Skip to content

Canada's Business and Tech Newsroom

  • Professional Subscription
  • Partnerships & Advertising
  • Licensing & Syndication
Log In Subscribe
Welcome,
  • My Account
  • Log Out
  • Business
  • Tech
  • National
  • The Big Read
  • Briefings
  • Commentary
Search
Log In Subscribe
Welcome,
  • My Account
  • Log Out
Exclusive

Ottawa’s flagship fund to announce $50M for controversial defence contractor

OTTAWA — 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.

Exclusive

Ottawa’s flagship fund to announce $50M for controversial defence contractor

By Murad Hemmadi
A light-armoured vehicle, similar to the ones ordered by the Canadian Armed Forces, sits inside the General Dynamics Land Systems-Canada factory in London, Ont., in August 2019.
A light-armoured vehicle, similar to the ones ordered by the Canadian Armed Forces, sits inside the General Dynamics Land Systems-Canada factory in London, Ont., in August 2019. Photo: Geoff Robins/The Canadian Press
Jan 25, 2022
A A
A Small A Medium A Large
Share

Gift

Share

OTTAWA — 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.

Talking Point

The Liberal government will announce nearly $50 million from its flagship Strategic Innovation Fund for General Dynamics, a U.S. defence contractor, The Logic has learned. The company’s London, Ont.-based facility, which the award is to support, makes armoured vehicles sold to the Canadian Armed Forces and Saudi Arabian military.

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 Canada 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.

The Liberal government established the SIF in the March 2017 federal budget, incorporating four existing programs, including the military-focused Strategic Aerospace and Defence Initiative and Technology Demonstration Program. The new fund reimburses companies for expenses like labour and materials for R&D and expansion projects. General Dynamics is the first defence contractor directly awarded funding through the SIF, according to The Logic’s ongoing analysis; while recipient Bell Helicopter Textron makes military aircraft, its Mirabel, Que.-based Canadian operation focuses on commercial applications.

The SIF has funded Canadian scale-ups like robotics firms Kinova and Attabotics or applied- AI companies AbCellera and MindBridge; plant build-outs for manufacturers like Ford, Linamar and Toyota; and major industrial projects from multinationals like ArcelorMittal and  Gerdau Ameristeel.

General Dynamics will spend a total of $145.4 million on the London project backed by SIF, and maintain 1,440 jobs, according to the program site. Reilander said the funding was approved under a stream of the program designed to attract “large-scale investments to Canada.” The project “supports Canadian research and development, secures high quality research and manufacturing jobs in Canada, and will help train the industry’s future workforce through co-op opportunities and collaborations with local universities and colleges,” she said.

Gift the full article

The firm has received other federal funding. In August 2019, then-defence minister Harjit Sajjan announced Ottawa would loan GDLS-C up to $650 million, after its parent company said the Saudi Arabian government had missed payments on its LAV order. The Canada Account, which finances export transactions of “national interest,” provided the funding.

General Dynamics’ ordnance and tactical-systems division also has facilities in Quebec, while its technology business line has operations in Ottawa.

#federal government #General Dynamics #Strategic Innovation Fund

Sponsored Content

How to shift your workforce from AI experimentation to adoption

By Jessica Aftimus Rosa

The real-world economic offshoots of sovereign AI

By Deborah Aarts
Illustration of a plane flying above a mailbox

Increasing healthcare access across Canada

By Deborah Aarts
Paid promotional content

Loading...

Thanks for sharing!

You have shared 5 articles this month and reached the maximum amount of shares available.

Close
This account has reached its share limit.

If you would like to purchase a sharing license please contact The Logic support at [email protected].

Close
Want to share this article?

Upgrade to all-access now

Close
Gift the full article!

You have gifted 0 article(s) this month and have 5 remaining.

Copy link and gift
Copy Link
Email to a friend
Send Email
Gift on Social Media

Recipients will be able to read the full text of the article after submitting their email address. They will not have access to other articles or subscriber benefits.

A light-armoured vehicle, similar to the ones ordered by the Canadian Armed Forces, sits inside the General Dynamics Land Systems-Canada factory in London, Ont., in August 2019.

Photo: Geoff Robins/The Canadian Press

Most Popular This Week

Special Report

Canada pitched itself to the world’s biggest investors. Now comes the hard part

By David Reevely, Anita Balakrishnan, Murad Hemmadi, Chaimae Chouiekh, Claire Brownell and Kevin Carmichael
News

The Canada Investment Summit’s US$430B deal book, in charts

By Chaimae Chouiekh
An aerial image of a Syncrude oilsands field in Fort McKay, Alberta.
Exclusive

Inside the provinces’ pitches to the world’s biggest investors

By Anita Balakrishnan
Donald Trump holding up a board bearing the names of countries and tariff rates. He's standing behind a lectern bearing the U.S. presidential seal.
Analysis

The ‘red line’ in U.S. trade talks that sets Canada apart from other countries

By Joanna Smith

In-depth, agenda-setting reporting

Great journalism delivered straight to your inbox.

Canadian and U.S. flags wave beside Gordie Howe International Bridge under a clear blue sky.
Commentary

Carmichael: How free trade with the U.S. made Canadian businesses lazy

By Kevin Carmichael

Briefing

Brookfield says it’s not becoming the ‘WeWork of AI,’ despite data-centre slowdown

By Anita Balakrishnan   |   Sep 18, 2026

Ottawa earmarks $880M for skilled trades training

By Catherine McIntyre   |   Sep 18, 2026

Global airline association opposes Ottawa’s airport privatization plan

By Catherine McIntyre   |   Sep 18, 2026

Best business newsletter in Canada

Get up to speed in minutes with insights and analysis on the most important stories of the day, every weekday.

Exclusive events

See the bigger picture with reporters and industry experts in subscriber-exclusive events.

Membership in The Logic Council

Membership provides access to our popular Slack channel, participation in subscriber surveys and invitations to exclusive events with our journalists and special guests.

Recent Popular Stories

Analysis

The ‘red line’ in U.S. trade talks that sets Canada apart from other countries

By Joanna Smith   |   Sep 14, 2026
Donald Trump holding up a board bearing the names of countries and tariff rates. He's standing behind a lectern bearing the U.S. presidential seal.
News

Trump steps up effort to block Canadian goods from U.S. procurement—but his order leaves a lot untouched

By Joanna Smith   |   Sep 17, 2026
A nighttime shot of Donald Trump holding his hand while speaking. He's wearing a red hat with "USA" emblazoned on the front.
News

Arlene Dickinson launches $500M fund to back Canadian agriculture firms in Southeast Asia

By Catherine McIntyre   |   Sep 14, 2026
An aerial photo of a combine harvester swathing its way through a field of barley.
News

The Canada Investment Summit’s US$430B deal book, in charts

By Chaimae Chouiekh   |   Sep 15, 2026
Special Report

Canada pitched itself to the world’s biggest investors. Now comes the hard part

By David Reevely, Anita Balakrishnan, Murad Hemmadi, Chaimae Chouiekh, Claire Brownell and Kevin Carmichael   |   Sep 15, 2026
News

Canada’s investment problem isn’t a lack of money, investors say at Milken Institute event

By Chaimae Chouiekh, Anita Balakrishnan and Murad Hemmadi   |   Sep 14, 2026

Canada's most influential executives and policymakers are reading The Logic

  • CPP Investments
  • Sun Life Financial
  • C100
  • Amazon
  • Telus
  • Mastercard
  • bdc
  • Shopify
  • Rogers
  • RBC
  • General Motors
  • MaRS
  • Government of Canada
  • Uber
  • Loblaw Companies Limited
logic-logo

Canada's Business and Tech Newsroom

100% human-crafted journalism

Newsroom

  • News Tips
  • AI Policy
  • Editorial Disclosures
  • Story Pitches

Company

  • About Us
  • Terms of Service
  • Privacy Statement
  • Corporate Information

Contact

  • Contact Us
  • Advertise
  • FAQs
  • Work at The Logic

© 2026 The Logic Inc. All Rights Reserved.

Trusted by leaders

Error

Account creation failed.

Please email us at [email protected].

Create Account

[wppb-register form_name=”cozmo-registration-form-for-modal”]

I do have an account
Login
or

[wppb-login]

I don’t have an account