SNC-Lavalin signed at least $68M in federal contracts last year
|Toronto Star 11 Feb 2019 at 14:28|
The figure provides a glimpse into what is at stake for the Quebec-based company if it is convicted of fraud and corruption charges that lie at the heart of a political storm swamping the Trudeau government.
The tally excludes the value of multi-year contracts and major infrastructure projects, and likely represents a fraction of what the construction and engineering giant stands to lose in the high-profile case. It also excludes work SNC-Lavalin is involved in as part of a consortium of companies, such as Ottawa’s new $2.1-billion light rail line and the $2.8-billion contract to upgrade Montreal’s regional transit system.
The charges against the company are at the centre of a political controversy for the Liberal government. Last week, the Globe and Mail reported officials in the Prime Minister’s Office pressured former attorney general Jody Wilson-Raybould to halt criminal proceedings against SNC-Lavalin and settle the case through mediation. Federal ethics commissioner Mario Dion said Monday that he will investigate the affair.
The company, meanwhile, has argued a criminal conviction would unjustly punish its thousands of employees, pensioners, shareholders and subcontractors because it would bar SNC-Lavalin from bidding on Canadian federal contracts for 10 years.
It has pleaded not guilty to charges relating to its operations in Libya, and applied in Federal Court to overrule the Oct. 9 decision of Canada’s top public prosecutor to pursue a criminal trial in the matter.
Charlie Angus, an NDP MP from northern Ontario, asked the federal government to release the total value of more than 140 active contracts with SNC-Lavalin, as well as details of departments’ contingency plans if the company is suddenly ineligible to perform federal work. In a response last month, most government departments refused to provide those details. Angus was directed to the federal government’s procurement website for the value of contracts, and was only told the government is monitoring SNC-Lavalin’s legal situation very closely.
According to 2018 procurement records, SNC-Lavalin inked 176 new contracts with federal departments and agencies that are worth a total of more than $67.9 million. Because of the way procurement records are published, it’s difficult to calculate how much federal money was awarded to the company.
SNC-Lavalin employs more than 8,700 people in Canada, according to its website , and has 86 offices across the country.
In an interview Sunday, Angus said he doesn’t buy the argument that SNC-Lavalin is vital to the Canadian economy—that it is, in essence, “too big to fail.”
“The reality is SNC is continuing bidding on federal contracts,” he said. “This is work that can be done either by public service workers or can be done by companies without a long history of corruption.”
SNC-Lavalin has not responded to requests for comment from the Star in recent days.
Will Mitchell, the Anthony S. Fell chair in new technologies and commercialization at the University of Toronto’s Rotman School of Business, said there is no doubt SNC-Lavalin is a significant presence in the Canadian corporate landscape. From September 2017 to September 2018, the company reaped more than $8 billion in global revenue. It has also been involved in signature Canadian infrastructure projects in recent years, such as construction of Vancouver’s Canada Line train and the multibillion-dollar refurbishments of the Darlington and Bruce Power nuclear plants.
Mitchell said projects like this can have a “multiplier” effect for job growth, with SNC-Lavalin as a Canadian company being more likely to hire subcontractors for work in this country. But at the same time, he said, lingering criminal allegations can cast a cloud over Canada’s international reputation, which has the potential to drag down other corporate activity by Canadian firms around the world.
“There are lots of jobs and economic activity at stake, but nobody’s too big to fail, and if they’re damaging the reputation of the country—and in turn, damaging the ability of other Canadian firms to operate—they’re definitely not too big to fail,” he said.
Neil Bruce, SNC-Lavalin’s president and chief executive, has argued the criminal proceedings should be dropped in favour of mediation because of harm to the company’s operations. Last year, he told Bloomberg that the company has already lost out on about $5 billion in contracts because of the charges.