Ottawa urged to rein in Crown corporation on arms deals abroad

The Crown corporation that arranges Canadian arms sales abroad has to be stopped from making deals with human-rights violators that become practically impossible for the government to cancel, say two international arms-trade watchdogs.

Project Ploughshares and Amnesty International say the upcoming ratification of the United Nations Arms Trade Treaty gives the governing Liberals a chance to prevent a repeat of the controversial deal the Canadian Commercial Corporation signed with Saudi Arabia in 2014 to sell $15 billion worth of Ontariomade light armoured vehicles.

The unassumingly named Canadian Commercial Corporation is a federal agency that helps Canadian companies sell all sorts of goods, including weapons, to foreign governments. The Trudeau Liberals say they are bound by a contract to sell the armoured vehicles, arranged under the previous Conservative government, and have cited undisclosed penalties that would cost Canada billions of dollars if the federal cabinet blocks the deal.

The government is reviewing all future export permits for sales to Saudi Arabia in response to the October murder of journalist Jamal Khashoggi in the Saudi consulate in Istanbul, Turkey. Saudi Arabia is also one of the countries fighting in a civil war in Yemen, which has ground to a stalemate with rebel forces in control of much of the country.

International Trade Minister Jim Carr directed the Canadian Commercial Corporation in a September letter to consider the human-rights provisions of the UN treaty on international arms deals before approving all future arms deals. Canada has signed the agreement but Parliament hasn’t yet passed Bill C-47 to ratify it formally.

But Project Ploughshares and Amnesty say the government needs to put the requirement to consider customers’ human-rights records into law, and they plan to tell the Senate foreign-affairs committee so during its hearings on the bill that are expected this week.

It is unacceptable that the corporation inked the deal with Saudi Arabia in early 2014, more than two years before the newly elected Liberal government approved the export permits, said Kenneth Epps, Ploughshares’ policy adviser on the treaty.

“In our view, that’s exactly the wrong way around. The Canadian Commercial Corporation should not be in a position to sign any contracts involving export permits until those exports permits are authorized,” Epps said in an interview.

In a Sept. 24 letter to the chair of the corporation, Carr directed Douglas Harrison to “closely study” Bill C-47 and “take all necessary steps to ensure that CCC’s due-diligence assessments seek to ensure that all transactions meet this threshold going forward.”

Carr told the corporation it has a deadline at the end of this month to come up with a plan for how Canada’s international human-rights obligations would “be explicitly and transparently incorporated into its corporate social-responsibility objectives and procedures.”

Alex Neve, Amnesty’s Canadian secretary general, said the new direction from Carr is a step forward but not enough.

“That isn’t law. That isn’t something that would necessarily remain the case from government to government, and doesn’t give a sense of something that is binding and enforceable,” Neve said. “C-47, in our view, offers a critical opportunity to fix that and fix it through law, so it will be clear and transparent and binding.”

Epps said the Senate should amend the bill so that it specifies all Canadian government departments, agencies and Crown corporations must comply with the treaty.

“The Canadian Commercial Corporation should be held to the same standards as Global Affairs Canada in authorizing arms exports,” he said.

The Senate committee had yet to formally announce any new meetings as of Friday afternoon.