He says cancelling the contract could punish Ontario plant workers.
The issue arose as a young man, arrested at age 17 for protesting the Saudi regime, faces imminent beheading and crucifixion in a country known for crackdowns on opponents and the repressive treatment of women.
"Notwithstanding its human rights violations which are significant, this is a contract with a country that is an ally against the Islamic state, a contract that any one of our allies would have signed," the Conservative leader said at an event in Riviere-du-Loup, Que.
"We expressed our outrage, our disagreement from time to time with the government of Saudi Arabia for their treatment of human rights, but I don't think it makes any sense to pull a contract in a way that would only punish Canadian workers."
The Conservative government last year brokered a $14.8 billion contract to sell light armoured vehicles to the Saudis. The deal is forecast to create 3,000 jobs across southern Ontario including with manufacturer General Dynamics Land Systems.
Human rights groups have warned that the Saudi regime might use the vehicles against its own people.
Questions about the deal came up at the French-language leaders' debate Thursday evening because of the jailing and lashing of Saudi blogger Raif Badawi, whose wife life lives in Sherbrooke, Que.
Both Bloc Quebecois Leader Gilles Duceppe and NDP Leader Tom Mulcair raised Badawi's case and pressed Harper to explain his position on the export contract. A Saudi court this summer upheld Badawi's sentence of 1,000 lashes and 10 years in prison. He has already been flogged once in a public square.
The details of the vehicle deal have been kept confidential at the request of the Saudi government and Ottawa has said little about the human rights review that occurred as part of export control assessments.
Harper offered no further details when asked specifically about assessments on Friday.
Alex Neve, secretary general of Amnesty International Canada, said the organization has tried repeatedly to find out what kind of human rights assessment was carried out.
"The backdrop is that there are pervasive, widespread, serious and longstanding human rights concerns in Saudi Arabia," said Neve. "Their record with respect to every human right is abysmal.
"Oppression is deep, opposition is impossible, women are subject to deeply entrenched inequality."
But the vehicle deal has been praised by the government and business voices as a boon for Ontario manufacturers, not just the main firm involved.
"This is an Olympic win for Canada and for Canadian manufacturers," Jayson Myers, president of Canadian Manufacturers & Exporters, said at the time the deal was signed.
"It shows how great people in truly innovative companies ... can compete internationally and bring home the gold."
The situation is a delicate one for the Conservatives, who have traditionally portrayed themselves as unabashed defenders of human rights — Harper once declared he would not sell out Canadian values "to the almighty dollar," in reference to China.
He often repeats in his nightly stump speech that his government doesn't base its foreign policy on "polls or popularity," nor does it court popularity with dictators to win votes at the United Nations.
And people close to Harper, including a current member of his campaign war room, previously attacked the Saudi Arabian government's human rights record while promoting "ethical" oil from the Canadian oilsands.
Jennifer Ditchburn, The Canadian Press
Also on HuffPost