Canada Condemns Libya, Restricts Aid to Firms Doing Business There

Canada on Friday condemned Libya for its ties to international terrorism and ordered limited action in support of President Reagan’s call for international sanctions against Col. Moammar Kadafi’s regime.

The action stopped short of an economic embargo or even encouraging Canadians to leave the North African Arab nation. In a statement released from his country retreat at Meech Lake, Quebec, Prime Minister Brian Mulroney said he has ordered an end to all government assistance to Canadian firms pursuing business in Libya.

He also said that government-provided insurance will be cut off for “new business activities.” Mulroney’s statement added that all new contracts will be halted for the export of oil-drilling equipment containing unique Western technology. However, Canadian firms in Libya will continue to operate and can seek new business with their own financing.

Will Cost $14 Million

External Affairs Minister Joe Clark said that these moves against Kadafi will cost Canada about $14 million. Canada’s two-way trade with Libya totals only about $65 million a year, while about 1,300 Canadians work in Libya, most of them in the oil business. Mulroney said that his government “has been deeply concerned about support that the Libyan regime has given to extremists” and is urging “Canadians not to seek to fill those jobs which have been vacated by American citizens leaving Libya.”

But he added that there is no legal way to require Canadians to leave the country. And he only vaguely dealt with the question of advising Canadians whether they should leave or not, saying that none appeared to be in danger but that “they would do well to look to their particular circumstances . . . and assess whether they have grounds for anxiety.”

As limited as these new steps are, Mulroney pointed to steps that Canada has previously taken to restrict contacts with Libya, including a ban on the sale of all military goods and other strategic material, including civilian aircraft.