The Liberal government is being criticized for a $49.9-million subsidy to General Dynamics Land Systems-Canada (GDLS-C), which makes armoured vehicles for the Canadian Armed Forces and Saudi Arabian National Guard. Here’s what you need to know:

The money: As The Logic first reported on Monday, Ottawa’s flagship Strategic Innovation Fund (SIF) has agreed to the “non-refundable contribution” to GDLS-C for a $145.5-million project in London, Ont. The award is set to be announced on Jan. 31.

The backstory: In February 2014, the then-Conservative government announced Saudi Arabia would buy up to $14 billion worth of armoured vehicles from GDLS-C. In December 2018, Prime Minister Justin Trudeau said his government was looking for a way out of the deal, but in April 2020, Global Affairs Canada lifted a hold on issuing export permits for arms after concluding in part that there was no “substantial risk” they were being used for “serious violations” of international humanitarian law in the war in Yemen. 

LAV exports: “Ottawa seems determined to continue with this deal no matter what,” said Cesar Jaramillo, executive director of Project Ploughshares, a Waterloo, Ont.-based arms-control watchdog. He cited reports of Saudi Arabian forces using arms in Yemen imported from countries including Canada. By funding GDLS-C, the government “is prioritizing a sector that is directly contributing to human rights violations, [which matter] even if they happen halfway around the world,” said Jaramillo. 

NDP innovation critic Brian Masse noted in a statement to The Logic that other countries have stopped exporting “military-grade LAV vehicles” to Saudi Arabia, while Canada continues to do so despite endorsing the UN’s call for global ceasefire. 

The employment rationale: The SIF typically funds R&D and expansion projects at scale-ups and major industrial projects from multinationals. The GDLS-C project will maintain 1,440 jobs in London, according to the program’s website.

Masse did not directly object to the award. “New Democrats know how important the GDLS-C is to London and jobs in the city,” he said. “Workers in London are very proud of the high-quality products they build.” He blamed the Conservative and Liberal governments for putting “their jobs in a precarious situation.” 

But Jaramillo noted that employment was also the rationale for the deal to export LAVs to Saudi Arabia. “It’s interesting that now they’re citing, as a reason for these funds, sustaining the jobs at General Dynamics,” he said. “One must wonder whether or not the [Saudi Arabian] deal itself was sufficient, as we were told, to sustain those jobs.”