Canadian Prime Minister Justin Trudeau. (Dario Ayala/Reuters)

Canada is grappling with how to respond to the killing of journalist Jamal Khashoggi, apparently torn between a desire to stand up to Saudi Arabia and breaking an arms deal at a steep cost.

Since Saudi Arabia admitted Saturday, after weeks of denial, that Khashoggi was killed inside the Saudi Consulate in Istanbul, Canadian Prime Minister Justin Trudeau’s government has faced calls to cancel a 2014 contract for the sale of light armored vehicles to Saudi Arabia.

The export of arms was negotiated by the previous government but given a final green light by Trudeau’s administration. Trudeau said Thursday that the terms of the deal, which are largely secret, include a punitive cancellation policy “in the billions of dollars.” 

On Thursday, he told reporters that his government is undertaking a review of export permits to the kingdom. “We will continue to work with our allies around the world in order to get better answers on this incident and talk about the consequences,” Trudeau said in Ottawa.

Since Khashoggi disappeared Oct. 2 after entering the Saudi Consulate in Istanbul, the United States, Canada and major economies in Europe have scrambled to act together, offering statements of condemnation but little else.

President Trump has both defended Saudi Arabia and criticized its explanation of Khashoggi’s death as the “worst coverup ever” but has insisted that the killing not jeopardize U.S.-Saudi arms deals. 

The European Parliament on Thursday passed a nonbinding resolution condemning the killing of Khashoggi, a Washington Post contributing columnist, and urging a European Union-wide arms embargo on Saudi Arabia in response.

The move came several days after Germany became the first Western nation to suspend future arms sales to Saudi Arabia. But it remains unclear whether the resolution will pressure the governments of individual E.U. member states, particularly Britain and France, to follow suit in giving up their own lucrative contracts with the Saudis.

Any further European action will up the pressure on Trudeau, who is fresh off politically bruising trade negotiations with the United States and Mexico and looking ahead to an election in 2019.

“This is treacherous political territory in an election year, for anybody,” said Janice Stein, the founding director of the Munk School of Global Affairs and Public Policy at the University of Toronto. “Canada has been struggling to find exactly the right level of response.”

The exact terms of the arms deal have never been disclosed. The previous prime minister, Stephen Harper, once referred to a sale of “trucks” to Saudi Arabia. Trudeau once spoke of “Jeeps.” 

But the Canadian Broadcasting Corp. this year obtained documents showing that the deal involved 900 light armored vehicles, including more than 100 designed for “heavy assault.”

The deal is so secret — and politically toxic — that Ed Fast, who was minister for international trade in Harper’s government and announced the deal in 2014, now says he knows little about the details, including the cancellation penalty that Trudeau mentioned. 

“The expectation that we would know every single element of that contract is, I think, an unreasonable expectation,” said Fast, who is now an opposition figure in Parliament. 

Over the past year, as Saudi Arabia stepped up its military involvement in the conflict in Yemen, there have been repeated calls for Canada to pull out of the arrangement.  

In March, Trudeau defended the decision to go through with the sale. “Permits are only approved if the exports are consistent with our foreign and defense policies, including human rights,” he said. “Our approach fully meets our national obligations and Canadian laws.”

The issue emerged again this summer, when Canadian Foreign Minister Chrystia Freeland sent out two tweets critical of Saudi Arabia’s crackdown on female activists. The criticism led to a diplomatic standoff in which Saudi Arabia froze its investments in Canada, recalled its ambassador and gave the Canadian ambassador in Riyadh 24 hours to leave.

Canada stood its ground on the message but did not scrap the deal. 

The question now is whether global outrage over Saudi Arabia’s role in Khashoggi’s death will change Ottawa’s calculus.

The deal’s defenders argue that pulling out will be costly to taxpayers, in money and in jobs at the southern Ontario factory where the military vehicles are made.

With parts of the province reeling from dairy provisions in the preliminary North American trade agreement, known USMCA, the political cost of canceling the military sale to Saudi Arabia could be high, analysts said. 

Hani Faris, an adjunct professor of political science at the University of British Columbia who specializes in the Middle East, argued that the economic hit would be small relative to the size of Canada’s economy. 

“Whatever the government decides, it is not going to affect the economy in any serious manner,” he said. “If it comes to that, Canada can stomach it and move on.”

Still, he did not expect Canada to make a big move on its own, he said.

Stein, of the Munk School, said one lesson from this summer’s diplomatic standoff is that Canada’s taking a stand against Saudi Arabia on human rights without the support of other nations does not work well. 

She predicted that Canada would continue to work with European allies to craft a strategy that leaves the deal intact but sends a message, perhaps by sanctioning individuals implicated in Khashoggi’s death.

“In the absence of clear leadership from the United States, others are now coordinating their policy,” she said. “In terms of effectiveness, working alone is not an option.”

Ross reported from Montreal. Quentin Aries in Brussels and James McAuley in Paris contributed to this report.