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Head of Crown agency calls Middle East ‘strategic region’ for arms sales

Prime Minister Stephen Harper tours the General Dynamics Land Systems Canada plant, next to a LAV 6.0 (Light Armoured Vehicle) being built at the facility in London, Ont., in May, 2014.

Dave Chidley/The Canadian Press

The head of the Canadian government agency that brokered a controversial deal to supply $15-billion worth of armoured fighting vehicles to Saudi Arabia sees the Middle East as "a strategic region" for Canadian arms sales.

Martin Zablocki, the president and chief executive of Canadian Commercial Corp., recently told an Abu Dhabi-based newspaper that he considers the union of Arab states in the Persian Gulf one of the hottest markets in which to sell military wares.

The Canadian government, which is brokering this deal, has refused to divulge how it is justifying the sale to Saudi Arabia – notorious for human rights abuses – under Ottawa's export control rules. It is by far the largest military export contract brokered by the Canadian government.

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The story of how Canada ended up with the Saudis as a major arms customer traces back to the Canadian Commercial Corp., which was first formed to funnel reconstruction aid to Europe after the Second World War. It now helps firms, many in the security and defence business, make foreign sales.The agency has pivoted in recent years to seek new markets for military goods – part of a push by the federal government to beef up Canada's role as an arms dealer.

Speaking in February to The National, a United Arab Emirates newspaper, Mr. Zablocki said Canada hopes to find more business in Gulf Cooperation Council states such as Saudi Arabia, Kuwait, Bahrain and the UAE as defence spending falls in the United States.

(The newspaper interviewed Mr. Zablocki at the International Defence Exhibition and Conference, an arms fair, where he was scouting for business.)

"We still see the GCC as one of the primary regions in the world for military procurement," Mr. Zablocki said. "In the current economic environment, they are spending more money than many other regions."

He said the 2014 Saudi deal has built momentum for Canada in the region. "For us in Canada, we serviced the U.S. for many years – and this is an area where definitely their budgets are going down," he said. "So with the dynamic and with the money being spent in the Middle East, it's a strategic region for Canada in many fronts."

"More than being just a passive intermediary, the CCC … is an active promoter of Canadian military exports," said Cesar Jaramillo of Project Ploughshares, an anti-war group. "The question is whether this promotion includes countries with dire human rights records, such as Saudi Arabia."

Starting in March, The Globe and Mail has sought interviews with Mr. Zablocki, but his agency says he cannot discuss the details of the Saudi contract to buy fighting vehicles made by General Dynamics Land Systems Canada of London, Ont. It also declines to discuss specific business pursuits of the agency.

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The government is determined to keep a lid on the details of this deal, which is coming under increased scrutiny after much-publicized incidents of torture and mistreatment by Saudi authorities. These include the flogging sentence for blogger Raif Badawi, whose family obtained refuge in Canada.

The Department of Foreign Affairs, by its own stated rules, is required to screen requests to export military goods to countries "whose governments have a persistent record of serious violations of the human rights of their citizens." Among other things, it must obtain assurances that "there is no reasonable risk that the goods might be used against the civilian population."

Foreign Affairs argues it must keep the deal's deliberations secret, citing the need to protect the "commercial confidentiality" of General Dynamics Land Systems Canada.

For many years, military sales to the United States have formed the backbone of the business at the Canadian Commercial Corp. In a 2013-14 report, the agency said its work sustained more than 18,830 jobs in Canada, largely in the defence and security sector.

Pentagon budget cuts drove the corporation to look further abroad for arms buyers. In 2009 it created a new line of business, Global Defence and Security Sales, to seek new customers. This move into "non-traditional defence and security markets will require an increased vigilance for responsible and ethical business conduct," the agency says in its latest published corporate plan.

Military budgets in the Middle East and North Africa have been rising in recent years, despite falling oil prices, as regimes react in part to the emergence of new terror groups such as the Islamic State, al-Shabab and Boko Haram.

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About the Author
Parliamentary reporter

Steven Chase has covered federal politics in Ottawa for The Globe since mid-2001, arriving there a few months before 9/11. He previously worked in the paper's Vancouver and Calgary bureaus. Prior to that, he reported on Alberta politics for the Calgary Herald and the Calgary Sun, and on national issues for Alberta Report. More

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