OTTAWA -- The federal Liberal government says it plans to award a multibillion-dollar contract for hundreds of light armoured vehicles to General Dynamics Land Systems-Canada without holding a competition, while also giving the company in London, Ont., a $650-million loan.

The surprise loan and sole-sourced deal for 360 LAVs was announced today by Defence Minister Harjit Sajjan, only weeks before a federal election campaign in which the Liberals, New Democrats and Conservatives are expected to fight tooth and nail for seats across southern Ontario.

The government says the new LAVs are different from the ones GDLS has been building for Saudi Arabia as part of a $15-billion deal that has caused the company and federal government endless grief because of the Saudi kingdom's abysmal human-rights record.

It also says holding a competition was not in the public's interest because the new vehicles are largely the same as those already owned by the Canadian Forces.

The government, which did not immediately provide details on the loan, also says awarding the sole-sourced contract now will prevent layoffs while saving time and money after the company recently upgraded the military's existing LAV fleet.

Conservative defence critic James Bezan nonetheless accused the Liberals of "cynical electioneering" and trying to distract attention away from the SNC-Lavalin affair by announcing the deal with GDLS now.