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ALAN HOLMAN: Strong company + weak PM = Problem

In the she-says-they-say saga of Jody Wilson Raybould’s exit from cabinet, it is easy to lose track of the role played by SNC-Lavalin of Montreal.

A change to the Criminal Code to provide remediation agreements, or deferred prosecution agreements (DPA), for corporations facing criminal charges came about last year after a serious lobbying campaign by SNC-Lavalin. A DPA would allow a company to pay a penalty, a large fine, without admitting to any guilt and without going to court for a trial.

SNC Lavalin expected to benefit from this change. But, the Department of Justice opted not to grant them a DPA, but instead it decided to take the company to court. If found guilty, in addition to a fine, the company would also lose the right to bid on any federal government contracts for 10 years.

At least, that was the plan the prosecutors presented to Jody Wilson Raybould. As minister of Justice and Attorney General she had to agree, and she did.

Then the prime minister, many of his office staff, including his chief of staff Gerald Butts and the clerk of the Privy Council, leaned very heavily on Ms Wilson Raybould to use the DPA . She didn’t, and she was fired.

In their pleas to Ms Wilson Raybould, all of them, including the prime minister, kept citing the number of jobs that would be lost in Quebec if SNC-Lavalin were convicted. The number 9,000 was frequently used. They also alluded to the possibility of SNC-Lavalin moving out of Quebec and relocating outside of Canada.

The interesting thing about the figure of 9,000 jobs is, no one seems to know just where that number comes from. It’s about the number of people SNC-Lavalin employs in Canada. The company has 50,000 employees in other parts of the world.

In his appearance before the Commons Justice Committee, Gerald Butts admitted he wasn’t sure where the number came from when asked by Green leader, Elizabeth May.

“Based on the 2018 audited financial statements of SNC-Lavalin, they currently have $15 billion in back orders,” she said. “They have a very secure financial situation with gross revenues of $10 billion.”

“Is there any evidence that jobs were actually at stake by letting this go through the courts?” May asked Butts.

“I can’t recall anything specific,” Butts replied.

Two years ago, the Caisse de Depot, which manages Quebec government employee’s pension funds, gave SNC-Lavalin a loan of $1.5 billion, plus it purchased $400 million in equity, to help fund the company’s international operations. Part of that deal was a promise from SNC-Lavalin it would not move its headquarters from Montreal before 2024, if ever.

When Michael Wernick, the clerk of the privy council, appeared before the justice committee, Ms May also asked him about the 9,000 jobs.

“In preparing advice to cabinet, what work did you do to assess the threat to jobs? Did you look at the commitments [SNC-Lavalin] made to the government of Quebec not to move headquarters . . . Did you in fact have an independent assessment of whether there would be any impact on jobs?”

He said, “No, because the file was entirely in the carriage of the minister of justice.”

However, Mr. Wernick, also told the committee he had received a phone call from a former clerk of the privy council, Kevin Lynch, who is now the chairman of SNC- Lavalin’s board of directors.

He said, Mr. Lynch called, frustrated by the government’s refusal to negotiate with SNC-Lavalin for a DPA, wondering, “Isn’t there anything that can be done?”

SNC-Lavalin is a large corporation. It’s used to getting its way. It, and/or its employees, has been charged with a number cases of bribery and taking kick-backs, nonetheless the company thought it could just snap its fingers and the prime minister and the federal government would deliver what they wanted.

But, Jody Wilson Raybould thought otherwise.

If Sonny Ways had the same strength of character, Lawrence MacAulay would still be minister of Agriculture.

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