Selling Out to the Saudis: A Historical Analysis of Stephane Dion’s Apology for Canadian Military Export Controls

Paul Esau Department of History University of Lethbridge

When Ed Fast, Canadian Minister of International Trade under Stephen Harper, announced the largest advanced manufacturing contract in Canadian history on February 14, 2015, it was spun as a political masterpiece. A brilliant economic achievement on paper, the 14-year, $14.8 billion deal promised to directly benefit 500 Canadian companies, and continue an important trade alliance with a strategic partner.1 This single contract was projected to keep 3000 Canadians employed for the next 14 years, primarily in London, Ontario where the General Dynamics Land Systems Canada (GDLS-C) manufacturing plant is located.2 The only catch was that the deal was to manufacture a military weapons system, namely Light Armored Vehicles (LAVs), and the ‘strategic partner’ was the repressive theocracy of Saudi Arabia. Canadians have long been ambivalent (perhaps unaware) about their country’s participation in the global arms trade. It is easy to welcome the jobs and capital provided by military exports, and such deals have proven critical to Canada’s military industrial base by sustaining and subsidizing military production. On the other hand, the presence of Canadian military goods in conflict zones around the world has cast a dubious shadow over the industry and its

1 GAC, "Largest Advanced Manufacturing Export Win in Canada’s History," news release, February 14, 2015, http://www.international.gc.ca/media/comm/news-communiques/2014/02/ 14a.aspx? lang=eng. 2The number of workers is contested, and depends on how many subsidiary contractors are included in the count. Steven Chase, "The Saudi Arms Deal: Why It's a Big Deal," The Globe and Mail, February 5, 2016.

Paul Esau. 2017. “Selling Out to the Saudis: A Historical Analysis of Stephane Dion’s Apology for Canadian Military Export Controls.” Meeting of the Minds Graduate Student Journal 1 (http://ulgsajournal.com). DOI: 10.5281/zenodo.376783. © 2017 by Paul Esau under a Creative Commons 4.0 Attribution – Non-Commercial Licence (CC- BY-NC). 2 PAUL ESAU: SELLING OUT TO THE SAUDIS: A HISTORICAL ANALYSIS OF STEPHANE DION’S APOLOGY FOR CANADIAN MILITARY EXPORT CONTROLS governmental enablers. Since the Second World War, Canadian exports have found their way directly or indirectly to both Iranian and Iraqi forces during the Iran-Iraq War, the American forces in Vietnam, the apartheid-era government in South Africa, the British forces in the Falklands/Maldives conflict, Israeli forces in Lebanon, the governments of El Salvador and Honduras during the insurrections, and now Saudi Arabia during the current regional instability.3 In 2016, largely due to the LAV deal, Canada became the second-largest exporter of military goods to the Middle East.4 The Canadian policy of pursuing economic advantage through military export has always conflicted with its political and ideological commitment to human security and global development,5 but rarely has the discordance been so jarring. This paper will analyze three recent attempts to justify the LAV deal to the Canadian public through a press release, an op-ed, and a declassified memorandum. It will use the structure of the press release as an organization framework, and highlight the historical premises behind the arguments made in each document. In doing so it will show that the current Liberal government is misrepresenting the scope of its ‘restrictive’ weapons export policy, in practice transforming the policy into a convenient rhetorical shield rather than a rigorous evaluation. It will further show that the government is primarily concerned with the economic implications of the Saudi-LAV deal, secondly with the strategic consequences, and only thirdly with its military export and human rights commitments. All three documents this article will consider were released in April 2016 following the discovery (on Tuesday, April 12) that Liberal Minister of Foreign Affairs Stephane Dion had signed the export permits for the majority of the LAVs the previous Friday. The first is an April 13 news release from the desk of Stephane Dion providing the official government statement on why it continues to support the arms deal.6 The second is the declassified memorandum for action calling on Dion to approve the weapons export permits for “approximately $11 billion” worth of LAVs.7 The third is an opinion piece from John Manley, Liberal Foreign

3 E. Regehr, Arms Canada: The Deadly Business of Military Exports (Toronto: James Lorimer & Company, Publishers, 1987), 3. 4 Steven Chase, "Canada Now the Second Biggest Arms Exporter to Middle East, Data Show," The Globe and Mail, June 14, 2016. 5 GAC (Global Affairs Canada), "Our Priorities," http://www.international.gc.ca/department-ministere/priorities-priorites.aspx?lang=eng. 6 Stephane Dion, "Statement by the Hon. Stephane Dion, Canada's Minister of Foreign Affairs, on the Sale of Light Armoured Vehicles to Saudi Arabia," news release, April 13, 2016, http://news.gc.ca/web/article-en.do?nid=1051599. 7 Global Affairs Canada, "Memorandum for Action to the Minister of Foreign Affairs," (2016).

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Affairs Minister between 2000 and 2002, published in iPolitics8 Taken together, these three documents provide the official and popular arguments for honoring the LAV deal, and suggest that Canada’s current military export restrictions differ in theory and practice. Canada’s export policy regarding military goods is set by the Canadian Department of Foreign Affairs, Trade and Development (recently renamed Global Affairs Canada). Although Canada’s military exports are primarily manufactured and sold by private corporations, Global Affairs Canada (GAC) recognizes an official responsibility for the ends to which Canadian weapons and munitions are put by the eventual buyers.9 The 2014 deal with Saudi Arabia, a nation with a long history of human rights abuses,10 would seem to be in violation of the Handbook’s policy to closely control military exports to countries “whose governments have a persistent record of serious violations of the human rights of their citizens.”11 Still the GAC policy also includes language allowing military exports to human rights violators like Saudi Arabia if “it can be demonstrated that there is no reasonable risk that the goods might be used against the civilian population.”12 The Handbook also seeks to ensure that Canadian military exports are consistent with a range of objectives. Legitimate military exports, according to these objectives:

1. do not cause harm to Canada and its allies; 2. do not undermine national or international security; 3. do not contribute to national or regional conflicts or instability; 4. do not contribute to the development of nuclear, biological or chemical weapons of mass destruction, or of their delivery systems; 5. are not used to commit human rights violations; and 6. are consistent with existing economic sanctions’ provisions.13

8 John Manley, "We Can't Always Sell Weapons to People We Like," iPolitics, April 22, 2016. 9 FATDC, Export Control Division - Trade Controls Bureau, "Report on Exports of Military Goods from Canada," (2012-2013). 10 “Canada, like others in the international community, remains concerned about human rights issues in Saudi Arabia, including the reported high number of executions, suppression of political opposition, the application of corporal punishment, suppression of freedom of expression, arbitrary arrest, ill-treatment of detainees, limitations on freedom of religion, discrimination against women and the mistreatment of migrant workers.” Canada, "Memorandum for Action to the Minister of Foreign Affairs," 3. Human Rights Watch, "World Report 2013: Saudi Arabia," (2013). 11 Export Controls Division, "Export Controls Handbook," ed. Trade and Development Canada Foreign Affairs (2015). 12 Ibid. 13 Ibid.

4 PAUL ESAU: SELLING OUT TO THE SAUDIS: A HISTORICAL ANALYSIS OF STEPHANE DION’S APOLOGY FOR CANADIAN MILITARY EXPORT CONTROLS These goals provide a wide mandate for the rejection of military export contracts, although Ottawa has refused to release the numbers on how many export applications have been refused in the past decade due to commercial confidentiality.14 It is important to note, however, that the Handbook policy goals are not legally enforceable, but instead defer to the 1985 Export and Import Permits Act (EIPA), which only recognizes the imperative to block military exports to any destination “where their use might be detrimental to the security of Canada.”15 It is not clear how much authority is given to the policy goals laid out in the Handbook during the evaluation of export contracts, nor how the Canadian Export Controls Division evaluates how a contract will impact national security. The secrecy of the export control process (ostensibly due to commercial confidentiality),16 as well its disappointing results in high-profile military export cases, suggest that Canadian national security is the only factor which cannot be overridden by economic incentives. This is despite the fact that Canadian arms exports have been increasingly linked to “the militarization of political power,” especially in the developing world,17 as the rise of intra-state conflict had greyed the boundary between police action and civil war.18 Arms exports may be economically and strategically important to Canadian prosperity, but only at the cost of contributing to a global and destabilizing arms trade. The current Liberal government attempted to deflect media scrutiny of the LAV deal in early 2016 by claiming that the contract had been irrevocably committed to by the previous Conservative government,19 but this has been revealed as a political fabrication. In March 2016 Daniel Turp, a University of Montreal professor, filed a lawsuit alleging that the government was not fulfilling

14 Steven Chase, "Ottawa Can't Reveal Arms-Export Numbers," The Globe and Mail, January 15 2016. 15 Export and Import Permits Act, s.3. 16 Ken Epps, former employee of Ontario based disarmament group Project Ploughshares, argues that this is an intentional government tactic: “We know that there are instances where some countries report more than Canada, and the commercial confidentiality thing has always struck us as being overplayed and probably not even necessarily accurate…. The sense we have is that industry is probably more open to some of the details being reported than the government, and the government is using commercial confidentiality as an excuse to effectively be less transparent.” Kenneth Epps, interview by Paul Esau, 2016. 17 Ernie Regehr, "Military Sales," in Human Rights in Canadian Foreign Policy, ed. Robert O. Matthews and Cranford Pratt (Montreal: McGill-Queens University Press, 1988), 210. 18 Antonia Hinds, "The Arms Trade and Human Rights," The International Journal of Human Rights 1, no. 2 (1997): 26. 19 “Initially, Foreign Affairs Minister Stéphane Dion characterized it as a deal the Conservatives crafted and that the Liberals were obliged to accept when they came to power.” Chase, "The Saudi Arms Deal: Why It's a Big Deal."

MEETING OF THE MINDS GRADUATE STUDENT JOURNAL 1 (2017). DOI 10.5281/ZENODO.376783 5 its legal obligation to enforce Canada’s weapons export restrictions.20 In response to this lawsuit, the government disclosed that the LAV export permits (government-issued permits required of all Canadian-produced military exports to non-U.S. destinations) had not been signed by the previous Conservative government, but had instead been pre-emptively inked only days before by Liberal Minister Stephane Dion.21 In fact, the secret memorandum requesting that Dion sign the permits was sent the same day Turp filed his lawsuit,22 a coincidence that further undermined the Liberals’ insistence that they were the helpless recipients of a signed, sealed, and delivered Conservative deal. GAC’s “SECRET MEMORANDUM FOR ACTION” (dated March 21, 2016 and released to the public on April 12, 2016), justified the deal by asserting:

Based on the information provided, [GAC does] not believe that the proposed exports would be used to violate human rights in Saudi Arabia. Canada has sold thousands of LAVs to Saudi Arabia since the 1990s, and, to the best of the Department’s knowledge, there have been no incidents where they have been used in the perpetration of human rights violations.23

On April 13, 2016, Dion put out his own news release defending his decision to sign the export permits. He included five keys arguments in support of the LAV deal: credibility, influence or ‘leverage’, legality, economics, and security.

Credibility

Dion began his summary of arguments by defending the position that the Liberal government was simply honouring a deal concluded by its predecessor. In Dion’s words, “Credibility Matters” and “[he] will not weaken the credibility of the signature of the Government of Canada.”24 Once again, this argument is problematic, as Canadian military export deals are contingent on the signing of export permits by GAC, a formidable roadblock that Dion himself removed only five days before publishing his release. Since the deal was entirely contingent upon valid export permits, the credibility of the government’s signature was only

20 "Canada's $15-Billion Saudi Arms Deal Violates Export Rules, Lawsuit Argues," The Globe and Mail, March 21, 2016. 21 "Dion Quietly Approved Arms Sale to Saudi Arabia in April: Documents," The Globe and Mail, April 12, 2016. 22 Ibid. 23 Canada, "Memorandum for Action to the Minister of Foreign Affairs," 4. 24 Dion, "Statement by the Hon. Stephane Dion, Canada's Minister of Foreign Affairs, on the Sale of Light Armoured Vehicles to Saudi Arabia."

6 PAUL ESAU: SELLING OUT TO THE SAUDIS: A HISTORICAL ANALYSIS OF STEPHANE DION’S APOLOGY FOR CANADIAN MILITARY EXPORT CONTROLS threatened because of Dion’s secret efforts to make sure the export permits were signed before their absence could be revealed to the public.25 An alternative means of absolving the current government of responsibility for the deal is to describe the export permits as a mere formality, rather than a rigorous hurdle. As John Manley wrote in late April:

The minister and his colleagues are, of course, right to say that the sale was negotiated and approved before they assumed office. The fact that the minister’s signature was required on the final export permits in no way contradicts the reality that to have refused to sign those permits would have breached a contract previously entered into by the Government of Canada. If I sign an agreement to sell my house, the transaction is not completed until the day I sign the papers transferring ownership of the property to the buyer. But if I refuse to do the latter, I am clearly in breach of my prior agreement.26

In equating export permits to title transfer, Manley is engaging in a false equivalence. Unlike transferring property ownership, signing of export permits is not merely a rubber stamp, but instead (in theory) the carefully considered result of a rigorous governmental evaluation independent of the two parties engaged in the contract. In assuming the export permits are irrelevant, Manley shows a gross disregard for Canada’s commitment to a restrictive military export policy, as well as the potential misuse of Canadian-built LAVs by Saudi Arabia. Alternatively, such a statement from a former Foreign Affairs Minister may actually shed light on the reality of how GAC’s Export Controls Bureau handles the export control process. It is already known that the Export Controls Bureau (which controls military exports) and GAC trade programs (which seek opportunities for military exports) operate in a state of tension, and some observers sense that the balance has shifted in favour of the exporter promoters.27 In July 2016, Steven Chase noted that the Canadian government had “quietly watered down its own

25 As Canadian arms control NGO Project Ploughshares noted in fall 2015: “Project Ploughshares has established that at the time that the Saudi deal was announced in February 2014, the required export permits had not been issued. This is especially significant, as a key element of the export permits is a human rights assessment to determine that the deal in question does not contravene Canada’s export control policies.” Cesar Jaramillo, "What We Know About the $14.8- Billion Deal to Provide Canadian-Made Military Equipment to Saudi Arabia," The Ploughshares Monitor 36, no. 3 (2015). 26 Manley, "We Can't Always Sell Weapons to People We Like." 27 Kenneth Epps, "Canada's Push into New Arms Markets," Ploughshares Monitor 34, no. 3 (2013).

MEETING OF THE MINDS GRADUATE STUDENT JOURNAL 1 (2017). DOI 10.5281/ZENODO.376783 7 mandate for screening the export of military goods”28 through changes to the recently-released 2015 Report on Exports of Military Goods from Canada.29 Perhaps Manley is accurate in portraying the export permits as a formality already promised to Saudi Arabia, instead of a robust consultation process. If so, the Canadian export policy should be ‘outed’ as a mercenary process which prioritizes economic, rather than ethical, interests. This article shall continue to assume that the policy does reflect an honest intention to restrict military exports. In this case, Dion’s admission that the government is a key participant in the deal contradicts a statement Justin Trudeau gave on the campaign trail in 2015 when he claimed that the deal did not involve the government, but was instead “an agreement between a manufacturing company here in Canada and Saudi Arabia.”30 In fact, the Canadian government was a key player in the negotiation, coordination, and now execution of the deal, through the vehicle of the Canadian Commercial Corporation (CCC). Established in 1946, the CCC was originally created to assist with the development of trade between Canada and Europe (specifically for the task of post-war reconstruction).31 In 1956, the crown corporation became an essential link in the Defence Production Sharing Agreement between the US Department of Defence and Canadian manufacturers.32 Essentially, the CCC acts as an intermediary between Canadian suppliers and international buyers, both helping to facilitate the transfer of goods and ensuring compliance from both sides.33 The Saudi-LAV deal is actually two separate contracts, one between General Dynamics and the CCC, and one between Saudi Arabia and the CCC. The Canadian government, through the mechanism of the CCC and other channels, has been involved in the negotiating and brokering of the LAV deal from the very

28 Steven Chase, "Ottawa Rewrites Mandate for Screening Arms Exports," The Globe and Mail, July 31, 2016. 29 A document which provides the most information on the military export control process of any sources published by the Canadian government. Export Control Division - Trade Controls Bureau, "Report on Exports of Military Goods from Canada," (Global Affairs Canada, 2015). 30 Canadian Press, "Duceppe Accuses Trudeau of Lying About Saudi Arms Sales," Montreal Gazette, October 12, 2015. 31 Canadian Commercial Corporation, "About CCC," http://www.ccc.ca/en/ccc/about-ccc. 32 Ibid. 33 Epps, "Canada's Push into New Arms Markets".

8 PAUL ESAU: SELLING OUT TO THE SAUDIS: A HISTORICAL ANALYSIS OF STEPHANE DION’S APOLOGY FOR CANADIAN MILITARY EXPORT CONTROLS beginning,34 and could possibly be held legally responsible if the deal falls through.35 The credibility of the government of Canada is at stake over this deal, but perhaps in a different way than Dion represents. The credibility of Canada as a potential business partner of repressive, dictatorial regimes is locked in combat with Canada’s credibility as an advocate of human security and UN-led arms control conventions. Only one of the two will survive.

Leverage

The next argument in Dion’s release is titled “Choosing the right lever to improve human rights in Saudi Arabia,”36 and includes two unconnected assertions:

The Government of Canada is committed to advancing human rights everywhere, including in Saudi Arabia. We do not miss an opportunity to raise issues with our Saudi Arabian counterparts, nor do we miss opportunities for positive engagement. There are over 16,000 Saudi Arabian students attending our universities, which will likely help to promote the liberalization of Saudi Arabian society. If we drop the contract, we will set back the clock on these productive efforts. And we will simply hand the contract to a non-Canadian—potentially more ambivalent—provider.

In essence, Dion is arguing that shipping $14.8 billion worth of weapons to Saudi Arabia is necessary to maintain positive influence with and help liberalize the kingdom. A more accurate summary of Dion’s thought might be that selling the Saudis weapons is a necessary step to convincing them to become more peaceful, although the logic appears absurd. Dion’s implication that the 16,000 Saudi students in Canadian universities are at risk if the deal is cancelled is a non-sequitur with no significant bearing upon the argument at hand.

34 “The federal government is front and centre in this deal. It brokered the deal and is the prime contractor, meaning it’s ultimately responsible for the delivery of these weapons to the Saudis. When Canada’s ambassador to Saudi Arabia gave Ottawa early notice the deal was coming together, he was positively jubilant. In an October, 2012, e-mail with the subject line “GDLS lands the Big One,” Thomas MacDonald informed the federal government of what had transpired and ended his missive with a jubilant expression: ‘Gotta LOV the LAV!’” Chase, "The Saudi Arms Deal: Why It's a Big Deal." 35 Although the acceptance of such a legal responsibility in the initial contract would seem to put the Canadian government (because of its parallel responsibility for signing export permits) in a conflict of interest. Canada, "Memorandum for Action to the Minister of Foreign Affairs," 2. 36 Dion, "Statement by the Hon. Stephane Dion, Canada's Minister of Foreign Affairs, on the Sale of Light Armoured Vehicles to Saudi Arabia."

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The final sentence of the above statement suggests that if Canada gives up its “lever” another country will simply assume the contract. This is indicative of the cutthroat nature of the global arms trade, which was estimated to be worth over $94.5 billion in 2014,37 and yet is still generally considered to be a buyer’s market. As Canadian arms control theorist Ernie Regehr has noted, “countries that impose restrictions, are likely to find a host of less discriminating competitors ready and willing to take their place. In consequence, restrictive policies carry a real economic cost – inevitably understood as undermining the national pursuit of prosperity.”38 As arms production has proliferated globally since the Cold War, the Western monopoly on the supply of weapons has begun to slip, and countries like Canada have had to fight harder for a piece of the lucrative, and increasingly competitive, pie. Yet the consequence of these deals (and the economic windfall they bring) has been an unrelenting series of conflicts in the developing world fought with weapons produced in the industrial world.39 Perhaps the possibility of relinquishing Canada’s piece of the pie (or at least the piece that violates Canadian export restrictions) is not as unthinkable as it seems, considering the multiple ways in which the industry has had a detrimental effect on both global stability and human rights.

Legality and Vigilance

Dion’s final ‘spin’ argument combines a renewed emphasis on the “stringent” nature of the Canadian arms export process successfully negotiated by the deal, an appeal to historical precedent, and a promise to remain vigilant. In Dion’s words:

Since 1986, Canada has had a stringent process in place for approving export permits for the sale of military equipment. One of the considerations is whether the equipment being sold would be used to violate human rights. Different versions of this military equipment were provided by Canadian companies to Saudi Arabia since 1993; our best, and regularly updated, information indicates that Saudi Arabia has not misused the equipment to violate human rights. Nor has the equipment been used in a manner contrary to the strategic interests of Canada and its allies.

37 Stockholm International Peace Research Institute, "Financial Value of the Global Arms Trade," https://www.sipri.org/databases/financial-value-global-arms-trade. 38 Regehr, "Military Sales," 210. 39 Regehr, Arms Canada: The Deadly Business of Military Exports, xvii.

10 PAUL ESAU: SELLING OUT TO THE SAUDIS: A HISTORICAL ANALYSIS OF STEPHANE DION’S APOLOGY FOR CANADIAN MILITARY EXPORT CONTROLS For the future, as with all export permits, the minister of foreign affairs retains the power to revoke at any time the permits should the assessment change.

As mentioned above, the Canadian export process is not, in reality, very “stringent,” nor is the history of Saudi Arabia’s LAV usage as spotless as Dion claims. Additionally, opponents of arms control have long noted that countries tend not to be punished for noncompliance with arms control protocols,40 a trend that the Saudi Arabia – Canada relationship seems to embody. It is hard to believe, if the current list of Saudi human rights violations is not sufficient to convince the Liberal government to cancel the deal, further infractions will somehow shift the balance. It is especially hard to foresee Dion backing out of the deal when one considers the lucrative nature of this contract, and the precedent of previous Saudi - Canadian LAV deals. When the current $14.8 billion deal was signed in the 2013-2014 fiscal year, it represented more than 95 percent of the $15.5 billion in Canadian military export deals signed that year, and was by far the biggest military export contract ever brokered by the CCC.41 The last time the London, Ontario factory that produces the LAV was awarded a significant deal with Saudi Arabia42 was in 1986, when it was still owned by GM Defence.43 Then Secretary of State for External Affairs Joe Clark negotiated the $1.9 billion44 deal after receiving assurances that the weapons systems would not be used against Israel, later defending the decision in a public controversy very similar to the one being held today. In order to facilitate the sale, the 1986 Mulroney government was forced to amend a previous prohibition on the export of automatic weapons from Canada.45 Ironically, in 1986 Clark was also responsible for leading a review46 on Canadian foreign policy that emphasized human rights concerns, resulting in the current GAC guideline against the

40 Colin S. Gray, House of Cards: Why Arms Control Must Fail, Cornell Studies in Security Affairs (Cornell University Press, 1992), 164. 41 Jaramillo, "What We Know About the $14.8-Billion Deal to Provide Canadian-Made Military Equipment to Saudi Arabia." 42 Through the intermediaries of the U.S. Foreign Military Sales program and the CCC. Canada, "Memorandum for Action to the Minister of Foreign Affairs," 2. 43 Stephanie Bangarth and Jon Weier, "Merchants of Death: Canada's History of Questional Exports," ActiveHistory.ca, April 18 2016. 44 BJ Siekierski, "Selling Armoured Vehicles to Saudi Arabia: A Canadian Tradition," iPolitics, February 11 2016. 45 Ernie Regehr and John Lamb to Disarming Conflict, January 31, 2016, http://disarmingconflict.ca/2016/01/31/time-to-review-canadas-military-exports-policy/. 46 Department of External Affairs, "Communique," news release, September 10, 1986, http://gac.canadiana.ca/view/ooe.sas_19860910BEP/1?r=0&s=1.

MEETING OF THE MINDS GRADUATE STUDENT JOURNAL 1 (2017). DOI 10.5281/ZENODO.376783 11 exporting of military goods to countries with a persistent record of human rights violations.47 Shipments of armored vehicles to Saudi Arabia have continued under all Canadian governments since,48 — approximately 2,900 LAVS so far as part of cumulative military exports to Saudi Arabia of around $2.5 billion.49 It was only a month after the government’s secret memorandum was made public that video evidence of LAVs being used by Saudi Arabia to repress dissidents between 2012 and 2015 was uncovered by The Globe and Mail reporter Steven Chase,50 but this finding has yet to have a discernable impact upon GAC’s previous decision.51 Sadly, this is in keeping with a historical tradition in Canadian guidelines for arms exports, which have proven time and time again to be neither as restricted nor as inflexible as advertised.52

National Security and National Prosperity

While Dion may wax eloquent about credibility, leverage, and precedent, the more compelling logic behind the Saudi LAV deal seems clearly that of strategy and economics. Saudi Arabia has become a key strategic ally of the Americans (and by consequence Canada) since the Gulf War, and is a lucrative arms market for Canadian military products.53 The April memorandum calls Saudi Arabia “an important and stable ally in a region marred by instability, terrorism, and conflict,”54 and noted that the country accounted for $3.9 billion in two-way merchandise trade with Canada in 2014.55 As Dion argues:

Security matters: Saudi Arabia is a strategic partner in an increasingly volatile region, particularly in the armed conflict against the so-called Islamic State of Iraq and the Levant (ISIL). Supporting our partners is essential in preventing the chaos, lawlessness, atrocities and terrorist

47 Regehr, Arms Canada: The Deadly Business of Military Exports, 101. 48 Regehr and Lamb, Disarming Conflict. 49 Canada, "Memorandum for Action to the Minister of Foreign Affairs," 2. 50 Steven Chase, "Saudis Use Armoured Vehicles to Suppress Internal Dissent, Videos Show," The Globe and Mail, May 11, 2016. 51 The memorandum does address the 2011 use of Canadian-made LAVs during the Bahrain upheavals, claiming, “to the best of the Department’s knowledge, Saudi troops were stationed to protect key buildings and infrastructure, and did not engage in suppression of peaceful protest.” Canada, "Memorandum for Action to the Minister of Foreign Affairs," 4. 52 Bangarth and Weier, "Merchants of Death: Canada's History of Questional Exports." Siekierski, "Selling Armoured Vehicles to Saudi Arabia: A Canadian Tradition." 53 Saudi Arabia was the second-largest importer of major weapons in the world between 2011 and 2015, accounting for 7 percent of global purchases. SIPRI (Stockholm International Peace Research Institute), Sipri Yearbook 2016 Summary (SIPRI, 2016), 20. 54 Canada, "Memorandum for Action to the Minister of Foreign Affairs," 3. 55 Ibid.

12 PAUL ESAU: SELLING OUT TO THE SAUDIS: A HISTORICAL ANALYSIS OF STEPHANE DION’S APOLOGY FOR CANADIAN MILITARY EXPORT CONTROLS attacks perpetrated by ISIL, al Qaeda and other terrorist groups active in the region and beyond.56

Just as none of our export guidelines seem to apply to military exports to the U.S. or other NATO allies, so none of our guidelines seem to apply to Saudi Arabia. The third goal listed in Canada’s Export Policy Handbook (mentioned above) is that exports “do not contribute to national or regional conflicts or instability.”57 Exporting to Saudi Arabia, which is currently involved in a proxy war with Iran, a hot war in Yemen, and an internal struggle against various dissidents, is in obvious violation of this goal. Further swaying the balance are the significant economic benefits the Saudi-LAV deal promises for Canadian manufacturers generally, the Canadian military industrial base specifically, and London, Ontario in particular. As Dion states:

The economy matters: Any time a contract is broken, financial penalties are sure to follow. In this case, it is the Canadian taxpayer who is on the hook. Cancellation would deprive almost 2,000 workers of their livelihood, principally in London, Ontario. We must take into account the chain of repercussions for an industry on which around 70,000 Canadian jobs directly depend and which plays an important role in fostering research and development in Canada.58

It can be hard to defend high-minded ideas of ethics and human rights when faced with such dire consequences for the Canadian economy. Still, it must be understood that this dilemma is not unprecedented, nor unforeseen. The GDLS- C facility in London, as well as its suppliers, have a history of holding the Canadian export office as a sort of economic hostage using precisely this form of calculus. In fact, the facility has been export-dependent since it switched production to LAVs, and has survived contract-to-contract ever since, relying heavily on foreign buyers. The GDLS-C facility in London used to be a diesel division plant that produced buses and earth-moving equipment. In the late 1970s, the faltering plant accepted a Canadian government contract to produce armoured vehicles as a temporary reprieve.59 Yet the Canadian military could not keep the plant running

56 Dion, "Statement by the Hon. Stephane Dion, Canada's Minister of Foreign Affairs, on the Sale of Light Armoured Vehicles to Saudi Arabia." 57 Export Controls Division, "Export Controls Handbook." 58 Dion, "Statement by the Hon. Stephane Dion, Canada's Minister of Foreign Affairs, on the Sale of Light Armoured Vehicles to Saudi Arabia." 59Regehr and Lamb, Disarming Conflict.

MEETING OF THE MINDS GRADUATE STUDENT JOURNAL 1 (2017). DOI 10.5281/ZENODO.376783 13 on domestic requisitions alone, and therefore the plant required foreign customers for its LAV production to remain profitable. 60 Since most of NATO already has the capacity to build armoured vehicles (or require significant offset agreements to buy Canadian), the LAV has generally been marketed to developing countries such as Saudi Arabia. Additionally, since the plant survives contract-to- contract, if the Canadian government were to deny export permits for a major contract, it would potentially force the plant into bankruptcy, taking the livelihoods of thousands of Canadians with it. This is exactly the situation faced by the Mulroney government while negotiating the original deal in 1986, when company officials warned “they [would] have to begin layoffs…within 16 months if [the company did] not get a new contract.”61 No government wants to take direct responsibility for destroying 2000 jobs and a major military industrial plant in one moment of ethical clarity. Consequently, the creation of export-dependent military production plants functions as a form of economic blackmail to protect the Canadian arms industry from true regulation. Each time the government encourages arms production and export as a way of buttressing Canadian military production, it creates more export-dependency and makes future enforcement of its export restrictions less likely. The loss of the London facility would also be a strategic blow to the Canadian military, as it would lose its primary repair facility for its own armoured vehicles. As John Manley states rather bluntly in his iPolitics article:

Whether one believes that Canada should offer its forces only in support of peacekeeping (a view I don’t happen to share), or should play a more robust role in global affairs, our armed forces plainly need vehicles, uniforms and ordinance to carry out their duties. Given that requirement, it stands to reason that Canadians should want to design and manufacture this equipment — and if we’re doing so, the economics of scale dictate exporting those same products.62

Manley’s argument is compelling if one ignores the ethical difficulties of his position, and articulates the economic logic that drives the contemporary arms trade. GAC’s ‘secret’ memorandum also argues that the GDLS-C facility is important to the development and survival of the Canadian military-industrial base.63 Possessing a domestic military-industrial complex capable of

60 Kenneth Epps, "Arms Export Win Is Human Rights Loss," The Ploughshares Monitor 35, no. 1 (2015). 61 James Travers, "Clark Willing to Sell Weapons to Saudis," The Ottawa Citizen, April 9 1986. 62 Manley, "We Can't Always Sell Weapons to People We Like." 63 Canada, "Memorandum for Action to the Minister of Foreign Affairs," 4.

14 PAUL ESAU: SELLING OUT TO THE SAUDIS: A HISTORICAL ANALYSIS OF STEPHANE DION’S APOLOGY FOR CANADIAN MILITARY EXPORT CONTROLS independently sustaining a nation’s war effort is a fundamental strategic goal. Unfortunately, as the complexity of military hardware has increased, it has become increasingly difficult to maintain domestic production for every required weapons system. The U.S. is probably the closest to having an independent military industrial complex, and it is sustainable only because the Americans are the world’s biggest military spenders and arms dealers.64 It therefore makes sense economically for the Canadian government to encourage and facilitate GDLS-C’s LAV exports, but economics is not the crux of the current dilemma. The flaw in Manley’s argument is his comparisons between the economics of exporting military systems and that of exporting non-military products. In any other industry, the primacy of economics over policy – this submission to the Smithian ‘invisible hand’ – might be defensible, but military exports by their very nature are not any other industry. Firstly, the customer in a military transaction is always another sovereign nation, and therefore military exports are always inherently political. Secondly, military wares, and especially repression technologies,65 are potential threats to human security and fuel for international conflict. Thirdly, the existence of the CCC itself, and the GAC requirement for export permits for military goods, is official acknowledgement that the Canadian government not only plays an essential role in orchestrating Canadian participation in the arms trade, but also accepts that some transactions could potentially contradict national and international security interests. The capacity of military exports to directly bolster the ‘hard power’ of another nation make them a foreign policy (and therefore governmental) concern, and major deals (like both contracts to sell LAVs to Saudi Arabia) have historically required high-level political support. Despite Stephen Harper,66 Justin Trudeau,67 and John Manley68 all defending the LAVs as simply transport vehicles, the LAVs are inarguably sophisticated weapons systems.69 Military exports have both economic and strategic implications, as well as ethical and geopolitical consequences, and

64 Sam Perlo-Freeman, "65 Years of Military Spending: Trends in Sipri's New Data," SIPRI (Stockholm International Peace Research Institute), https://www.sipri.org/commentary/blog/2016/65-years-military-spending. SIPRI (Stockholm International Peace Research Institute), "Sipri Arms Transfers Database," (SIPRI). 65 Weapons or systems that can be used by the state to repress and coerce its own population and repress dissent. These can include everything from guns, to night-vision goggles, to prison hardware or surveillance equipment. 66 David Pugliese, "Saudi Deal for 'Transport Vehicles', Not Arms," Ottawa Citizen, October 6, 2015. 67 Press, "Duceppe Accuses Trudeau of Lying About Saudi Arms Sales." “Canada, it should be pointed out, is not supplying the Saudis with equipment that can be used in torture or persecution of women. We are selling military vehicles — basically fancy trucks.” 68 Manley, "We Can't Always Sell Weapons to People We Like." 69 Chase, "The Saudi Arms Deal: Why It's a Big Deal."

MEETING OF THE MINDS GRADUATE STUDENT JOURNAL 1 (2017). DOI 10.5281/ZENODO.376783 15 therefore a restrictive export policy is not a sign of Canadian immaturity,70 but instead a concession to the globalized nature of the modern economy and polity. The dilemma surrounding the Saudi-LAV deal is not whether the deal makes economic sense, but instead a consequence of conflicting security paradigms. Manley and Dion endorse Canadian support of Saudi Arabia because of the kingdom’s assumed role as a strategic partner, especially since such ‘support’ translates to a lucrative $14.8 billion bolstering of the Canadian arms industry. On the other hand, Lloyd Axworthy, Liberal Minister of Foreign Affairs from 1996-2000, has criticized the deal as a violation of Canada’s historical commitment to a global-oriented ‘human security’71 paradigm. “Everybody says it’s for jobs,” Axworthy told The Globe and Mail in January, “but I think if you start counting up the price you pay in terms of instability and repression and forceful maintenance of order, you may be paying a high price.”72

Conclusion

It is disappointing – considering Canada’s long-standing commitment to human rights and Trudeau’s commitment to signing the UN Arms Trade Treaty73 – that Canada’s military export policies have not been implemented in regards to the Saudi-LAV deal. The overbearing praise showered on said policies by Dion and others have worked to disguise the multiple ways in which the deal violates the criteria of Canadian restrictions, and its pragmatic justification in economic and strategic terms. For example, consider Dion’s promise in the final paragraph of his conclusion: “we have decided to honour this contract, which provides thousands of jobs for Canadian families, and be more vigilant than ever about human rights. That is responsible conviction.” There is nothing responsible about proclaiming that one will simultaneously accomplish two mutually exclusive goals, yet that is what the Canadian Foreign Minister is promising. The same misdirection employed by Dion and Trudeau in pointing the finger at Harper’s Conservatives while secretly signing

70 “Third, as a mature country, we have to be able to deal with governments and regimes with which we do not always agree. The world is full of countries that do not share our values and beliefs. Should we adopt a policy of refusing to trade with people whose values are out of line with our own? Regrettably, that might leave us with a rather limited number of potential customers.” Manley, "We Can't Always Sell Weapons to People We Like." 71Axworthy has long been an advocate of human security as a principle of Canadian foreign policy. Lloyd Axworthy, "Introduction," in Human Security and the New Diplomacy, ed. Rob McRae and Don Hubert (Montreal & Kingston: McGill-Queen's University Press, 2001). 72 Chase, "The Saudi Arms Deal: Why It's a Big Deal." 73 Justin Trudeau made signing the UN Arms Trade Treaty one of his campaign promises in the 2015 national election. He has recently reiterated this promise. Bob Weber, "Trudeau Promises to Sign Arms Treaty, Slams Harper's Foreign Record," The Toronto Star, October 7 2015.

16 PAUL ESAU: SELLING OUT TO THE SAUDIS: A HISTORICAL ANALYSIS OF STEPHANE DION’S APOLOGY FOR CANADIAN MILITARY EXPORT CONTROLS the LAV export permits is now being harnessed to use the language of progressive liberalism as a cover for naked realpolitik. As late as June 2016, an official representative of GAC was still claiming in Parliament both that the Ministry was defending the “value of Canada’s reputation as a trading partner”74 and that Canada has “some of the strongest export controls in the world.”75 The tenuous nature of the Liberal position is partially explained by the history of the General Dynamics plant, as well as the precedent of previous arms deals with Saudi Arabia.76 From the very beginning, the plant has been dependent upon exports to supplement domestic orders, and Saudi Arabia has been the biggest foreign buyer. Consequently, the Saudi’s importance as a security partner has been enhanced by their economic importance as a recipient of Canadian military goods. The Canadian government has therefore been placed in an untenable position: allow the LAV deal and prove that the ‘restrictive’ Canadian export policy is largely myth, or cancel the deal and lose both a major customer of the Canadian defence industry and one of the last bastions of Canadian heavy manufacturing (the London facility itself). If history is any indication, Canada will continue to pursue a contradictory policy of high-minded rhetoric while moonlighting as a pragmatic, government-subsidized arms dealer, no matter which party happens to be in power.

Reference List

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74 Pam Goldsmith-Jones, "Debates of June 6th, 2016: House of Commons Hansard #66 of the 42nd Parliament, 1st Session," Michael Mulley, https://openparliament.ca/debates/2016/6/6/pam-goldsmith-jones-1/. 75 "Debates of June 3, 2016: House of Commons Hansard #65 of the 42nd Parliament, 1st Session," Michael Mulley, https://openparliament.ca/debates/2016/6/3/pam-goldsmith-jones- 3/. 76 GDLS-C has never been denied a permit for the export of armed vehicles to Saudi Arabia. Canada, "Memorandum for Action to the Minister of Foreign Affairs," 3.

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