Spat hits home for London plant

OTTAWA— The sudden deterioration in the Saudi-Canadian relationship is probably grabbing the attention of people in the city of London, Ont., more than anywhere else in the country.

The city’s General Dynamics Land Systems plant has been supplying light armoured vehicles to Saudi security forces, thanks to a huge, $15-billion contract signed by the federal government in 2014.

The 14-year arms deal, which directly employs about 2,000 people, was described at the time by the previous federal Conservative government as the largest advanced manufacturing export contract in Canadian history.

Many are now wondering if Canada’s contract with Saudi Arabia — which is also highly controversial — could be at risk.

Over the weekend, a diplomatic dispute prompted Saudi Arabia to freeze new trade and investment deals with Canada, expel Ottawa’s ambassador and recall its own envoy.

It’s also cancelling scholarships for more than 15,000 Saudi students attending Canadian universities, which will yank away big economic benefits Canada reaps from international tuition fees.

The moves came in retaliation to a Canadian government tweet that said it was “gravely concerned” about the arrests of civil society and women’s activists in the Saudi kingdom.

In London, there are worries about the potential economic fallout from the conflict.

“It’s definitely concerning,” said Jim Reid, a union leader who represents nearly 500 workers at the General Dynam- ics facility in London — an area that’s seen major factory closures over the years.

“It is now the largest employer in the London region ... It’s basically the last big show we’ve got.”

Reid, president of Unifor’s Local 27, said the operation supports up to 7,000 spinoff jobs and he hopes the Saudi government will continue to live up to its existing contract.

Reid said there are several factors playing in the agreement’s favour: the Saudis would have to pay penalties if they walk away from the deal, a pullout could hurt the country’s reputation with other international trading partners and, perhaps most importantly, Riyadh wants the model of armoured vehicle that’s produced in London.

“Hopefully, this thing blows over,” Reid said.