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SNC-Lavalin Scandal Introduction “Sunny ways my friends, sunny ways” Prime Minister Trudeau proclaimed to a roaring crowd celebrating the Liberal Party’s majority on October 19th, 2015. The saying according to the Liberal Party is a token to past Prime Minister Wilfred Laurier and symbolizes “that politics can be a positive and powerful force for change.” Prime Minister Trudeau in many speeches has emphasized how his government would bring “real change” against the supposed politics of cynicism from the past administration.Polling from the 2015 election shows that the main concerns voters had were the rising cost of living and the “shaky economy”. Those were both issues where Canadians were satisfied and trusted the Harper government with. The dilemma was that even though most Canadians were extremely satisfied with the Conservatives’ handling of the economy and cost of living, people still wanted “real change” in government. Justin Trudeau seized on Canadians yearning for a change in politics and based his campaign around providing an alternative to cynical, un-transparent politics by introducing “transparency and accountability, and modernizing the way government works.”This notion of positive politics has been tainted by multiple scandals and, most recently, the devastating SNC-Lavalin scandal. This report analyzes the events of the scandal, the people involved, political reactions and implications for the upcoming 2019 election.

Contributors

Hamza Ali

Daniel Jolic

Eliano Rexho

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Background and History SNC-Lavalin is an engineering and construction company based in Montreal, Quebec and is considered an international industry leader. They have been rewarded with numerous high-end contracts in areas such as mining, transportation, and infrastructure, from countries all around the world. They were the winners of numerous prominent bids on projects such as expanding the Heathrow Express, constructing Malaysia’s transit line and building Qatar’s tram system ahead of the World Cup. Presently, the firm employs approximately 50,000 employees in over 50 countries, with 8500 employees in Canada.In June 2018, Bill C-74, a budget implementation bill, came into law. Within the bill, the Trudeau government added provisions which would amend parts of the criminal code. One of these amendments included a “Remediation Agreement” clause where companies can quickly agree to pay a fine to avoid criminal conviction. According to the Canadian Justice Department, the aim of the clause is to quickly “compensate victims and protect jobs of innocent employees and investments of innocent shareholders”. This is where SNC-Lavalin criminal activity comes into play. In 2015 the RCMP charged the company, including its international division, with corruption and fraud with their business dealings in Libya from 2001 to 2011. This includes the payment of 47.4 Million Canadian dollars in bribes to the Gaddafi regime in order to secure contracts in Libya. While they were rewarded those contracts, they also defrauded public Libyan agencies of 130 Million Canadian dollars. “Corruption of foreign officials undermines good governance and sustainable economic development,” RCMP Assistant Commissioner

Gilles Michaud said Thursday. “The charges laid today demonstrate how the RCMP continues to support Canada’s international commitments and safeguard its integrity and reputation,” RCMP Assistant Commissionner Gilles Michaud said after charges were laid against SNC-Lavalin.Ties between the Gaddafi regime and SNC-Lavalin were mainly connected by Muammar Gaddafi’s son, Saadi Gaddafi, and his close ties to the company. During the investigation, documents revealed SNC-Lavalin funding a 1.95 Million dollar trip made by Saadi Gaddafi in 2008, which included payments made to high class escorts and premier tickers to a Spice Girls concert. With the new “Remediation Agreement” clause coming into law, SNC-Lavalin attempted to leverage these new rules passed in the summer to avoid court proceedings. This request was profoundly ignored by federal prosecutors who refused to exempt SNC-Lavalin’s actions with a mere fine. An investigative article came out by the Globe and Mail that claimed the Prime Minister’s Office pressured Attorney General and Justice Minister Jody Wilson-Raybould to allow SNC-Lavalin to negotiate a remediation agreement. It is alleged that due to her lack of cooperation with the Prime Minister’s Office, she was demoted to Veterans Affairs Minister in a recent Trudeau cabinet reshuffle, which is often seen as a “punishment” portfolio because of its reputation for killing political careers. After an agreement by Prime Minister Trudeau to partially wave his Client Attorney privilege, which would subsequently prevent Wilson-Raybould from speaking on the matter, she told her side of the story. Wilson-Raybould claims she “came under consistent and sustained pressure — including veiled threats — from the Prime

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Minister’s Office, the Privy Council Office and the finance minister’s office to halt the criminal prosecution of SNC-Lavalin”. Prime Minister Trudeau vigorously denies wrongdoing and claims he did not direct Wilson-Raybould to proceed one way or another when she brought up the case in September. “Neither the current nor the previous attorney general was ever directed by me or anyone in my office to take a decision in this matter”, the Prime Minister claims. Currently we stand in a political free-for-all where it is a large dispute. In the meantime the people of Canada and the political system are reacting to the situation.

Key Political Actors

Hon. Jody Wilson-Raybould

Hon. Jody Wilson-Raybould is an MP from the Vancouver-Granville riding. She served as Justice

Minister before a reshuffle by Trudeau’s cabinet demoted her to Veterans Affair Minister. She claims that over from September to December 2018 she faced a sustained effort to politically interfere with the exercise of prosecutorial discretion during her role as Attorney Generals Canada. She specifically claims that the Prime Minister’s Office (PMO) and Finance Minister’s Office sent her thinly veiled threats to seek a “Remediation Agreement” with SNC-Lavalin. As

of February 12 Jody Wilson-Raybould resigned from the cabinet but will stay on as an MP.

Rt. Hon. Justin Trudeau

Rt. Hon. Justin Trudeau and the PMO adamantly deny that they pressured then Attorney General Jody Wilson-Raybould. His office is currently being

investigated by the Ethics Commissioner and the justice committee. The Prime Minister has shown no willingness to resign and has indicated no wrong doing. In his most recent political rally on March 4th, Trudeau stated that he was "listening carefully to the various voices, testimonies and opinions" of witnesses at the House of Commons justice committee.

Gerald Butts

Former President and CEO of the World Wild Life Fund, Gerald Butts is a political

consultant who had the role Principal Secretary to the Prime Minister. Trudeau’s widely considered right hand man resigned on February 18th denying all allegations but claiming he was becoming a distraction within the Prime

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Minister’s Office. According to the Prime Minister’s Office, when Wilson-Raybould first raised the case of remediation and SNC-Lavalin, Gerald Butts advised Wilson-Raybould to take up the case with the Privy Council Clerk as per standard procedure.

Hon. Andrew Scheer

Hon. Andrew Scheer is the current Leader of the Opposition and Leader of the Conservative

Party of Canada. On Wednesday February 27th, Hon. Scheer called on the Prime Minister to resign over the SNC-Lavalin scandal. According to him, the scandal indicates a clear abuse of power and obstruction of justice. In a speech he gave that say he says “Jody Wilson-Raybould tells the story of a Prime Minister who has lost the moral authority to govern. A prime minister who allows his partisan, political motivations to overrule his duty to uphold the rule of law”. He looks to be the front runner in 2019 election due to the implications of this scandal, with the CPC currently projected to win 153 seats vs. the Liberals’ 147 seats.

Jagmeet Singh

Jagmeet Singh is the leader of the third largest party in Canada, the New Democratic Party. Mr. Singh recently became an MP-

elect by winning the competitive Burnaby South

byelection in British Colombia, after not having a seat due to his jump from Ontario-provincial to federal politics. Singh’s position on the scandal is calling for a public inquiry with full transparency and for a chance for Wilson-Raybould to speak freely. On February 20th, the Liberals used their majority to vote against the opening of a public inquiry citing the ongoing investigation by Canada’s Ethics Commissioner.

Hon. Jane Philpott

Hon. Jane Philpott is the MP from Markham—Stouffville and served as President of the Treasury Board in Trudeau’s cabinet. On March 4th, she resigned from her position in the cabinet sighting her “core values, my

ethical responsibilities, constitutional obligations” as the reasons she stepped down. This would be the second cabinet resignation of the Trudeau government dealing a legitimate blow to the Prime Minister’s credibility. Just like Gerald Butts, she was trusted friend and ally of the Prime Minister. This indicates that her resignation is a loss of confidence in Trudeau’s ability to lead the country through the chaos.

Canadian Electorate

Current polling of the scandal has shown to be extremely difficult news for Trudeau and the Liberal Party. According to Nanos polling, about half of Canadians think the Prime Minister should resign. Additionally, twice as many Canadians believe Wilson-Raybould as they do

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the Prime Minister, and 75% agree there was inappropriate political interference. These are numbers that are likely to halt the Liberals’ assumed mandate from the majority government they earned in 2015, and will likely be decisive in the 2019 federal election.

Possible Implication for 2019 Election Since the onset of the scandal, the Liberal Party has taken a major hit in polling. There has been a clear drop in support for the Liberal Party, with most of that support bleeding over to the Conservative Party. As of now, the Conservatives are projected to win 152.9 seats, the Liberals 147.3, the NDP 19.1, the Bloc Québecois 13.5, the Green Party 4.3, and the People’s Party 0.8. This stands in stark contrast from just two months ago, in which the Liberals were expected to win 201.7 seats vs. the Conservatives 111.7 seats. This decline in public support for the Liberals can be directly attributed to the SNC-Lavalin scandal. 64% of Canadians say that they are following the issue, with 66% of Canadians saying that this is a serious issue for them. 55% say that it will influence their voting intentions this year. It is also interesting to see that people are, in fact, believing Wilson-Raybould’s story. 67% believe her account, versus only 33% who believe Trudeau. Even within the Liberal fold, 25% would like Trudeau to resign, and 73% believe that the RCMP should probe the issue.Right now, the popular vote projects the Conservatives taking 40% of seats in the House of Commons, the Liberals taking 31%, and the NDP taking 20%. This scandal has most affected the Liberals in the seat rich, swing districts in the

905-belt, where the Tories now enjoy a commanding lead of over 20%. If this lead continues, they will most likely sweep the 905, and win the election. Additionally, polling shows that the Tories have the opportunity to perform well in Atlantic Canada, specifically in New Brunswick and some Nova Scotia and Prince Edward Island ridings. They are also poised to steal NDP and Liberal seats in the Prairies, and swing Liberal seats in Lower Mainland British Columbia. Interestingly, the fallout of the Liberals and the lagging New Democrats are benefiting the Green Party, where they are poised to win the majority of Vancouver Island seats. Overall, much can change between now and October, but if this trend continues, along with the general trend towards right-leaning parties winning provincial elections within the past few years throughout Canada, the Conservatives will have a strong chance of forming government.

Conclusion To conclude, this next year will be a very interesting time in Canadian politics. No longer are we seeing “Sunny Ways” or “Real Change.” Ultimately, we are seeing arguable change for the worse. While the previous administration was involved in scandals like expensing glasses of orange juice, or the Duffy scandal, which was rectified by the Prime Miniter’s Chief of Staff reimbursing the taxpayers out of his own pockets, Justin Trudeau seems aloof to the consequences of his actions.In speculating why Trudeau focused so hard in defending SNC-Lavalin, it all comes down to basic principles of politics and ensuring that he keeps his majority. Known pollster Nick Kouvalis has stated that Trudeau was bound to lose 30-40 seats throughout Canada, and to maintain his majority, would have to pick up about 30 seats in Québec to

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compensate, which he could do because of collapsing NDP support in the province. It can be speculated that by giving SNC-Lavalin immunity, and helping to save jobs in the province, he would have an easier time winning the seats that he needed to maintain his majority. Because of the fallout from this scandal, however, he likely will not be able to use this strategy, as some of his Québec support is collapsing and shifting to the Conservatives and the Bloc Québecois, and outside of Québec, based on polling numbers, will at minimum lost 40-50 seats.As Prime Minister Trudeau once said, “It’s hard not to feel disappointed in your government when every day there is a new scandal.” Moving forward, this year will test how Canadians feel when sunny ways become cloudy.

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Berthiaume, L. (2019, February 28). Andrew Scheer says Justin Trudeau should resign over SNC-Lavalin controversy. Retrieved from https://globalnews.ca/news/5007650/andrew-scheer-justin-trudeau-snc-lavalin-resign/

Coyne, A. (2019, February 14). Andrew Coyne: The frightened Liberal rabbits shut down investigation into SNC-Lavalin affair. Retrieved from https://nationalpost.com/opinion/andrew-coyne-the-frightened-liberal-rabbits-shut-down-investigation-into-snc-lavalin-affair

Geographies. (n.d.). Retrieved from http://www.snclavalin.com/en/geographies/

Haq, L. (2019, March 05). Trudeau 'Listening Carefully' To Concerns Around SNC-Lavalin Scandal. Retrieved from https://www.huffingtonpost.ca/2019/03/04/at-climate-rally-in-toronto-trudeau-says-hes-listening-carefully-to-concerns-around-snc-lavalin_a_23684292/

Harris, K. (2019, March 05). Jane Philpott resigns from cabinet, citing loss of 'confidence' over government's handling of SNC-Lavalin | CBC News. Retrieved from https://www.cbc.ca/news/politics/philpott-resignation-trudeau-snc-lavalin-1.5042411

Here's what you need to know about SNC-Lavalin, the company at the heart of the PMO scandal. (2019, March 01). Retrieved from https://ca.finance.yahoo.com/news/heres-need-know-snc-lavalin-company-heart-pmo-scandal-185827588.html

Joseph, R. (2019, February 18). Charges against SNC-Lavalin explained - and how the PMO allegedly got involved. Retrieved from https://globalnews.ca/news/4953015/snc-lavalin-explained/

Kalvapalle, R. (2019, March 05). Most Canadians side with Wilson-Raybould, believe Trudeau has lost moral authority to govern: Ipsos poll. Retrieved from https://globalnews.ca/news/5021267/trudeau-approval-rating-snc-lavalin-wilson-raybould/?fbclid=IwAR2yjZwud67w_ehT4qz3JZ4tBtZ9A2ptl-2eWpw780pS2HtermFb3BRlWnA

Kilpatrick, S. (2019, February 07). Trudeau denies report his office pressured attorney general to help SNC-Lavalin. Retrieved from https://ottawacitizen.com/news/canada/globe-pmo-pressured-justice-minister-to-help-snc-lavalin-avoid-prosecution/wcm/8a22f0b7-c634-4f0e-8a7a-9e3a72ee2bbf

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PMO pressed Wilson-Raybould to abandon prosecution of SNC-Lavalin; Trudeau denies his office 'directed' her. (2019, February 08). Retrieved from https://www.theglobeandmail.com/politics/

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article-pmo-pressed-justice-minister-to-abandon-prosecution-of-snc-lavalin/

Poll Analysis and Electoral Projections. (n.d.). Retrieved from http://338canada.com/

Poll says half of Canadians say Trudeau should resign over the SNC-Lavalin affair. (2019, March 4). Retrieved from https://globalnews.ca/video/5021578/poll-says-half-of-canadians-say-trudeau-should-resign-over-the-snc-lavalin-affair

Projects. (n.d.). Retrieved from http://www.snclavalin.com/en/projects/

RCMP charges SNC-Lavalin with fraud and corruption linked to Libyan projects. (2015, February 19). Retrieved from https://business.financialpost.com/news/rcmp-charges-snc-lavalin-with-fraud-and-corruption-linked-to-libyan-projects

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Reynolds, C. (2018, November 01). SNC-Lavalin CEO aims to ease worries over ongoing court case, diplomatic woes. Retrieved from https://business.financialpost.com/pmn/business-pmn/snc-lavalin-group-reports-120-7m-q3-profit-up-from-103-6m-a-year-ago

Tasker, J. P. (2019, February 18). Gerald Butts resigns as Prime Minister Justin Trudeau's

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Trudeau, J. (2013, October 17). "It's hard not to feel disappointed in your government when every day there is a new scandal." Retrieved from https://twitter.com/JustinTrudeau/status/390904041808867328

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