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Justin Trudeau and SNC-Lavalin: Understanding the ongoing political crisis in Canada

On Monday, Trudeau’s minister — and one of his most trusted aides — Jane Philpott, resigned, saying it was “untenable” for her to stay in the government after the “serious concerns” that the scandal had raised.

By: Express News Service | New Delhi |
Updated: March 7, 2019 8:41:29 am
Justin Trudeau, Canada, Canada PM, SNC-Lavalin scandal, Jody Wilson-Raybould, Canada politics, canada elections, liberal party, world news, indian express Canadian Prime Minister Justin Trudeau. (AP Photo)

The Scandal in Canada

Canada’s Prime Minister Justin Trudeau has been accused of pressuring the country’s former attorney general, Jody Wilson-Raybould, to cut a deal with SNC-Lavalin, one of the world’s largest engineering and construction companies, which is facing charges of corruption. Trudeau is alleged to have retaliated when she Wilson-Raybould declined to do his bidding.

According to Wilson-Raybould, who resigned her Cabinet position last month, the Prime Minister and his aides worked hard to persuade her that prosecuting SNC-Lavalin would cost Canadian workers jobs and the ruling Liberal Party votes in the general elections due in October. She has alleged that she was given “veiled threats”, and was ultimately moved out of the Justice Department in January.

On Monday, another of Trudeau’s ministers — and one of his most trusted aides — Jane Philpott, resigned, saying it was “untenable” for her to stay in the government after the “serious concerns” that the scandal had raised.

But Gerald Butts, who was Principal Secretary to Trudeau until the middle of last month, has insisted that no political pressure was brought on Wilson-Raybould, and that the government was only worried about what legal proceedings against the company might impact local economies.

Justin Trudeau and SNC-Lavalin: Understanding the ongoing political crisis in Canada Trudeau (centre), Liberal MP and former Canadian justice minister Jody Wilson-Raybould (L) and Gerald Butts, who quit last month as Trudeau’s chief aide. (Reuters Photos)

The Company

SNC-Lavalin is accused of having offered bribes to the tune of $36 million to Libyan officials of the regime of Col Muammar Gaddafi between 2001 and 2011. The company has asked for a remediation agreement instead of being put on trial, pleading that it has now cleaned up its act. On the SNC-Lavalin case, Philpott has said: “I must abide by my core values, my ethical responsibilities, constitutional obligations. There can be a cost to acting on one’s principles, but there is a bigger cost to abandoning them.”

SNC-Lavalin is headquartered in Quebec, a swing province that is generally seen as being critical for the Liberal Party in the October election. The history of Canada’s elections show when Liberals win Quebec, they also end up winning a majority in Parliament; and when they lose Quebec, they lose the election. After Wilson-Raybould made her allegations, the Liberal premier of Quebec, Philippe Couillard, was ousted in the provincial election.

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The Prime Minister

Trudeau won in 2015 on a platform of transparency, gender equality, and the promise of reconciliation with the country’s indigenous peoples. He has denied the allegations, and said that if any lobbying was done that appeared to favour SNC-Lavalin, it was only to save jobs. On Thursday, he repeated that he did not agree with Wilson-Raybould’s “characterisation” of events.

Canada’s Ethics Commissioner is probing Wilson-Raybould’s accusations for possible flouting of conflict-of-interest rules. Wilson-Raybould has said she does not believe that laws were broken, but Trudeau’s office was indeed guilty of impropriety.

The leader of Canada’s opposition, Andrew Scheer of the Conservative Party has asked that Trudeau resign, because he has lost the “moral authority” to lead the country.

SNC-Lavalin and India

There is a longstanding “SNC-Lavalin case” in India as well. It relates to the award for renovation and modernisation of three hydroelectric projects in Kerala during 1995-97.

After an MoU between Kerala State Electricity Board and the Canadian company was signed on August 10, 1995, an audit by the Principal Accountant General of Audit pegged the loss to the exchequer at over Rs 300 crore. The PAG report triggered a storm, which led to an inquiry by the Vigilance and Anti-Corruption Bureau (VACB). The VACB found substance in the PAG report, and registered a case against eight persons.

Later, on the order of the High Court, the CBI took up the case. It dropped some names from the list of the accused, and added those of Kerala’s present Chief Minister Pinarayi Vijayan, and the then joint secretary of the Electricity Department to it.

The MoU between KSEB and the Canadian company was replaced by three consultancy contracts, which were then replaced by three supply ontracts. The CBI alleged that Vijayan as Electricity Minister showed undue haste and interest in the execution of the supply contracts in February 1997.

After the designated CBI court in Thiruvananthapuram discharged Vijayan and six other accused on November 5, 2013, the agency approached the High Court, which upheld the trial court order in 2017. The Supreme Court will hear final arguments in CBI’s appeal in the first or second week of April.

Vijayan has maintained all along that the case is politically motivated. The case led to a political storm in Kerala, and an open factional war in the CPM between Vijayan and his bete noire V S Achuthanandan.

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