General Dynamics says cancelling Saudi Arabian contract would cost billions


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The murder of journalist Jamal Khashoggi has called into question Canada's business dealings with the Kingdom.

OTTAWA—The Ontario-based company that is selling $15-billion worth of armoured vehicles to Saudi Arabia is warning the Liberal government that cancelling the deal will cost it billions of dollars in penalties.

General Dynamics Land Systems-Canada said in a statement Monday that cancelling the contract would also hurt its workforce.

The statement comes as the federal government is reviewing the controversial contract.

Canada is reviewing all arms sales to Saudi Arabia and won’t issue any new export permits until the review is complete.


The October murder of journalist Jamal Khashoggi after he entered a Saudi consulate in Turkey has sparked international condemnation against Riyadh.

Khashoggi’s murder has also renewed public outrage in Canada over Ottawa’s controversial $15-billion deal to sell light armoured vehicles to the kingdom.

“We are continuing to execute our valid and binding contract,” General Dynamics said in a statement.

“Were Canada to unilaterally terminate the contract, Canada would incur billions of dollars of liability to General Dynamics Land Systems-Canada.

“In addition, 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.”

Foreign Affairs Minister Chrystia Freeland said Saudi Arabia’s explanations for Khashoggi’s death are not credible and there needs to be an independent investigation.

“In the past Canada has suspended existing export permits and that has always been something that we’re prepared to do again as the situation merits,” Freeland said in an interview on Monday.

Prime Minister Justin Trudeau has said the penalty for cancelling the contract would be “in the billions of dollars.”


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