Whether or not you watch the news, if you are Canadian you have probably heard of the recent SNC-Lavalin scandal surrounding the Trudeau government. I say specifically Trudeau because this entire scandal centers around him rather than the party as a whole. However, if you have been closely following this from the start, you may have noticed that the majority of the news coverage on this topic being presented is biased. You have some sources that are completely against Trudeau and the Liberals – these are also the same sources that published political articles on why you should vote for Stephen Harper in 2015 – or some that are saying Trudeau did nothing wrong except how he is responding to the crisis. After some discussions with friends about the scandal, I decided to try and wade through all the information out there about this scandal and just simply present the overall facts in an unbiased manner.

SNC-Lavalin Charges

To even begin to understand this entire situation, we need to understand how it all began. In 2015, the RCMP brought fraud and corruption charges against SNC-Lavalin for acts committed by the company in Libya. It is important to note that these charges being brought in front of the courts have nothing to do with the company’s conduct in Canada and technically speaking the charges are not for breaking any laws within Canada. However, Canadian law has the ability to hold Canadian companies liable for certain laws even if they are broken in a different country. SNC-Lavalin allegedly used bribery to get government projects in Libya between 2001 and 2011.

“There is one count of corruption related to at least $47.7-million in alleged bribes to Libyan public or other officials. A second count is for fraud of about $130-million related to construction projects in Libya, including the Great Man Made River Project.” – The Globe and Mail

This is actually a very heated debate topic in the business world. Should Canadian companies be bound by Canadian laws, especially on laws about corruption in countries like Libya? For context, Libya currently ranks 170th of 175 countries on the Global Corruption Perceptions Index whereas Canada ranks 9th. So basically Libya is perceived to be the 170th worst country in the world for corruption. The old saying “when in Rome do as the Romans” comes to mind here. Now imagine attempting to conduct business in a country like this where every company except your company is bribing government officials in an effort to land the project. The chances your company secures the project are basically 0 because government officials care more about their own pockets than anything else. SNC-Lavalin attempted to level the playing field by playing by the same rules as the local companies in an attempt to secure these projects. So when operating in Libya should Canadian companies stick with Canadian norms and ethics or follow the local norms and ethics.

Illegal and Legal Contributions

There were separate charges regarding illegal federal political contributions. Between 2004 and 2011, SNC-Lavalin executives encouraged employees and their spouses to make political contributions to the Liberal or Conservative parties and then were reimbursed by the company. In total the party illegally donated nearly $118,000 (approximately 7% went to the Conservatives and 93% to the Liberals). The federal elections commission reached a deal with the company in which the company was not charged as all the executives responsible were no longer a part of the company and the company was fully co-operating. In January, Normand Morin, the only executive charged by the election watchdog pleaded guilty to 2 of 5 charges while the remaining 3 charges were dropped, bringing a close to this saga. These charges themselves are not relevant to the situation at hand and both these cases have no connection whatsoever beyond the fact that SNC-Lavalin has a very murky past. Many media outlets continue to draw a connection between the fact that the Liberals are trying to help the company because of the illegal contributions they have received, even though all 3 major political parties in Canada had very different leaders at the time. The parties have also repaid all the contributions made illegally stating they had no knowledge of the illegal activities. As the case did not go to trial we will never know who precisely received the money or any further details.

During that same time period, SNC-Lavalin and its subsidiaries donated over $200,000 legally. Approximately 55% of this money went to the Liberals while 25% of this money went to the Conservatives. Since then, the company seems to have switched its strategy. Between 2011 and 2015 the company donated nearly $150,000 with 56% going to the Conservatives and 34% to the Liberals. The small remainder of the money going to various provincial parties or candidates directly. Both parties have received vast amounts of funds from SNC and the amounts would be even higher if you count the personal donations made by the Lamarre family (the family that ran SNC for many years).

Economic Impact on Canada

SNC-Lavalin was founded in 1911 in Montreal. Since that day, the company has grown significantly and now employs over 50,000 employees globally. With C$9.3 billion in revenue in 2017, the company is one of the largest engineering firms in the world and apart of the largest 100 companies in Canada. Through numerous acquisitions and mergers, the company has expanded quickly globally but this has also led to the fact that Canada no longer has the most employees for the company. Following 2 acquisitions in the UK in 2014 and 2017, the company now employs over 10,000 employees in the UK, a little more than here in Canada.  While at one time SNC-Lavalin employed over 20,000 people in Canada, today the company only employs 8,500 people in our country, still representing 16% of the company’s global employees. Most of these 8,500 jobs are high paying jobs so the impact on our economy would definitely be felt.

“SNC-Lavalin is one of only a dozen large-scale infrastructure companies worldwide and the only one in Canada capable of taking a project from start to finish, according to analysts.” – The Globe and Mail

If found guilty and charged with these crimes, SNC-Lavalin would no longer be able to bid for any government contracts whether they be federal or municipal in Canada. Thus, the company has threatened to leave the country altogether and move its head office to London. A loss of 8,500 high paying jobs would have an impact on our economy but it goes beyond just that. SNC-Lavalin is responsible for many major projects that we all know very well. Vancouver’s SkyTrain system, including the design, construction and current operation of the Canada Line was and is SNC-Lavalin. The massive Manic-5 hydroelectric dam in Quebec, once again SNC-Lavalin. The company is also responsible for Darlington Ontario nuclear-generating station and is a part owner (16.76%) of Highway 407. In Alberta, SNC-Lavalin is responsible for the Husky Lloydminster Refinery. These are just a few examples of the projects that SNC-Lavalin has either been a large part of or has been slowly responsible for.

“The company is working on seven of the 10 biggest construction projects underway in Canada, according to data from infrastructure trade publication ReNew Canada. Total value of the projects: $66.8-billion.” – The Globe and Mail

The company would also have difficulty bidding for contracts in other countries if it had a criminal record in Canada so even if the head office was not moved to London, many jobs could be lost and the company could go bankrupt. Many say that SNC-Lavalin has already been slowly moving these high-skilled and executive decision making jobs so fighting for these jobs is futile, especially since many of these jobs could be picked up by competitors. However, SNC-Lavalin is a huge part of our economy beyond just jobs in Quebec. A loss of the company in any way would have a strong hit on our economy considering how integrated the company has become in many of our everyday lives without us even realizing it.

Subscribe now to be sure you’re notified when I publish the second part that focuses on the current scandal rather than the background information or be sure to check back next Wednesday! You can read part 2 here now. Don’t forget to share your opinions below in the comments!

Disclaimer: I am not a lawyer so nothing in this article constitutes legal advice. 

Sources: CPAC; CTV News; Global News; Financial Post; Financial Post; National Post; National Post; The Tyee; CBC News; CBC News; CBC News; The Globe and Mail; The Globe and Mail; The Globe and Mail; The Globe and Mail; The Globe and Mail; The Globe and Mail; The Globe and Mail; The Globe and Mail; The Globe and Mail; The Global and Mail; City News; The Star; Trading Economics; Yahoo Finance;