As mega-project chaos rained down on elected officials once more, we understand that SNC-Lavalin is the gift that keeps on giving. This time, it is Justin Trudeau’s Liberal government in the pokey.
Two very talented Cabinet ministers have resigned. And the prime minister is down one trusted principal secretary.
SNC-Lavalin just keeps on making offers that no one, seemingly, can refuse.
One of the largest construction companies in the world, SNC-Lavalin, based in Montreal, has done work in more than 160 countries. It’s built dams in Malaysia, built part of the Trans-Canada Highway and is one of a handful of companies in the world that can handle large public sector infrastructure projects. It employees 50,000 people in more than 50 countries, 9,500 of whom are in Quebec.
The fly in the ointment for SNC-Lavalin is that they are currently facing charges of fraud and corruption in connection with nearly $48 million in payments (read alleged bribes) made to Libyan government officials between 2001 and 2011.
The company is now hoping (pleading, begging) to strike a deal with federal prosecutors in order to avoid a trial. As CBC news reported, “If guilty, it would be cut off from lucrative Canadian government contracts for a decade.”
All provinces have their corporate players—seemingly always on the make for a tax reduction, recognition for a good deed or a regulation lifted. Quebec has SNC-Lavalin (and Bombardier). Alberta has the oil industry. Ontario has what’s left of the auto industry. New Brunswick has the Irvings.
Like large companies the world over, SNC-Lavalin would prefer the rules didn’t apply to them. They are like feckless adult children who, after wrecking their Porsche Cayennes, beg and plead with their long-suffering parents for a new one because they need a car to get to work … and how are the children going to eat if daddy can’t get to work … etc.
Their motive is profit, not good governance or consideration of the common good. Jobs for local workers are a bargaining chip. And they let others do the fighting for them, a custom that has, historically, played out to the detriment of provincial and federal politicians, who are left alone and sputtering on the dance floor, trying to explain their date’s bad behaviour.
But this time, the stakes for SNC-Lavalin were high. And they were working it hard, lobbying Liberal MPs and provincial politicians who, in turn, were laying it on thick with any Cabinet minister who would meet with them.
“For us, to see a settlement would have been the preferred option,” Quebec’s economy minister, Pierre Fitzgibbon, told the CBC on Tuesday. “SNC-Lavalin is a company we would like to keep healthy.”
In October 2018, the company issued a letter to Canadians pleading that, “Since [2012], we have worked tirelessly to achieve excellence in governance and integrity in an effort to regain the confidence of all our stakeholders and employees.
“We don’t want to be treated differently; we don’t want the past to be forgotten; we do want to move forward. We want to be given the chance to do so through a remediation agreement. The Government of Canada passed legislation in 2018 to allow companies to settle charges via a remediation agreement, and yet the new law is not being made available to SNC-Lavalin for unknown reasons.” 😢
Politics might be the art of compromise, but with SNC-Lavalin the compromises are huge, and not everyone can stomach it.
The Libya scandal is one of many for the company:
- They were smack in the middle of a 2012 bribery scandal in which they allegedly paid a $22.5 million kick back to Dr. Arthur Porter, then-CEO of the McGill University Health Centre, in order to get the contract to build the new $1.3 billion hospital. Former SNC-Lavalin CEO Pierre Duhaime pled guilty on February 1, 2019 in connection with the case and will serve 20 months of house arrest. Dr. Porter passed away of cancer in jail in Panama in 2015.
- In 2015, Brad Wall’s Conservative government in Saskatchewan was hammered in the legislature by the NDP over SNC-Lavalin’s flawed design for a carbon capture facility built for SaskPower that cost almost $600 million. Bill Boyd, the minister responsible for SaskPower was forced to resign in 2017 after he was charged with four environmental violations. Premier Brad Wall retired in 2017.
- Torontonians who have travelled on Eglinton Avenue in the past few years might be interested to know that the Eglinton LRT is a partially being built by SNC-Lavalin. And according to a December 2018 report in On-site, Canada’s Construction Magazine, Metrolinx, an agency of the government of Ontario, had to pay $237 million to keep the project on schedule. Ontario Auditor General Bonnie Lysyk said Metrolinx was forced to do this because the contract did not adequately transfer project risks to the private group of builders made up of ACS-Dragados, Aecon, EllisDon and SNC-Lavalin. Ooops.
Attorney General Jody Wilson-Raybould and Treasury Board minister Jane Philpott may not have gotten the memo about what it means to work in a one industry town where these mega-companies have an iron grip over politicians whose job it is to deliver jobs. Whatever the case, they decided not to play along. And who can blame them? They probably didn’t feel they were elected to go by the rules of 1950s. It’s 2019 after all.
But to frame this narrative as something unique to the Trudeau government lets the real culprit off the hook. Politicians all over the country have their #ustoo moment when it comes to SNC-Lavalin and other companies like them. And the SNC-Lavalins of the world are only too happy to have politicians do their heavy lifting.
But SNC-Lavalin may have overplayed their hand this time. The political conditions for them to get an exemption to the bribery charges may just have just gotten too hot to handle.
Jody Wilson-Raybould and Jane Philpott may have created a day of reckoning for SNC-Lavalin. A good day at the office for any working girl.
Gail Picco is an award-winning charity strategist widely recognized as one of Canada’s foremost experts on how to carve a path through the increasingly complex dynamics of the charitable sector. Civil Sector Press published her latest book, Cap in Hand: How Charities are Failing the People of Canada and the World, in 2017. http://www.gailpicco.com
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