The SNC-Lavalin affair () is a political scandal involving attempted political interference with the justice system by the Prime Minister of Canada, Justin Trudeau, and the Prime Minister's Office (PMO). The Parliament of Canada's Ethics Commissioner Mario Dion found that Trudeau improperly influenced then Minister of Justice and Attorney General Jody Wilson-Raybould to intervene in an ongoing criminal case against Quebec-based construction company SNC-Lavalin (subsequently rebranded AtkinsRéalis in 2023) by offering a deferred prosecution agreement.
The affair became public when The Globe and Mail published an article uncovering the allegations on 7 February 2019, shortly after Wilson-Raybould had been shuffled to another cabinet position as Minister of Veterans Affairs. On 11 February, Ethics Commissioner Dion announced he would investigate the allegations. Wilson-Raybould resigned from cabinet the next day. This was followed by the resignation of Gerald Butts, the Principal Secretary to Trudeau, on February 18. This was then followed by the resignation of fellow Liberal cabinet minister Jane Philpott on March 5, over the government's handling of the affair. The House of Commons' Justice Committee held three hearings into the affair. Wilson-Raybould, Butts, and Michael Wernick, Clerk of the Privy Council testified before the committee. Wilson-Raybould said there was a breach of prosecutorial independence when members of the government pressured her to offer SNC-Lavalin a DPA instead of continuing with a criminal prosecution. Butts and Wernick testified that they had contacted Wilson-Raybould to find a "political solution" after the decision not to offer SNC-Lavalin a DPA was made. Controversially, Wilson-Raybould revealed that she had secretly recorded a conversation she had with Wernick while she was Attorney General.
Following the hearings, Wernick announced his early retirement from the Privy Council. Leader of the Official Opposition Andrew Scheer called for Trudeau's resignation. He further accused Trudeau of political interference, lying to Canadians, and corrupt conduct. Trudeau responded to those comments with a threat of a libel lawsuit through his lawyer. Opposition parties and former attorneys-general asked the Royal Canadian Mounted Police (RCMP) to investigate whether Trudeau's conduct qualifies as obstruction of justice. In April, Trudeau expelled Wilson-Raybould and Philpott from the Liberal caucus.
After a six-month-long investigation, Ethics Commissioner Dion issued a report that concluded that Trudeau had contravened Section 9 of the federal Conflict of Interest Act by improperly pressuring Wilson-Raybould. Dion wrote that while Wilson-Raybould was never officially directed to interfere, this influence was "tantamount to political direction". Dion did not find that any actual political interference in the prosecution occurred; however, he reported he did not have access to all of the evidence. Under the Act, there are no sanctions specified for the violation. After the commissioner's report was released, the Prime Minister released a statement both taking responsibility for and defending his actions. The opposition leaders have called for further investigations.
Background
SNC-Lavalin bribery charges
SNC-Lavalin's Board of Directors became aware of financial irregularities concerning the company's activities in Libya by early 2009. The board raised concerns about the cost of a trip that Al-Saadi Gaddafi took to Canada in 2008—totalling $1.9 million—which SNC-Lavalin paid for. The board issued Stéphane Roy, the company's financial controller, a "serious warning" for the size of the Gaddafi bill. The board had also expressed concerns about the amounts of cash kept by SNC's Libyan office—at that time approximately $10 million—according to the company's chief financial officer. In May 2009, the board ordered that no more than $1 million in cash should be kept in the company's safe in Libya.
On 19 February 2015, the Royal Canadian Mounted Police (RCMP) and the Public Prosecution Service of Canada (PPSC) laid charges against SNC-Lavalin Group Inc. and two of its subsidiaries: SNC-Lavalin International Inc. and SNC-Lavalin Construction Inc. Each firm was charged with one count of fraud under section 380 of the Criminal Code, and one count of corruption under Section 3(1)(b) of the Corruption of Foreign Public Officials Act. The charges allege that between 2001 and 2011, SNC-Lavalin paid CA$48 million in bribes in Libya to officials in the government of Muammar Gaddafi. They also allege that at the same time, the company defrauded Libyan organizations of CA$130 million. On the same day, SNC-Lavalin announced that they were contesting the charges and planned to enter a non-guilty plea.
In Canada, bidders for contracts with Public Services and Procurement Canada must conform to the Integrity Regime legislation passed in July 2015. The Integrity Regime is designed to exclude suppliers that have ethics-related criminal convictions, such as bribery, price fixing, or lobbying offences. If convicted, SNC-Lavalin could be banned from bidding on federal government contracts for up to ten years.
Following the 2015 Canadian federal election, with a Liberal government led by Justin Trudeau coming into power, SNC-Lavalin lobbied the government to change the Criminal Code so that they could avoid criminal prosecution. The effort lasted twenty months, and involved fifty-one meetings with government officials and MPs, as well as officials in the opposition party leaders' offices and in the newly elected Coalition Avenir Québec government. Targets of SNC-Lavalin's lobbying included the Minister of Public Services and Procurement and Accessibility, Carla Qualtrough, as well as officials in the Prime Minister's Office (PMO). The company advocated for the rapid adoption of legislation to allow a new type of sentencing agreement called deferred prosecution agreement (DPA) and changes to Ottawa's Integrity Regime to amend the 10-year contract ineligibility for suppliers with ethics-related criminal convictions.
On recommendation from the Director of Public Prosecutions (DPP) Kathleen Roussel, former SNC-Lavalin Executive Vice President Normand Morin was charged in the Court of Quebec in May 2018 with making illegal donations to Canadian federal political parties. The charges, which were unrelated to the federal charges against the company, alleging that from 2004 to 2011, Morin orchestrated and solicited political donations from employees or their spouses to Canadian federal political parties anonymously on behalf of SNC-Lavalin, to be reimbursed afterwards. The amounts paid included about CA$110,000 to the Liberal Party and CA$8,000 to the Tories. In November 2018, Morin pleaded guilty to two of the five charges, and was fined $2,000. The remaining three charges were dropped by the prosecution.
On 9 October 2018, SNC-Lavalin received a letter from the DPP, informing the company that a decision had been made to not invite the company to negotiate a DPA. The reasons cited in the letter were the "nature and gravity" of the case, "degree of involvement of senior officers of the organization", and that SNC-Lavalin "did not self-report" the alleged crimes.
Later in 2018, SNC-Lavalin brought a case to the Federal Court to compel the Public Prosecution Service to offer it a DPA. In a decision issued on 8 March 2019, the court analysed DPA legislation and affirmed that a decision not to offer a DPA is within the discretion of the prosecutor. As part of the ruling, the court reaffirmed the principle of prosecutorial independence, and SNC-Lavalin's application to compel a DPA was rejected as having "no reasonable prospect of success".
Introduction of deferred prosecution agreements In June 2018, Prime Minister Justin Trudeau's government passed an omnibus budget bill which contained amendments to the Criminal Code. The changes introduced a type of sentencing agreement called a deferred prosecution agreement (DPA). Through a DPA, sentencing and remediation agreements are negotiated, under the supervision of a judge, between federal prosecuting authorities and a corporation charged with an offence, usually in the context of fraud or corruption. Following approval and successful completion of the terms of the agreement, a company may apply for a judicial stay of criminal proceedings, and thereby avoid a criminal prosecution, trial, and penalties.
The inclusion of the Criminal Code amendments in the budget legislation raised concerns from MPs from both the Liberal party and opposition parties. Liberal MP Greg Fergus told the House of Commons Finance Committee he was concerned the change appeared to be designed to give corporations implicated in financial crimes "a little slap on the wrist", saying, "It seems we're letting those with the means have an easier time of it than those who don't have the means." According to New Democratic Party (NDP) MP Pierre-Luc Dusseault, the government was not willing to split the Criminal Code amendments from the budget to be passed as a separate bill. Dusseault also said he thought the change was intended to be made quietly. A spokesman for then-Justice Minister Raybould said prosecutors would be responsible to decide whether a company is eligible for the agreements and negotiate the terms, operating at arm's length from the government.
Prosecutorial independence Prosecutorial independence is a principle of Canadian constitutional law. In Miazga v Kvello Estate, the Supreme Court of Canada held that, "The independence of the Attorney General is so fundamental to the integrity and efficiency of the criminal justice system that it is constitutionally entrenched. The principle of independence requires that the Attorney General act independently of political pressures from the government." Similarly, in Krieger v Law Society of Alberta, the Supreme Court held, "It is a constitutional principle that the Attorneys General of this country must act independently of partisan concerns when exercising their delegated sovereign authority to initiate, continue or terminate prosecutions." The role of the Attorney General of Canada is bound by the so-called "Shawcross principle", based on a statement by Lord Shawcross in 1951. The principle (or doctrine) states that the Attorney General must take into account matters of public interest, that assistance from cabinet colleagues must be limited to advice, that responsibility for the decision is that of the Attorney General alone, and that the government is not to put pressure on him or her.
In practice, prosecutorial independence is enforced by maintaining an independent office responsible for prosecutions. Until 2006, Canada's Federal Prosecution Service was located within the Department of Justice, making it vulnerable to political interference by the Prime Minister or Cabinet. The Public Prosecution Service of Canada was established in 2006, following the enactment of the Director of Public Prosecutions Act, as an agency independent of the Department of Justice. Under the Act, the DPP is responsible for all federal criminal prosecutions. However, the Attorney General can issue a directive to the DPP regarding an ongoing prosecution or take control of a prosecution. Such directives must be provided in writing and published as a notice in the Canada Gazette, the official newspaper of the Government of Canada.
Discovery and initial reactions