Foreign Affairs Minister Stéphane Dion insists Canada still has leverage over the controversial contract to sell light armoured vehicles to Saudi Arabia despite the Star’s revelation that the federal government could be on the hook for a multibillion cancellation penalty.

“Each time you break a contract, there is always the danger of penalties,” Dion said Monday. “I always said that, but this is not the issue, because we’re not — we’ll respect the contract.”

At the same time, Dion insisted Canada’s hands are not tied when it comes to ensuring “that the military equipment that any Canadian company is selling abroad is not used against human rights and the interests of Canada and our allies.”

Dion said the arms “export permits allow Canada to be sure that military equipment . . . sold by Canadian companies is not misused by the country that received them.”

The Star on Saturday reported the cancellation penalty is in the multibillion-dollar range, under the contract signed by the previous Conservative government.

Cesar Jaramillo, executive director of Project Ploughshares, said his greater concern is Dion has made up his mind that the contract will continue despite valid questions about the human rights implications of proceeding with the deal.

In signing export permits for the vehicles, said Jaramillo, Canada has already given up “leverage.”

“They speak of evidence, but the threshold (for export approval) is neither certainty nor evidence, it is reasonable risk” the weaponized vehicles might be used against unarmed populations, he said. “The practical difference is if you use ‘evidence’ — this is something that takes place after the exports have taken place and after the human rights violations have occurred.”