Canada scraps C$800 million General Dynamics buy: paper

Fri Jun 6, 2008 9:23am EDT
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OTTAWA (Reuters) - Canada has scrapped a C$800 million ($785 million) military contract with a subsidiary of General Dynamics and no longer plans to sign a C$700 million deal with Rheinmetall Defence, the Le Devoir newspaper said on Friday.

The paper quoted a military official as saying the deals were for equipment the armed forces no longer needed.

Ottawa said in October 2003 that it would buy 66 Stryker vehicles from General Dynamics Canada to replace the country's aging Leopard main battle tanks. The Strykers have eight wheels and less armor than a tank.

Canada now has 2,500 troops in southern Afghanistan, where they frequently clash with the Taliban, and commanders have decided they need the Leopards after all.

Le Devoir said Ottawa had planned to buy 33 multipurpose vehicles from Rheinmetall Canada but would now not sign the contract.

No one from the Canadian defense ministry or the office of Defence Minister Peter MacKay was immediately available for comment.

($1=$1.02 Canadian)

(Reporting by David Ljunggren; editing by Janet Guttsman)