SNC Lavalin Scandal: It’s about Jobs?

By: Laura Steiner

SNC Lavalin stands accused of fraud and bribery connected with the Gaddafi regime in Libya between 2001-2011.  A conviction carries with it a 10 year ban on applying for federal contracts.

The ban carries with it the spectre of potential job losses.  Something we’ve heard about several times this past week in testimony from  former Principle Secretary Gerald Butts, and Privy Council Clerk Michael Wernick.  Thursday morning Prime Minister Justin Trudeau mentioned it seven times in his first formal statement since the controversy began.  At one point saying:   “I’ve spent my entire political career fighting for justice, and for people. Social justice.  Protecting Canadian jobs,” The exact number of jobs affected is 8,762.  Of those, roughly 700 are at the company’s Montreal headquarters.  An office SNC Lavalin is allegedly threatening to move to London, UK, despite an agreement to keep it in the country until 2025.

The Criminal Code of Canada lays out guidelines for Remediation agreements (Deferred Prosecution Agreements).  The current accusations against SNC Lavalin fall under the “Corruption of Foreign Public Officials Act.”  According to the guidelines  “the prosecutor must not consider the national economic interest, the potential effect on relations with a state other than Canada or the identity of the organization or individual involved.” What is the “national economic interest?” Michael Wernick testified the expression could be used to “relate to the potential job losses at an implicated company.”   That means that prosecutors cannot consider potential job losses when it applies to SNC Lavalin.

In his testimony, Butts indicated the Liberals had no data to back up the claim that jobs were at stake.  The company is working on multiple billion dollar projects outside Quebec which are years away from completion.  The Canada-European Union trade deal includes clauses allowing European companies to bid on Canadian infrastructure projects.  There are some who believe SNC Lavalin could use their European-based subsidiaries to bid on contracts in the case of a ban.  That could reduce the hypothetical job losses even further.  2025 is six years away, and nobody can see the future.

Governments have had a recent history of financially helping corporations.  The Harper government helped GM. The Trudeau government helped Bombardier.  There are any number of programs to help workers through job losses.   If those don’t work, then he can create one. Why is the Prime Minister leaning so heavily on getting this DPA?

The jobs argument is shaky at best.  At worst, it’s potentially illegal.