Canadian Prime Minister Justin Trudeau’s Liberal Government has been rocked to the core over the last week by the SNC-Lavalin affair.
On Monday, Jane Philpott, Treasury Board President resigned from Cabinet, citing the scandal as a major reason for her decision. “I have lost confidence in how the government has dealt with this matter and how it has responded to the issues raised,” Philpott wrote in her resignation letter to Trudeau.
SNC-Lavalin, one of Canada’s largest engineering and construction firms, is based in Montreal, Quebec. Once considered one of the top engineering companies in the world, it has offices in 50 countries and has 50,000 employees working on projects in 160 countries. In 2013, SNC-Lavalin and its 100 subsidiaries were banned by the World Bank from bidding on contracts offered by the development agency which cited company misconduct in Bangladesh and Cambodia. Questions have also been raised about its conduct here and in Trinidad and Tobago.
In February 2015, the Royal Canadian Mounted Police (RCMP) laid charges against SNC-Lavalin over allegations that it used bribery to get government business in Libya during the Gaddafi era. A conviction could lead to the firm being barred from bidding on Canadian government contracts and to its probable devastation.
In March 2018, the Liberal Government, which came to power in October 2015, tabled a budget bill that included a change to the Criminal Code which allowed for “remediation agreements,” plea-bargain-like deals between prosecutors and accused corporations. SNC-Lavalin had lobbied for such a provision in Canadian law which would allow corporations to avoid criminal proceedings by making reparations for previous bad behaviour.
Although the bill was not yet passed, SNC-Lavalin contacted the Public Prosecution Service lawyers to ensure that they had all the relevant information for a possible invitation to negotiate a remediation agreement. During April to June of last year, in response to requests from prosecutors, SNC-Lavalin provided detailed information hoping to make a strong case for an agreement. In early September, the prosecution service informed SNC-Lavalin that it would not invite the firm to negotiate a remediation agreement.
On September 18, PM Trudeau met with Justice Minister and Attorney General Jody Wilson-Raybould to discuss the SNC-Lavalin case. As Attorney General she could have directed the Prosecution Service to negotiate a settlement. Trudeau, later says that when the AG asked him if he was going to direct her on what to do, he informed her that the final decision was her own to make.
On September 21, the remediation agreement came into legal effect and on 21 October, the Prosecution Service informed SNC-Lavalin in writing that it would not be negotiating an agreement. SNC-Lavalin currently has an ongoing to challenge to it in Federal Court.
In mid-January, Trudeau shuffled his cabinet, following the resignation of Treasury Board President Scott Brison and Wilson-Raybould was shifted from Justice to Veterans Affairs, a move which was widely viewed as a demotion. David Lametti, a Montreal MP and former law professor, was appointed as Justice Minister.
The Globe and Mail newspaper, on 7 February, citing unnamed sources reported that Trudeau’s aides had attempted to press Wilson-Raybould, whilst she was attorney general, to intervene in the prosecution of SNC-Lavalin, and that exasperation with her lack of co-operation was one reason why she was removed from the justice portfolio. Trudeau immediately denied any impropriety and Wilson-Raybould stated that solicitor-client privilege prevented her from speaking about dealings she had on the case whilst attorney general.
Five days later, Wilson-Raybould resigned as Veterans Affairs Minister, one day after the Ethics Commissioner announced that he was beginning an investigation.
Fast forward to last week Wednesday, when Wilson-Raybould, who had previously retained the services of the former Supreme Court Justice Thomas Cromwell to advise her on the limits of solicitor-client privilege delivered bombshell testimony before the House of Commons Justice Committee on Parliament Hill. (Trudeau had partly waived both solicitor-client privilege and cabinet confidentiality for his former attorney general, paving the way for Wilson-Raybould to tell her side of the SNC-Lavalin saga to the justice committee and the Ethics Commissioner. However, the order specifically noted that she could not speak publicly about her communication with Kathleen Roussel, the Director of Public Prosecutions).
Wilson-Raybould alleged that she had come under “consistent and sustained” pressure, including veiled threats, from the Prime Minister’s Office, the Privy Council Office and the Finance Minister’s Office to halt the criminal prosecution of SNC-Lavalin. These allegations come as a huge blow to the Liberal Party, which, only a week earlier had used its House of Commons majority to defeat an opposition motion for a public inquiry on the grounds that the Prime Minister’s Office had pressured Wilson-Raybould.
This testimony could not have come at a worse time for Trudeau, whose office was the scene of at least fourteen meetings with SNC-Lavalin. With elections due this fall, Trudeau, who represents the riding of Gatineau, has all along explained that his concern about the case has been about the potential loss of Canadian jobs, especially in Quebec, where SNC-Lavalin is a major employer. Trudeau should survive this scandal, whether he can win the next election only time can answer that question.
This is a good example for us here to observe the reach and influence of big corporations on governments. As we begin to develop our oil sector and continue to exploit other natural resources we can expect similar attempts by investors to bend our laws. How, we respond as a Nation, is for us to determine.
