Hot-button arms maker gets $50M in funding

• The Liberal government’s flagship innovation fund is set to provide nearly $50 million to a U.S. defence contractor whose Canadian unit human rights activists have criticized for sales to Saudi Arabia, The Logic has learned.

General Dynamics will receive $49.9 million for a $145.4-million project in London, Ont., according to a page on the website of Innovation, Science and Economic Development Canada (ISED) that lists beneficiaries of the federal Strategic Innovation Fund (SIF). It says the award is set to be announced on Jan. 31.

Reston, Va.-headquartered General Dynamics is one of the largest U.S. defence contractors, with nearly US$38 billion in revenue in 2020. Its subsidiary General Dynamics Land Systems-canada (GDLS-C) manufactures light- and medium-armoured vehicles in London.

The government has signed an agreement to make a “non-repayable” contribution to GDLS-C, ISED spokesperson Alison Reilander confirmed, adding that “the investment will support local research and development.” GDLS-C directed questions to ISED and the SIF program.

In September 2019, the federal government awarded the firm a sole-sourced contract worth up to $3 billion for 360 combat-support vehicles and support. However, the firm primarily manufactures for export.

In February 2014, the then-conservative government announced it had brokered a deal worth up to $14 billion for GDLS-C to sell light-armoured vehicles (LAVS) to the Saudi Arabian government.

Following the October 2018 murder of the U.s.based journalist Jamal Khashoggi, then-foreign affairs minister François-philippe Champagne announced the department would pause issuing permits for arms exports to the kingdom, pending a review; some shipments continued. Champagne is now innovation minister, responsible for SIF.

That December, Prime Minister Justin Trudeau said his government was looking for “a way of no longer exporting these vehicles to Saudi Arabia.” In response, GDLS said any such move would cost it “billions of dollars of liability.”

In April 2020, Global Affairs concluded there was no “substantial risk” the Canadian-made LAVS were being used for “serious violations” of international humanitarian law in Yemen, where Saudi Arabia and its allies are conducting a bombing campaign and ground offensive.

Human rights groups have disputed those findings. In an August 2021 report, Amnesty International and Waterloo, Ont.-based Project Ploughshares said the federal government was “ignoring Canada’s obligations” under the international Arms Trade Treaty, citing reports of images showing weaponized GDLS-C LAVS in Yemen.