The federal authorities is refusing to say why it quietly cancelled a contract for refurbished navy autos for Ukraine that the Canadian firm concerned says it’s nonetheless “prepared, prepared and in a position to provide.”
Defence Minister David McGuinty informed the Home of Commons defence committee this week that his division had cancelled the contract with Armatec Survivability in Dorchester, Ont., close to London, to refurbish 25 mild armoured autos, however mentioned he couldn’t clarify the explanation behind the choice.
Conservatives say the contract’s cancellation dangers making Canada seem as an unreliable ally to Ukraine and undermines the Liberals’ dedication to bolstering the home defence trade.
“Till simply within the final week, all people thought this venture was simply delayed however was nonetheless on observe for supply, and Armatec was nonetheless saying that they simply wanted the funds to begin flowing so they may begin refurbishing the autos,” defence critic James Bezan mentioned in an interview Thursday.
“I blame the federal government on this one.”
Conservatives tried to get solutions from Stephen Fuhr, the secretary of state for defence procurement, on the Home of Commons defence committee Thursday on why the contract was cancelled, however Fuhr deferred to McGuinty and the Division of Nationwide Defence (DND).
“I don’t know” why the contract was cancelled, Fuhr repeatedly mentioned.
Conservative MP Scott Anderson requested Fuhr how a lot of the $250 million he mentioned the contract was price has been misplaced, and whether or not the cash was included in Canada’s plan to succeed in two per cent of GDP in defence spending this fiscal yr.
Fuhr mentioned he didn’t know and that Ukraine navy help contracts aren’t inside the jurisdiction of the brand new Defence Funding Company he’s been tasked to guide.
A DND spokesperson mentioned the division couldn’t touch upon the contract with Armatec “as a consequence of confidentiality obligations.”
The Canadian Business Company, which has facilitated authorities procurement contracts for Ukraine assist, deferred inquiries to the DND.
Armatec has been awarded hundreds of thousands of {dollars} in Canadian defence contracts since 2007, in response to authorities data. It primarily refurbishes and enhances navy autos for the Canadian Armed Forces, and has additionally equipped components to the U.S. navy and different allies.
Armatec CEO Karl Pfister informed International Information his firm stands able to hold doing that work, however wouldn’t remark past a written assertion he mentioned was accredited by attorneys.
Get every day Nationwide information
Get the day’s prime information, political, financial, and present affairs headlines, delivered to your inbox as soon as a day.
“What I can say is Armatec is prepared, prepared and in a position to provide infantry combating car upgrades and related know-how to Canada and our allies in assist of self-defence efforts and the necessity to re-arm Europe,” he mentioned.
“I can also say that Armatec is a Canadian firm utilizing Canadian staff to advance Canadian innovation and know-how with a view to the deployment of infantry combating autos that surpass present Canadian capabilities.”
Bezan mentioned the corporate is underneath a non-disclosure settlement with the federal government that stops it from saying something extra, placing Armatec in “an unimaginable place” as its “long-term survivability” is in peril.
He mentioned it’s the primary time he’s seen a contractor prevented from talking after a contract is cancelled.
“I’ve by no means seen the Authorities of Canada gagging a contractor that’s attempting to ship tools to assist Canada and our allies. That is weird,” he mentioned.
“The query is, what are the Liberals attempting to cover?”
Why might a defence contract be axed?
Richard Shimooka, a senior fellow on the Macdonald-Laurier Institute who research defence coverage and procurement, mentioned there are a number of the reason why a contract just like the one with Armatec might be cancelled, however couldn’t communicate to the particular particulars.
He famous that many of the mild armoured autos in query had beforehand been deployed by the Canadian navy in Afghanistan, and had been “most likely fairly beat up” in the course of the decades-long struggle there.
“It’s attainable these autos are in a lot worse situation than was anticipated and (Armatec) could say ‘it’s now not financially attainable for us to do it underneath the contract phrases,’ and the federal government put its foot down,” he mentioned in an interview for example of an element that might spur cancellation.
“Given the Canadian penchant for working autos nicely previous their prime, so to talk, it’s price asking what sort of materials situation had been they delivered in?”
Shimooka doubted the cancellation spoke to a broader cost-cutting technique by the Liberal authorities or a shift in its strategy to aiding Ukraine. Somewhat, he mentioned it’s extra probably the federal government wished the venture achieved “rapidly” and determined that was now not attainable.
Bezan mentioned clear solutions are wanted.
“Up till the summer time, the Ukrainians had been nonetheless ready and questioning the place these autos had been, and nonetheless wished them,” he mentioned. “And there’s no dedication by the federal government to truly exchange this with anything.
“It simply exhibits the hypocrisy of presidency that they are saying they assist Ukraine, however don’t ship. They are saying that they will assist defence trade and are strolling away from them, costing jobs. And, you already know, that is about guaranteeing that we have now the defence functionality.”
The DND informed International Information that Canada “stays unwavering in its assist for Ukraine and its precedence to offer navy assist that’s each well timed and instantly operational for Ukraine’s Armed Forces.”
“As a part of the $2 billion in extra navy help introduced by Prime Minister Carney, Canada can be offering extra armoured capabilities to Ukraine,” the spokesperson mentioned.
“We’re expediting different contracts by means of the Canadian Business Company to get efficient capabilities into Ukrainian fingers as quickly as attainable.”
The Prime Minister’s Workplace says the extra $2 billion in navy assist contains $835 million for armoured autos and different essential tools.
Canada is within the means of delivering 50 armoured autos constructed by London, Ont.-based Common Dynamics Land Methods-Canada underneath a separate $650 million contract signed in 2023.
The primary autos had been delivered to Europe in June 2024, and McGuinty mentioned Tuesday that the remaining autos are on observe to be delivered by the tip of this yr.
© 2025 International Information, a division of Corus Leisure Inc.
