Hudson on the Hill

Damned if you do...
HUDSON ON THE HILL  |  Feb 15, 2016

Several issues facing Prime Minister Justin Trudeau and his still fledgling Liberal government clearly fall into the “damned if you do, damned if you don’t” category. They include whether to permit pipelines to the West Coast and Eastern Canada, when to embark on electoral and Senate reforms, and how best to intervene in the latest economic slump.

Then there’s the Middle East. Issues there include the role of Canadian “advisors” in the campaign against the so-called Islamic State, Trudeau’s withdrawal by February 22 of the half-dozen Royal Canadian Air Force CF-18s from Operation Impact, and the General Dynamics Land Systems Canada (GDLS) sale of third-generation light armoured vehicles (LAV IIIs) to the Saudi Arabian National Guard.

The LAV sale is linked closely to the economic challenge. Worth $15 billion over 14 years, the contract is a key factor in the future economic well-being of the Ontario city of London, which is the U.S.-owned company’s manufacturing base. When it was announced in February 2014, Canada’s ambassador to Saudi Arabia at the time, Tom MacDonald, emailed senior officials back home that “the Big One is landed.”

The crux of the Trudeau administration dilemma on the LAV file is that the Saudi National Guard – which has a well-trained and well-equipped standing force of 100,000 and functions independent of the Ministry of Defence – is tasked exclusively with maintaining internal stability and protecting strategic facilities as well as the ruling House of Saud.

The Guard, al-Haras al-Watani, has been under the ministerial direction of Prince Mutaib bin Abdullah since May 2013. A graduate of the Royal Military Academy Sandhurst in England, which has educated many senior Saudis over the years, he was the third son of King Abdullah (who died in January 2015). He honed his skills as the Guard’s commanding officer for nearly three years, overseeing a $3-billion upgrade of its artillery capabilities. He has a reputation as being progressive in some ways (an all-female Guard contingent has been broached) but not when it comes to protecting the family.

Following that capability upgrade, negotiations conducted through the Canadian Commercial Corporation led to the contract with GDLS for potentially more than 1,000 LAV IIIs. When his Conservative government announced the deal, Prime Minister Stephen Harper lauded its role in increasing and sustaining employment.

Canada officially restricts exports of military equipment to countries which abuse human rights. Although Saudi Arabia is one of the few so-called “western-friendly” Arab nations, it is home to Wahhabism, an extreme form of Sunni Islam. Stoning and beheadings are routine punishment for an array of offences – which can include insulting the royal family.

The recent executions of 47 individuals, 43 of whom were identified by the Saudis as Al Qaeda militants, have become a focal point for attacking the LAV III contract. Most of the criticism, however, centred on the execution of Shiite cleric Nirm Al-Nimr, who was convicted in October 2014 of sedition and other charges. He did not deny criticizing the ruling family but always insisted that he did not call for violence.

Al-Nimr’s death is seen by some as a warning to those pressing for reforms and political freedoms in Saudi Arabia.  It also is seen as further evidence in support of Saudi Shiites’ claims that they are discriminated against by the ultraconservative Sunnis, many of whom see the Shiites as heretics.

Former Liberal foreign affairs minister, Lloyd Axworthy (1996-2000) jumped into the debate after the executions. “The Saudis have . . . in the last couple of years really become a problem,” he told The Globe and Mail. “The degree of oppression against women and dissidents […] is becoming almost epidemic.” Axworthy also counseled Trudeau’s administration against developing a closer relationship with Saudi Arabia.

One of Harper’s core ministers, Tony Clement, who now is the Official Opposition’s foreign affairs critic, has been pressing the Liberals to publish their reasons for letting the deal proceed. “Canadians don’t want these weaponized vehicles to be used against innocents,” he said. “We need to know, given this rapidly changing environment in the Middle East, that the weapons are going to be used for the purposes that are intended and that there has been sufficiently rigorous assessment of Saudi Arabia.”

The 20-tonne 8x8, capable of sprinting at 100 kilometres per hour, is the latest in a series of armoured vehicles based on the MOWAG Piranha III. Developed here, it is the Canadian Army’s primary mechanized infantry vehicle, fitted out with a 76mm grenade launcher, 25mm cannon, and a 5.56 or 7.62mm turret-mounted machine gun.

There’s no questioning its lethality, but to lament the “weaponized” nature of the LAVs and – as Axworthy evidently did, call the contract an “anomaly” – is arguable disingenuous. However, Trudeau did not help his administration’s case by dismissing the LAVs as “jeeps” when the contract and Saudi human rights became an issue in last fall’s general election campaign.

Weaponized? Really? Would it be better if they were exported without armaments? Or for defensive purposes only? If that’s the case, voters and politicians need to be reminded that Canada is – and has been for decades – a manufacturer of all kinds of military hardware, including munitions, as far back as 1882 when the Dominion Arsenal (DA) was established in Quebec.

DA eventually evolved into Canadian Arsenals Ltd., a Crown corporation and large-calibre ammunition supplier, which was acquired in 1986 by a GDLS corporate sibling, General Dynamics Ordnance and Tactical Systems Canada, which six years earlier had acquired Industries Valcartier Inc., a small-calibre ammunition manufacturer.

Ostensibly, civil products that could be used for military purposes also are exported by Canada. Possibly the best example was the sale of 41 Bell UH1N Iroquois helicopters which Canada retired from service in 1999. Most were immediately acquired by the U.S. government and, after extensive refitting, were transferred to the National Army of Colombia and the Colombian National Police. Laundering them through the U.S. enabled Canada to bypass a restriction (since lifted) on arms sales to Colombia.

Much of it falls within the ambit of the Export and Imports Permit Act, which the then Progressive Conservative government of Brian Mulroney had amended in 1991 to facilitate more sales of LAVs and automatic weapons. Three years later, with the Liberals in power under Jean Chrétien, sales surged by some 48% to $497.4 million, contributing to Canada’s position in 1994 as the 7th largest supplier of military arms to Third World countries. The total earlier LAVs to Saudi Arabia and a tactical air navigation system, among other things, to Thailand (which is another country that doesn’t take well to criticism of the ruling royal family, albeit not aggressively as the Saudis).

Despite the Saudi controversy, there is no gainsaying the importance of the defence industry overall to the Canadian economy. Prime Minister Trudeau has been advised by senior officials that Canada’s strategic interests would be well served through stronger ties with Saudi Arabia. “Further deepening of strategic relations with the Gulf Cooperation Council (GCC) countries would serve Canadian commercial and possibly security interests,” states a redacted memorandum released through Access to Information legislation, highlighting Saudi Arabia as the lead player in the GCC, which also includes Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates. “Current bilateral engagement includes a particular focus on Saudi Arabia and the UAE […] Saudi Arabia is a regional power, the only Arab country in the G20. It is a key contributor to global energy security and Canada’s largest trading partner in the region.”

The government response to demands that it re-examine the LAV III deal is that GDLS, a private company, has the appropriate export permit. Moreover, an aide to Foreign Affairs Minister Stéphane Dion has said that the situation in Saudi Arabia had been “carefully reviewed” and that in all such cases, “human rights considerations are seriously taken into account before a permit is issued.”

Since 1990, the Trade Controls Bureau (TCB) in Dion’s department has reported to Parliament on the government’s Export Control List. Export controls are designed, “to ensure that arms, ammunition, implements or munitions of war, naval, army or air stores or any articles deemed capable of being converted there into or made useful in the production thereof or otherwise having a strategic nature or value will not be made available to any destination where their use might be detrimental to the security of Canada.”

In 2013 (the last year for which a report was filed, 2014 apparently was ready for submission when last year’s election was called but has not yet been released), the TCB issued more than 273,000 permits for the export of controlled goods, the vast majority of which were non-military products, notably forest products. Of the other roughly 6,000 permits issued, 3,289 were for munitions and 2,289 were for “dual-use” products as defined by the Wassenaar Arrangement – named for the Netherlands community near The Hague where negotiations took place.

A non-binding multilateral accord, the 1996 Arrangement involves more than 40 countries, including NATO members and many former Warsaw Pact countries. It was designed to contribute to security and stability through the promotion of transparency about transfers of conventional arms and dual-use goods and technologies in eight broad groups: battle tanks; armoured combat vehicles; large artillery; fixed-wing aircraft; helicopters; warships; missiles and related systems; and small arms and light weapons.

The effectiveness of TCB reviews can be debated until the camels come home, but there’s a seminal question to be answered: should Canada block all exports which have the potential to harm a customer country’s own people? That argument suggests that selling bullets (and the guns that fire them) as separate entities is fine, but not as a package. If so, many military exports wouldn’t leave the cargo terminal, and the number of jobs created here would diminish, if not disappear.

Canada has a history of supplying components and parts to multinational corporations which ultimately are responsible for military sales, but in the LAV III case, the Saudis are buying a complete package. The Canadian Armed Forces, given the government’s shifting priorities, is a relatively minor and often sporadic customer, which leaves Canada’s defence industry heavily dependent on the export market.

Historically, that market has been U.S.-centric, thanks to privileged access, notwithstanding the occasional intellectual property argument, most of which involve potential re-exports of U.S. technology to third countries. Budget cuts in many of Canada's traditional markets, which tend to have their own government-backed defence industries to sustain, have forced Canadian companies to look elsewhere for business sources.

Competition is fierce. Long-term success requires not only a thoroughly researched and developed product to begin with, but also a reputation for staying the course as a supplier. This keeps Canadian companies afloat, their workers employed, and their supply chain intact, all the while maintaining capacity to eventually re-equip our own military without wholesale dependence on imports, which would be disastrous not only for thousands of employees but also our international balance of trade.

Look at how some of our allies rushed to do business with Iran, once labeled as part of “the axis of evil”, as soon as economic sanctions were eased in January. The time-worn bromide that “if we don’t sell to them, someone else will” comes to mind. Would that happen in the unlikely event that the government should, ill-advisedly, try to tell GDLS not to do business with the Saudis? Of course.

Hudson on the Hill
As of August 2015, the role of Hudson has been filled by contributing editor Ken Pole. We look forward to your online comments, visit the “Magazine” menu of our web site.