SNC-Lavalin affair

SNC-Lavalin headquarters in Montreal, Quebec.

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.[3]

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.[4][5]

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.[6][7] If convicted, SNC-Lavalin could be banned from bidding on federal government contracts for up to ten years.[6][8]

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,[9] as well as officials in the opposition party leaders' offices and in the newly elected Coalition Avenir Québec government.[10] 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).[11] 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.[11]

On recommendation from the Director of Public Prosecutions (DPP) Kathleen Roussel, former SNC-Lavalin Executive Vice President Normand Morin[12] 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.[13][14] 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.[15]

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.[16][3]

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".[17][18]

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.[19][20]

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.[21]

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."[22] 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."[23] 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.[24][25][26]

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.[27] 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.[28][29] 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.[28][29][30]

In a press conference, the same day as the ethics investigation was announced, Trudeau said he had full confidence in Wilson-Raybould and that they had spoken the previous fall, when he told her directly that decisions regarding the DPP were hers alone. Trudeau also said he respected her view that she could not comment due to privilege, adding, "I also highlight that we're bound by cabinet confidentiality. In our system of governance, her presence in cabinet should speak for itself."[49] Wilson-Raybould resigned from Cabinet that evening.[50][51]

Jody Wilson-Raybould in 2014

In her resignation letter released the following day on 12 February, Wilson-Raybould reaffirmed her commitment to serving in Parliament, saying she had retained Thomas Cromwell, the retired Supreme Court of Canada Justice, and was getting advice on what she was legally allowed to discuss publicly.[52] Trudeau said he was "puzzled and obviously disappointed" by the resignation, telling reporters that "if anyone, particularly the attorney-general, felt that we were not doing our job responsibly and according to all the rules as a government, it was her responsibility to come forward to me this past fall and highlight that directly to me. She did not."[53]

In response to the developing events, the House of Commons Justice Committee met on 13 February to vote on hearing testimony from the PMO officials involved, as well as Wilson-Raybould herself. What would be the first of multiple hearings originally only had Lametti, Deputy Minister of Justice Nathalie Drouin, and Michael Wernick as witnesses, as the Liberal majority on the committee blocked attempts by opposition party MPs to have Wilson-Raybould testify.[54]

Three days after the press conference where Trudeau said Wilson-Raybould had not talked to him about any concerns, on 15 February, Trudeau told reporters that Wilson-Raybould had come to him the previous fall to ask if he was directing her to make a particular decision on the file, but that he had told her the decision was her own.[55] During the same press conference, he denied again that Wilson-Raybould's removal from the Attorney General position was due to her refusal to drop prosecution of SNC-Lavalin, saying, "If Scott Brison had not stepped down from cabinet, Jody Wilson-Raybould would still be minister of justice and attorney-general of Canada."[34]

Anonymous sources told The Canadian Press agency that Wilson-Raybould "had become a thorn in the side of the cabinet, someone insiders say was difficult to get along with, known to berate fellow cabinet ministers openly at the table". The Union of British Columbia Indian Chiefs argued that this was a "racist and sexist" attack on Wilson-Raybould, prompting Trudeau to apologize for the remarks.[56]

In response to the claims, the Justice Committee held a series of three public hearings on the alleged interference. Wernick, the Clerk of the Privy Council, appeared before the committee. He disputed the allegations of undue pressure on Wilson-Raybould and stated that The Globe and Mail article contained errors and unfounded speculation.[61][62]

Wilson-Raybould testified before the committee, corroborating the report by The Globe and Mail and detailing the alleged political interference.[63][64] In her prepared statement, Wilson-Raybould said:[63]

For a period of approximately four months between September and December 2018, I experienced a consistent and sustained effort by many people within the government to seek to politically interfere in the exercise of prosecutorial discretion in my role as the Attorney General of Canada in an inappropriate effort to secure a Deferred Prosecution Agreement with SNC-Lavalin.

Wilson-Raybould provided details and dates of the meetings, and named eleven people involved with the alleged efforts to interfere, including Trudeau, Wernick, Gerald Butts, Katie Telford, Bill Morneau, and other high-ranking officials in the PMO and the Minister of Finance's office.[63]

Despite the attempts to convince her to reconsider her stance given the possible economic and political consequences, Wilson-Raybould said she was "undaunted in her position to not pursue a Deferred Prosecution Agreement". She maintains the belief that despite the pressure she felt, she did not believe what transpired was illegal.[64] When asked why she did not resign from her position during the time she said improper pressure was being applied, Wilson-Raybould said: "I was, in my opinion, doing my job as the attorney general. I was protecting a fundamental constitutional principle of prosecutorial independence and the independence of our judiciary. That's the job of the attorney general."[64]

Wilson-Raybould also reiterated that Order in Council[65] leaves in place various constraints that prevent her from speaking freely about matters that occurred after she left the post of Attorney General, communications while she was Minister of Veterans Affairs, her resignation from that post, and her presentation to Cabinet after her resignation.[63] She stated that she would be willing to testify further if released from those restrictions.[63]

Trudeau gave a short press conference in Montreal following the hearings on 27 February, denying the allegations. "I and my staff always acted appropriately and professionally", he said. "I completely disagree with the characterization of the former attorney general about these events ... The decision around SNC-Lavalin was Ms. Wilson-Raybould's and hers alone. This decision is the attorney general's alone."[66]

Gerald Butts, the former Principal Secretary to Justin Trudeau

On 6 March 2019, the Justice Committee held a hearing on the claims, at which Butts testified. Butts, who had been implicated in the affair by Wilson-Raybould at the previous hearing, served as the Principal Secretary to Trudeau in the PMO.[67]

During his testimony, Butts said that he did not want to discredit Wilson-Raybould's testimony, but wanted to offer his own "different version of events". He stated he believed that "nothing inappropriate occurred" and that "nothing inappropriate was alleged to have occurred until after the cabinet shuffle". Butts said that any conversations between Wilson-Raybould and officials in the PMO were intended only to ensure that she understood the full potential impact of a criminal conviction of SNC-Lavalin and that at no time did anyone in the PMO attempt to influence Wilson-Raybould's decision. "It was not about second-guessing the decision. It was about ensuring that the attorney general was making her decision with the absolute best evidence possible", Butts testified. Butts also testified that he believed a period of twelve days was too compressed for such an important decision.[67]

Butts further stated that no concerns were raised by Wilson-Raybould until after 12 January cabinet shuffle had occurred: "If this was wrong, and wrong in the way it is alleged to have been wrong, why are we having this discussion now and not in the middle of September, or October, or November, or December?"[67]

Liberal members of the committee defeated a motion to produce all government communications between Butts and other parties mentioned in the SNC-Lavalin affair.[68]

At the hearing, Wernick testified for a second time, and stated that the decision to consider a DPA is never final, and that he was only reminding Wilson-Raybould to take public interest considerations into account.[69]

Deputy Justice Minister Nathalie Drouin also testified at the hearing. When asked, Drouin stated that it was not for her to say if the time taken for the due diligence review was adequate or not, and that she was not part of the due diligence exercise carried out by Wilson-Raybould regarding this case. Drouin also replied that "It's the responsibility of a prosecutor to assess and reassess ... in light of new facts and evidence put in front of the prosecutor."[69]

Drouin also said that at the end of October 2018, the Privy Council Office (PCO) asked her department for advice on the potential impact on SNC-Lavalin if a deferred prosecution agreement was not pursued. That advice was "not provided to PCO at the request of the minister's office".[69]

Following Butts' testimony, Trudeau gave a press conference in Ottawa on 7 March. He again denied all allegations of inappropriate or illegal pressure, and said that an "erosion of trust" and "breakdown in communications" had developed between him, his staff and the former Attorney General.[70] Trudeau also confirmed that during a 17 September meeting he asked Wilson-Raybould to "revisit her decision" not to negotiate an out-of-court settlement with SNC-Lavalin,[71] and asked his staff to follow up regarding Wilson-Raybould's final decision.[72]

During the Committee hearing, Liberal MPs blocked an effort by opposition party members to immediately invite Wilson-Raybould back to speak further about the government's effort to put pressure on her, despite the former justice minister's willingness to testify again. Instead, Liberal members voted to reconvene the Justice Committee in-camera on 19 March to consider whether to invite Wilson-Raybould and other senior government officials to testify.[73]

On 19 March 2019, the Justice Committee held an in-camera meeting where Liberal members introduced and passed a motion to end any further probe into the SNC-Lavalin scandal, indicating that they preferred to leave any remaining investigation to the ethics commissioner. In a written letter to the committee chair, the Liberal members stated that "No witness was prevented from providing evidence on any relevant information during the period covered by the waiver", and concluded that "Canadians can judge for themselves the facts, the perspectives and relevant legal principles".[74] In total, the Justice Committee held eleven meetings over five weeks, accumulating thirteen hours of testimony from ten different witnesses.[75] The committee did not hear from some individuals implicated in the controversy by Wilson-Raybould, including Katie Telford (Trudeau's chief of staff) and senior staffers Ben Chin, Elder Marques, and Mathieu Bouchard. The Conservative Party and New Democratic Party also maintain that Wilson-Raybould should have been called back to committee to respond to testimony from Wernick and Butts.[76]

On 29 March, the Justice Committee released a recording, made secretly by Wilson-Raybould, of the telephone call between her and Wernick that took place on 19 December 2018. In it, Wernick told Wilson-Raybould that Trudeau wanted a DPA for SNC-Lavalin "one way or another". Wilson-Raybould responded that the request was inappropriate political interference in the justice system and that she was not comfortable having the conversation.[77][78][79] The recording was accompanied by a submission of forty pages supplementing her original testimony, including copies of texts and emails, outlining Wilson-Raybould's view of events and their implications for prosecutorial independence.[80][79] In her submission, she also explained that her decision to resign from the cabinet was prompted by Trudeau's suggestion the day earlier that "her continued presence in his cabinet speaks for itself".[79]

The PMO responded that Wernick never briefed Trudeau on this conversation.[81] Wernick said that he did not brief the Prime Minister on the call due to the Holiday season break, and that he did not discuss SNC again with the PMO until the story was leaked in early February.[82]

On 25 March 2019, CTV News reported that there was a conflict between Wilson-Raybould and Trudeau in 2017 when Trudeau disagreed with a recommendation by Wilson-Raybould to appoint Glenn Joyal to the Supreme Court of Canada, replacing Beverley McLachlin as the Chief Justice of Canada.[121][122] The report suggests the Prime Minister could have had reasons unrelated to the SNC-Lavalin affair for moving Wilson-Raybould out of the Justice portfolio.[123] Wilson-Raybould denied there was any conflict with Trudeau over the Supreme Court recommendation. Trudeau and Wilson-Raybould both condemned the leaks and denied that they were the source.[122][124]

The Privacy Commissioner of Canada launched an investigation into the leak of confidential information on 4 April, after receiving a request from opposition parties. The investigation will include organizations covered by the Privacy Act, such as the Privy Council Office and the Department of Justice.[125] The Privacy Act covers neither ministerial offices nor the PMO.[125][126]

Gerald Butts resigned as the Principal Secretary to Prime Minister Trudeau on 18 February 2019. When resigning, he denied that Wilson-Raybould had been pressured, saying that the accusation that he had pressured Wilson-Raybould was distracting from the work of the PMO.[127]

Jane Philpott, the President of the Treasury Board, resigned from her post in Trudeau's cabinet on 4 March in solidarity with Wilson-Raybould. In her statement she said that she had "lost confidence in how the government has dealt with this matter and in how it has responded to the issues raised".[128] Philpott was considered to be one of Trudeau's most trusted ministers.[129][130] Philpott, then the health minister, had worked together with Wilson-Raybould on the assisted-dying legislation passed in 2016.[123]

Michael Wernick announced on 18 March that he would be retiring ahead of schedule from his position as the Clerk of the Privy Council and Secretary to Cabinet "due to recent events",[131] namely the erosion of trust and being seen as partisan; which would affect the civil service as a whole and cast doubt on his position should an opposition party form the next government.[132] On 18 April, Wernick retired as Privy Council clerk.[133]

On 29 March, CBC published an article saying that the Liberal caucus in the House of Commons was planning to vote on expelling Wilson-Raybould and Philpott. Caucus members said they did not think Wilson-Raybould and Philpott could remain party members, "given the damage done to the government by the SNC-Lavalin affair". Liberal MPs criticized Wilson-Raybould's release of the phone call recording, with Minister of Tourism Mélanie Joly describing it as "fundamentally wrong" and the former Solicitor General under Jean Chrétien, Wayne Fox, calling it "about as low as you can go".[134][135] Prime Minister Trudeau did not state a position on the vote, saying, "As for what Dr. Philpott and Ms. Wilson-Raybould intend to do as next steps, people are going to have to ask them".[136][135] The day the vote was scheduled to proceed, Wilson-Raybould wrote a letter to the caucus arguing that she should remain a member, saying "Ultimately the choice that is before you is about what kind of party you want to be a part of, what values it will uphold, the vision that animates it, and indeed the type of people it will attract and make it up."[137] Ultimately, no recorded caucus vote was held.

Trudeau expelled Wilson-Raybould and Philpott from the Liberal Caucus on 2 April 2019. He also removed Wilson-Raybould and Philpott[138] as the Liberal party candidates for Vancouver Granville and Markham—Stouffville respectively in the 2019 Canadian federal election.[139] At a press conference, Trudeau said that trust between the two women and the rest of the Liberal caucus had been broken, calling Wilson-Raybould's recording "unconscionable". He also talked about the danger of "civil wars within parties", saying "Our political opponents win when Liberals are divided. We can't afford to make that mistake. Canadians are counting on us."[140] After she was informed of the decision, Wilson-Raybould stated she has no regrets, and did what she thought "needed to be done based on principles and values that must always transcend party".[140] On the same day, Philpott said she was "stunned" at having been expelled without being given a chance to speak to the national caucus, and that the attacks on her and Wilson Raybould had been based on "inaccuracies and falsehoods".[141][142]

The decision was condemned by all opposition parties, with Conservative Party leader Andrew Scheer calling it a "betrayal of justice" and saying that people who blow the whistle on misconduct should be protected, not punished.[143][144][145] NDP Leader Jagmeet Singh said that Wilson-Raybould tried to "put integrity and what's right for Canadians over what helps the Liberals" and that she "deserved better".[145] Green Party leader Elizabeth May said Wilson-Raybould had shown honour and integrity in her work, and that "the laws weren't broken because she held firm".[146] The day after the expulsions, about fifty young women in the House of Commons as part of a delegation of Daughters of the Vote, a youth leadership event, turned their backs on Trudeau in protest during his speech to the delegation.[147] The now independent MPs experienced social shunning from many of their former Liberal colleagues, which began to form when they resigned from the cabinet.[148]

In May 2019, Wilson-Raybould and Philpott announced their intentions to run as independent candidates for the 2019 federal election.[149] In an interview with the New York Times, Trudeau maintained his innocence in the matter and suggested that the severity of the issue had been overly exaggerated, stating that "the media and opposition were being distracted with this internal dispute that has been invented and amplified."[150]

On 10 September 2019, The Globe and Mail published a story claiming the Trudeau government was not co-operating with an RCMP inquiry into potential obstruction of justice. A waiver for confidentiality was not provided by the Clerk of the Privy Council nor did Trudeau override the Clerk which would allow RCMP access to both staffers and materials.[151] According to the report, sources who spoke to The Globe and Mail were told to not discuss matters regarding the scandal with police officials. While Scheer said the RCMP were investigating the Prime Minister's Office there was no evidence as of 10 September 2019 that the RCMP has begun an investigation into anyone in the PMO.[152][153][154] Wilson-Raybould was interviewed by investigators on 10 September 2019.[155][156]