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SNC-Lavalin would easily manage a ban on federal projects

SNC-Lavalin’s continued success shows that being barred from bidding on projects by one public institution has a negligible impact on the operations of such a large multinational. Since 2013, SNC-Lavalin has been banned from bidding on World Bank projects because of its involvement in corruption and bribery. This has not stopped SNC-Lavalin from thriving. If SNC-Lavalin was banned from bidding on federal government projects for a decade, it would still be free to bid on provincial and municipal work, which control nearly 90 per cent of Canada’s infrastructure spending by government.

Nor was there ever any real chance of SNC-Lavalin moving its headquarters abroad. Quebec’s giant pension fund the Caisse de dépôt et placement du Québec owns 20 per cent of SNC-Lavalin’s stock; the Caisse also has a written agreement with SNC-Lavalin that it cannot move its headquarters out of Montreal before 2024. The Caisse showed in 2012 that it is willing to flex its muscle to stop foreign interests from intruding into Quebec’s strategic business interests when it succeeded in stopping Lowe’s from taking over the Rona hardware store chain at the time.

Rather than protecting the jobs of SNC-Lavalin employees and suppliers, the Trudeau government is protecting its political interests in Quebec. The willingness of the federal government to aggressively intercede on behalf of SNC-Lavalin is in stark contrast with its refusal to remove environmental and legal roadblocks to actually building the Trans Mountain pipeline expansion. The prime minister’s willingness to intervene for SNC-Lavalin reflects a cynical political judgement that his government depends more on Quebec than on Alberta for votes, not an economic need to protect jobs that were never imperilled.

Ian Lee is a professor at Carleton University’s Sprott School of Business. Philip Cross is a fellow at the Macdonald-Laurier Institute.