Trudeau Election Prospects Founder with SNC-Lavalin Scandal

Adding to the flotsam swirling around the once-unsinkable SNC-Lavalin, the engineering company’s credit rating went overboard Aug. 20 when S&P Global Markets downgraded its debt to junk. This followed, by days, the ruling of a federal ethics watchdog that Canadian Prime Minister Justin Trudeau broke conflict-of-interest law when he tried to spare the company from prosecution for bribery.

SNC-Lavalin has long been symbiotic with Trudeau’s Liberal Party, paying out political donations, sometimes legal, sometimes not, and receiving, perhaps in return, a reliable stream of infrastructure contracts, including major rail projects.

“Weaker-than-expected earnings and cash flow along with uncertainty from various headwinds contribute to our view that SNC’s operating efficiency and financial risk profile have deteriorated to a level that no longer supports an investment-grade rating,” S&P said.

While the SNC-Lavalinscandal may not bring down his government in elections scheduled for Oct. 21, it could easily cost the Liberals their parliamentary majority–and may well find Trudeau himself facing corruption charges in a court of law.

Ironically, for a Prime Minister who promised “sunny ways” after his election in 2015 and touted his elevation of women and indigenous persons to positions of power, Trudeau’s reputational crash occurred when he humiliated the country’s attorney general—First Nations woman Jody Wilson-Raybould—by firing her and patronizingly offering her the lesser office of minister responsible for native affairs.

Like his father Pierre Trudeau, whose historical reputation as Prime Minister is marred by bursts of arrogance, Trudeau the younger has eschewed even cynical humility for haughty defiance. He insists the official ethics commissioner, Mario Dion, was wrong when he said Aug. 14 that Trudeau “directly and through his senior officials” tried to have corruption charges against SNC-Lavalin dropped.

SNC-Lavalin, which employs 9,000 engineers, salespersons and administrators, was and remains at risk of a 10-year ban on federal contracts if convicted of making $48 million in illegal payments to the Mohammar Qaddafi regime in Libya between 2001 and 2011. Trudeau, said the commissioner, violated the Conflict of Interest Act. Unusually, the Royal Canadian Mounted Police revealed after publication of the ethics report that federal anti-corruption officials have opened a criminal investigation into Trudeau’s conduct.

Trudeau has argued he was simply doing his job trying to protect jobs in his home province, Quebec. That defense is actually an apparent admission of guilt under the clear criminal code prescription against considering “national economic interest” when deciding whether to prosecute companies.

Exposure of Trudeau’s attempt to spare SNC-Lavalin effectively killed prospects for lenient treatment. The case returns to court in September, at the peak of the federal election campaign.

Trudeau’s self-incriminating jobs plea plays poorly outside of the province where, not without reason, the Liberal Party has long been seen as the political extension of Montreal’s professional collection of notaries, lawyers and engineers. Justin Trudeau was supposed to change all of that. Instead of pre-election applause for bright sunny ways, the Prime Minister stands accused of perpetuating the Liberal tradition of dark money ways.

Contributing Editor David Thomas is a reporter who has covered government and society since graduating from Ottawa’s Carleton University with degrees in political science and journalism. He has written for National Geographic, Maclean’s, The Globe and Mail, The Gazette, and The Canadian Press news agency from postings in Ottawa, Montreal, Quebec City, Toronto and London, England. “Railroading has been a personal fascination since a childhood timed fortunately enough to witness the golden years of steam on the late-to-dieselize Canadian National and Canadian Pacific,” he says.