Defence Minister Declines to Say Why Canada Cancelled Contract to Send Armoured Vehicles to Ukraine

Defence Minister David McGuinty says a federal contract to provide refurbished troop carriers to the Ukrainian military has been cancelled, but has declined to disclose the reason for the decision.

The $250 million contract to send 25 armoured vehicles to Ukraine was launched two years ago through a defence contract broker. It has since been cancelled for reasons that McGuinty told the Standing Committee on National Defence he is unable to share.

“I wish I could give you more insight into the reasoning behind the department’s decision to cancel the contract, but I’m not in a position to do so,” McGuinty said while testifying before the committee on Oct. 21.

The deal, which was never formally announced, was negotiated by the Canadian Commercial Corporation (CCC), a Crown corporation that brokers defence contracts and called for sending 25 decommissioned Canadian Armed Forces troop carriers to Armatec Survivability, a defence manufacturing company near London, Ont.

Armatec had agreed to refurbish the vehicles, after which they would be sent to aid in Ukraine’s ongoing war against Russia.

The Armatec deal was removed from CCC’s quarterly reports this summer, throwing the status of the contract into doubt. McGuinty declined to answer additional questions from Conservative MP James Bezan about why Ottawa was pulling out of the contract, which Bezan said could’ve supported Canadian jobs and Ukraine’s efforts to defend against Russia’s ongoing invasion.

“There is a decision that’s been taken to nullify the contract with that company presently,” McGuinty confirmed Oct. 21. “I can’t go any further in terms of discussing the merits. We’ll see how that evolves in terms of relationship to the department and contractor.”

Bezan, who also serves as his party’s defence critic, accused Ottawa of putting a “gag order” on Armatec to prevent it from talking about the deal. The CCC has also declined to comment on the cancellation, saying that it can’t discuss the matter due to contractual confidentiality rules.

McGuinty said Canada is currently providing new armoured combat support vehicles to Ukraine built by General Dynamics Land Systems, a defence manufacturer based in London, Ont., as part of a $650 million contract signed two years ago. The first vehicles arrived in Europe in June and the rest are slated to arrive before year’s end.

“There’s a very strong resolve by Canada and NATO as well as a whole to continue to support the brave women and men of Ukraine who are fighting a very difficult war,” McGuinty said.

Prime Minister Mark Carney committed to sending $2 billion more in military assistance to Ukraine earlier this year, as well as a $2.3 billion loan to boost Ukraine’s efforts to reconstruct infrastructure.

Elsewhere in his committee testimony, McGuinty said the Department of National Defence (DND) is still reviewing an F-35 fighter jet contract with the United States, which Carney originally said would be complete by the end of this summer. Secretary of State for Defence Procurement Stephen Fuhr said earlier this month he does not believe Ottawa will pull out of the contract to buy 16 F-35s from U.S. via defence contractor Lockheed Martin because the aircraft are already being built.

The F-35 contract was announced two years ago by the Trudeau government and entailed buying 88 F-35s from the U.S., however Carney asked for a review of the deal this spring after becoming prime minister. While Canada has legally committed to purchasing the first 16 jets, the government is considering a mixed fleet of various jets. Committee members Oct. 21 voiced concern about how Canada would train enough pilots proficient in flying various jets, including the option of the Swedish-made Saab Gripen.

Conservative MP Cheryl Gallant questioned the delay in announcing the results of the F-35 review, saying it’s being stalled to use as leverage in ongoing trade negotiations with the United States.

“We will take the time we need,” McGuinty said, adding that Gallant’s statements on it being used for leverage were a “mischaracterization.”