Prime Minister Justin Trudeau appears to be inching closer to cancelling Canada's $15-billion deal to sell light armoured vehicles to Saudi Arabia.

Trudeau said Wednesday that his government is looking at the contract with Saudi Arabia to see what can be done.

He says Canadians expect there to be consequences as more information emerges about the brutal murder of journalist Jamal Khashoggi in the Saudi consulate in Turkey earlier this month.

The Saudi government has said Khashoggi died in a fist fight but Canada and other countries say Riyadh's explanation lacks credibility and are calling for a detailed investigation.

On Tuesday, Trudeau seemed reluctant to cancel the deal with Saudi Arabia, billed as the largest arms deal in Canadian history.

He cited significant financial penalties — as much as $1 billion or more — built into the contract signed by the previous Conservative government.

But he's now suggesting the government is looking for ways to cancel the contract without triggering those penalties.

"We are a looking at ... suspending export permits, which is something we've done in the past," he said on his way into a Liberal caucus meeting Wednesday.

"We're also looking at the contract to try and see what we can do because obviously, as we get clarity on what actually happened to Jamal Khashoggi, Canadians and people around the world will expect consequences."

It's not clear who would actually receive the money if penalties had to be paid for breaking the contract: Saudi Arabia or General Dynamics Land Systems, whose plant in London, Ont., is building the light-armoured vehicles, or LAVs. The government has so far declined to comment because of commercial confidentiality.

Turkish officials say a 15-man Saudi hit squad — including at least one member of Saudi Crown Prince Mohammed bin Salman's entourage — murdered and dismembered Khashoggi, whose body has not been found.

Prince Mohammed said Wednesday that the killing of Khashoggi is a "heinous crime that cannot be justified."

He made the comment at the Future Investment Initiative, an annual summit of global investors in Riyadh. Many international business leaders have pulled out of this year's summit over the killing of Khashoggi.

with files from The Associated Press

I abhor this murder too bit what about the war in Yemen where thousands were killed where cholera is rampant and kids are starving. The Saudis are complicit in this too. This should also be taken in account when we decide to cancel the contract.

If $4 billion and - climbing - gets spent on the TMX pipeline, what's a mere $1 billion?!!

Amen!

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