Liberals unveil $3B sole-source deal for armoured vehicles ahead of election

OTTAWA — The federal Liberal government has unveiled plans to award a sole-source contract for hundreds of light armoured vehicles to General Dynamics Land Systems-Canada, while also promising the London, Ont., company a $650-million loan.

The surprise deal and loan were announced by Defence Minister Harjit Sajjan on Friday, only weeks before the federal election, sparking Conservative allegations the Liberals were trying to buy votes and distract from the SNC-Lavalin affair.

While final negotiations are still underway, the government says it plans to spend $3 billion for 360 LAVs as well as associated infrastructure upgrades and testing, which will replace two of the army’s aging armoured vehicle fleets.

The Defence Department spokeswoman Jessica Lamirande said the vehicles the government will be purchasing through the pending deal are different from those GDLS is building as part of a $15-billion deal between Canada and Saudi Arabia.

That deal has caused the company and federal government endless grief since it was brokered in 2014, partly because of criticism about the sale of weapons to the kingdom given its abysmal human-rights record.

There have also been reports that Saudi Arabia has failed to pay for the hundreds of vehicles it has already received, with a CTV report in June pegging the outstanding debt at more than $1 billion.

The new LAVs are instead largely the same as those already being used by the Canadian Forces, Lamirande said, which was one reason the government decided to forgo a competition and move on negotiations with GDLS.

Awarding a contract now rather than in several years, as the Defence Department had planned, will also save time, money and prevent layoffs at the company as GDLS recently upgraded the military’s existing LAV fleet, she added.

Departmental documents show officials had not planned to start moving out on the project in earnest for several more years.

During an event with Sajjan in London on Friday, GDLS vice-president John Ellison underscored the economic importance of the sole-sourced deal, saying it “represents good jobs for our employees and our network of suppliers in all regions of Canada.”

Neither the government nor GDLS provided details about the loan, including whether it was intended to cover a shortfall in payments from Saudi Arabia.

Conservative defence critic James Bezan blasted the Liberals over the timing of Friday’s announcement even as he expressed his party’s support for GDLS and the purchase of needed equipment for the military.

“After failing to deliver for the Canadian Armed Forces over the past four years, the Liberals are now desperately using the needs of our military to distract from Justin Trudeau’s SNC-Lavalin corruption scandal right before an election,” he said in an email.

“While GDLS is a trusted partner and Conservatives support its workers, today’s announcement is nothing but cynical electioneering from a scandal-plagued Liberal government that will do anything and say anything to cling to power.”

Southern Ontario has long been a battleground region for the three major parties, with the Liberals and NDP fighting for the urban centres of London, Kitchener-Waterloo and Windsor while the Tories have taken large swaths of the rural countryside.

Asked about the announcement’s timing, Public Procurement Minister Carla Qualtrough’s spokeswoman Ashley Michnowski said the project was part of the Liberals’ 2017 defence policy “and has been planned over many months.

“This project is important to ensure the Canadian Armed Forces have the equipment they need to do the work we ask of them.”

Qualtrough’s office also said the project would sustain 1,650 jobs in the London area and around 8,500 across Canada, “bringing certainty to both GDLS and the community of London.”

Defence analyst David Perry of the Canadian Global Affairs Institute said he believes the pending deal with GDLS, much like the government’s decision to add a third shipyard to its national shipbuilding plan, could have been announced months earlier.

The process for naming that shipyard was launched two weeks ago after more than a year of discussion, with many observers expecting the government to choose Davie Shipbuilding in Levis, Que.

“But that doesn’t mean some of these on their own aren’t actually objectively good ideas,” he said.

“What they did today was smart…. It’s clearly an important opportunity to move a program significantly faster than intended because this project wasn’t slated to go for another three or four years.”

The institute, which describes itself as a non-profit organization specializing in non-partisan, unbiased and independent analysis of Canadian public policy options, reported in its most recent annual report that General Dynamics Land Systems was one of several of its financial sponsors.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Red Deer & District Chamber of Commerce. (Contributed photo)
Red Deer & District Chamber of Commerce announces business of the year winners

All finalists ‘displayed courage’ this year, says chamber CEO

More than 400 COVID-19 cases reported in Alberta Wednesday, according to multiple reports. (File photo)
Over 400 additional COVID-19 cases Wednesday

3,372 active cases of COVID-19 in Alberta

A 47-megawatt solar power project has been proposed for a site southwest of the Nova Chemicals petrochemical complex.
Map contributed
$52-million solar power project proposed for Joffre

Project to be built southwest of Nova Chemicals plant could be producing power by the end of 2021

AnnaMarie Lea, artistic director of Lacombe’s Cow Patti Theatre, thinks a lot of people would love to focus on something other than the pandemic, with a few hours of entertainment. (Contributed photo).
Some Red Deer-area shows will go on — with new pandemic precautions

Some theatrical productions are happening under new rules

Red Deer Mayor Tara Veer will be at the legislature Thursday to urge members of the UCP caucus to drop the plan to consolidate EMS dispatch by Jan. 4. (Photo by BYRON HACKETT/Advocate Staff)
Red Deer mayor takes EMS consolidation fight to Edmonton

Mayors of Red Deer, Lethbridge, Calgary and Wood Buffalo to address UCP caucus on Thursday

Alberta Premier Jason Kenney arrives for an announcement at a news conference in Calgary, Alta., Tuesday, Sept. 15, 2020.	Kenney is isolating at home after one of his ministers tested positive for COVID-19. THE CANADIAN PRESS/Todd Korol
Alberta premier isolating after minister tests positive for COVID-19

Alberta Premier Jason Kenney is isolating at home

Tampa Bay Rays' Brandon Lowe rounds the bases after a home run off Los Angeles Dodgers starting pitcher Tony Gonsolin during the first inning in Game 2 of the baseball World Series Wednesday, Oct. 21, 2020, in Arlington, Texas. (AP Photo/Eric Gay)
Lowe homers twice, Rays hold off Dodgers 6-4 to even Series

Lowe homers twice, Rays hold off Dodgers 6-4 to even Series

Mighty Heart is held outside trainer Josie Carroll's stable by exercise rider Des McMahon, as the colt is washed down after being breezed at Woodbine Racetrack in Toronto on October 15, 2020. Mighty Heart will make his Triple Crown quest from the the No. 8 post Saturday. The Queen's Plate and Prince of Wales champion was named the even-money favourite in the draw Wednesday for the $400,000 Breeders' Stakes. THE CANADIAN PRESS/Chris Young
Mighty Heart to take run at ending Triple Crown drought in $400,000 Breeders Stakes

Mighty Heart to take run at ending Triple Crown drought in $400,000 Breeders Stakes

Toronto Blue Jays President Mark Shapiro watches during baseball spring training in Dunedin, Fla., on Friday, February 24, 2017/ Short on specifics and long on bullishness, Shapiro set an optimistic tone during his first general media availability since the team was eliminated from the post-season a few weeks ago. THE CANADIAN PRESS/Nathan Denette
Toronto Blue Jays president Mark Shapiro short on specifics, long on bullishness

Toronto Blue Jays president Mark Shapiro short on specifics, long on bullishness

Liverpool's Fabinho, saves from the goal line after a header from Ajax's captain Dusan Tadic from scoring during the group D Champions League soccer match between Ajax and Liverpool at the Johan Cruyff ArenA in Amsterdam, Netherlands, Wednesday, Oct. 21, 2020. (AP Photo/Peter Dejong)
Real Madrid beaten again, Bayern surges in Champions League

Real Madrid beaten again, Bayern surges in Champions League

Toronto Wolfpack captain Josh McCrone raises the Betfred Championship Trophy alongside teammates after defeating the Featherstone Rovers in the Million Pound Game in Betfred Championship rugby league action in Toronto on October 5, 2019. THE CANADIAN PRESS/Cole Burston
Financially troubled Toronto Wolfpack could learn fate soon as early as next week

Financially troubled Toronto Wolfpack could learn fate soon as early as next week

Kansas City Chiefs' Demarcus Robinson (11) holds off Buffalo Bills' Tre'Davious White (27) as Bills' Justin Zimmer (61) also pursues during the second half of an NFL football game, Monday, Oct. 19, 2020, in Orchard Park, N.Y. (AP Photo/Adrian Kraus)
Bills defence looks to rebound after consecutive losses

Bills defence looks to rebound after consecutive losses

CPL champion Forge FC ready for CONCACAF League opener in El Salvador

CPL champion Forge FC ready for CONCACAF League opener in El Salvador

Most Read