to supply Saudi Arabia with military armoured vehicles. Information obtained from the Canadian Commercial Corporation (CCC) under an Access to Information request shows that two contracts totalling $14.8-billion were awarded by the CCC to General Dynamics Land Systems Canada of London, Ontario during the 2013-14 fiscal year.

These contracts are unprecedented in the history of the CCC, a crown corporation in Ottawa that arranges back-to-back contracts between Canadian suppliers and foreign governments. Each contract dwarfs recent CCC awards for military exports to other Canadian-based contractors. Together they comprise the bulk of a $15.5-billion military contract total awarded by the CCC during FY 2013-14. As illustrated in Figure 1, this latest total is an order of magnitude greater than equivalent annual totals for the majority of years in this century.

For the first time in more than half-a-century of CCC operations, Saudi Arabia has displaced the United States as the largest year-on-year recipient of CCC-brokered military export contracts. The Canadian Commercial Corporation is responsible for facilitating the special military trade arrangements between the United States and Canada under the Defence Production Sharing Agreement and, until FY 2013-14, contracts with the Pentagon dominated CCC-arranged export orders. In the latest fiscal year U.S. orders totalled $592.2-million, about four per cent of the value of the Saudi orders. The new contracts change the norm, making Saudi Arabia the alternative major recipient of Canadian arms exports for years to come.

This is not to say that CCC ignored other military customers during 2013-14. According to the released data, the crown corporation placed contracts with Canadian companies valued at $36.2-million for Mexico, $18.8-million for Argentina, $10.9-million for Peru, and $2.3-million for Norway. In 2010 CCC appointed a Director of Global Defence Sales to promote Canadian military exports in new markets. The latest export figures add to the success the corporation has found since, particularly in markets in the global South.

The duration of the two Saudi Arabia contracts was not reported by CCC, but from information in a February government announcement, we can assume that they will span at least 10 years, with average annual shipments worth at least $1-billion. This means that Saudi Arabia is slated to be a major, if not the largest, recipient of Canadian military exports for the next decade or more. Thousands of Canadian livelihoods in London, Ontario and in subcontracting companies across Canada will depend on shipments of military armoured vehicles to an autocratic regime well known for human rights abuses.

Figure 1

Quite apart from their unprecedented size, the Saudi contracts raise fundamental questions about Canadian export control standards. The Saudi government’s abysmal human rights record is well documented. In directing a crown corporation to actively seek out the contracts, the Canadian government has ignored the high risk that Canadian vehicles will become tools of repression. The risk will escalate if Saudi Arabia experiences an “Arab Spring” movement calling for basic rights and freedoms.

Saudi Arabia also boasts the largest military budget in the Middle East, the world’s most militarized region. Huge military expenditures by the Saudi regime provide perhaps the single clearest example of the “excessive and destabilizing accumulation of conventional weapons” warned about by many international agreements to which Canada is a party.

When Minister of International Trade Ed Fast announced the Saudi Arabia contracts in February, he emphasized the jobs and economic benefits of the sale. While its economic value to Canada seems obvious, we must question the value of the sale to the people of Saudi Arabia and others in the Middle East who may find themselves in the sights of Canadian-built armoured vehicles.

For more information contact:
Kenneth Epps
Senior Program Officer
Tel: 519-888-6541 x23401

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