What is going on in Canada?

Canada’s prime minister, Justin Trudeau, is facing the biggest political scandal of his administration. The affair centres around allegations that his former attorney general, Jody Wilson-Raybould, was improperly pressured by some of his closest advisers to prevent the prosecution of a large Canadian engineering firm over accusations of fraud and bribery. Thus far, the scandal has been politically costly; Gerald Butts, a longtime friend of Trudeau’s, and his closest adviser, resigned two weeks ago. Wilson-Raybould had quit a week earlier, within hours of the prime minister denying she was unhappy. A handful of polls are showing the scandal is politically unpopular for the governing Liberals – which is worrying for them, given there is a federal election in October.

What is the company accused of?

SNC-Lavalin, based in Montreal, is accused of paying C$48m worth of bribes in Libya to Muammar Gaddafi’s family, in order to secure lucrative contracts. The bribery is alleged to have occurred between 2001 and 2011. If found guilty, the company would be barred from bidding on federal projects for a decade. SNC-Lavalin employs nearly 50,000 people worldwide, with 3,400 in Quebec.

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Company executives have been lobbying for a “deferred prosecution agreement”, which in effect allows them to pay a fine in lieu of a criminal prosecution, with no ban on bidding for contracts. But federal prosectors have decided to pursue a trial.

This is where the scandal is centred: the prime minister and his aides, along with the finance minister, have been accused of pressing Wilson-Raybould to intervene and asking prosecutors to accept a deferred prosecution agreement. Wilson-Raybould declined to override the judgment of her top legal team.

What does the former attorney general say?

In searing testimony in front of parliament’s justice committee, Wilson-Raybould detailed “consistent and sustained” efforts to change her mind. Despite repeated assertions by Wilson-Raybould that she would not bend, she told a justice committee on Wednesday the pressure intensified – and included “veiled threats” by aides that she was on course for a clash with the prime minister. She said that while it was proper for ministers and their staff to consult her about protecting jobs, it was inappropriate for her to make decisions based on “partisan political considerations”. Her testimony also marked the first public assertion that Trudeau lobbied her – to the point that she felt obliged to warn him what he was asking was improper.

She also told parliamentarians she suspected her refusal to back down lay behind her move to the Veterans’ Affairs portfolio in a mid-January cabinet reshuffle.

What does Trudeau say?

Trudeau has not denied that he and his team spoke to Wilson-Raybould and her staff about SNC-Lavalin. He says all of their discussions were respectful and within the bounds of the rules. On Thursday, he reiterated his belief that as prime minister, it is his job and duty to protect the jobs of Canadians – likely a reference to the potential for job losses in the event of a conviction.

Is it a big deal?

The leader of the opposition, Andrew Scheer, has called on Trudeau to resign –something Trudeau has rejected. Other political leaders have called for more investigations into the affair – and the country’s ethics commissioner is investigating. But at the justice committee hearing on Wednesday, members of Trudeau’s Liberal party appeared as unified; there have been no high-profile shows of public support for Wilson-Raybould within the party since Wednesday.

What is local media saying?

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On Thursday, Wilson-Raybould’s testimony was on the front page of every major paper in the country, with most running large, dramatic photos of the defiant former attorney general. “I Said ‘No’, My Mind Had Been Made Up,” said the National Post. “Wilson-Raybould Speaks Her Truth,” said the Toronto Star. “Wilson-Raybould points accusing finger at PM,” said the Vancouver Sun. And the Globe and Mail, which broke the story, ran with the headline: “An effort to politically interfere.”

What happens next?

A number of figures have requested to testify before the justice committee, including Gerald Butts, Trudeau’s former adviser and Michael Wernick, the country’s top public servant. Both were present in many of the discussions – and both have publicly stated previously they did nothing wrong. The prime minister has also said he would consider the future of Wilson-Raybould in the party. While the scandal will likely not damage him in Quebec, where his support of SNC-Lavalin is viewed positively, it could prove damaging in the rest of the country.

• This article was amended on 4 March 2018 to include a reference to Wilson-Raybould’s change of cabinet portfolio.