Question Period Note: Status of SNC-Lavalin under the Integrity Regime

On September 23, 2021, SNC-Lavalin Inc. and SNC-Lavalin International Inc. were charged with a number of offences under the Criminal Code of Canada, including fraud on the government and forgery, which are listed offences under the Integrity Regime. In response to these charges, the Registrar of Ineligibility and Suspension (the Registrar) entered into discussion with SNC regarding their status under the Ineligibility and Suspension Policy. On May 11, 2022, the Quebec Superior Court approved a remediation agreement between Quebec prosecutors and the company, effectively staying the September 2021 charges. Shortly after this, the Registrar signed an administrative agreement with the company under the Integrity Regime to allow the company to continue to participate in federal procurements while mitigating the risks to the Government of Canada.

Note: All questions regarding the remediation agreement should be referred to the Bureau du Directeur des poursuites criminelles et pénales (DPCP) in Quebec

• The Government of Canada is committed to taking action against improper, unethical and illegal business practices and to holding companies to account for such misconduct
  • A government-wide Integrity Regime is which is focused on supplier accountability, cooperation with law enforcement and corrective action
  • In light of the recent approval of a remediation agreement with Quebec prosecutors relating to criminal charges filed in September 2021, the Registrar of Ineligibility and Suspension signed an administrative agreement with the company under the Integrity Regime
  • This agreement lays out the terms that must be met in order for the company to continue to participate in federal procurements and provides assurances that the company is actively addressing issues that led to the alleged misconduct

If pressed on why the Government of Canada continues to do business with SNC-Lavalin despite a history of misconduct:

• The charges laid in September 2021 relate to alleged misconduct from 20 years ago, the department continues to apply the Integrity Regime and is following the procedures set out in the Ineligibility and Suspension Policy
• The administrative agreement lays out the conditions that must be met for SNC-Lavalin to continue to do business with the GoC

If pressed on why the Government took eight months to make a decision regarding the company under the Integrity Regime:

• Following charges in September 2021, the Registrar of Ineligibility and Suspension entered into discussions with SNC-Lavalin pursuant to the Government of Canada’s Integrity Regime
• The decision of the Registrar followed the processes laid out in the Ineligibility and Suspension Policy and was also informed by ongoing court proceedings in Quebec relating to the criminal charges

If pressed on the difference between a remediation agreement and an administrative agreement:

• Administrative agreements are available under the Integrity Regime and are negotiated between the Registrar of Ineligibility and Suspension and affected suppliers. These agreements allow the supplier to continue to do business with the Government of Canada while protecting the integrity of the federal procurement system. Common terms in administrative agreements include improvements to corporate compliance programs as well as independent oversight and reporting on progress
• Remediation agreements are available under Canadian criminal law and are used to address criminal charges. Specific questions about SNC’s remediation agreement should be put to the Directeur des poursuites criminelles et pénales au Quebec

Integrity Regime

Under the Integrity Regime, a supplier may be suspended or declared ineligible to do business with the Government if, in the previous 3 years, it, members of its board of directors or its affiliates, have been charged with or convicted of one of the offences listed in the Ineligibility and Suspension Policy in Canada, or similar offences abroad. A supplier can be suspended for a period of 18 months and subject to extension pending final disposition of the charges.

Pursuant to the Ineligibility and Suspension Policy, an administrative agreement is an instrument that allows the federal government to seek greater assurances from a supplier to further mitigate the risk of doing business with them. Administrative agreements stipulate the terms and conditions that a supplier must meet in order to maintain its status to contract with the Government of Canada. The existence of an administrative agreement is made public and listed on the Integrity Regime’s website. Among other things, such agreements generally include requirements associated with necessary remedial measures, compliance programs, and regular reporting by an independent third party.

SNC-Lavalin

SNC-Lavalin provides various architecture and engineering services in support of Public Services and Procurement Canada’s (PSPC) real property projects. Contracts have been awarded either through open Requests for Proposals or via call-ups using Standing Offers on which the company is pre-qualified.

2021 Criminal Charges against SNC-Lavalin

On September 23, 2021 SNC-Lavalin Inc., and SNC-Lavalin International Inc. were each charged with the following offences under the Criminal Code of Canada:

• Forgery (366/367 C.C.)
• Conspiracy to commit forgery (465/366/367 C.C.)
• Fraud (380 C.C.)
• Conspiracy to commit fraud (465/380 C.C.)
• Fraud on the government (121 C.C.)
• Conspiracy to commit fraud against the government (465/121 C.C.)

The charges related to s. 121, 366, and 380 (when against her Majesty) are listed offences under the Integrity Regime that can lead to suspension and, if convicted, ineligibility to participate in the federal procurement system.

In response to the criminal charges, on September 23, 2021, the Registrar of Ineligibility and Suspension entered into discussions with SNC Lavalin regarding its status under the Ineligibility and Suspension Policy. Following the negotiation of a remediation agreement with Quebec prosecutors, the criminal charges were effectively stayed, and the Registrar of Ineligibility and Suspension signed an administrative agreement with the company, which will maintain the supplier’s status under the Integrity Regime so long as the conditions of the agreement are met.

The Quebec Directeur des poursuites criminelles et pénales invited SNC-Lavalin Inc. and SNC-Lavalin International Inc. to negotiate a remediation agreement under the Criminal Code to resolve the above identified charges. On May 6, 2022, the company announced that it had negotiated remediation agreement with le Directeur des poursuites criminelles et pénales (DPCP) du Quebec to resolve their September 2021 charges. The remediation agreement is subject to approval by the Quebec Superior Court, which was granted on May 11, 2022.

2015 Criminal Charges against SNC-Lavalin

In 2015, SNC-Lavalin Group Inc., SNC-Lavalin Construction Inc., and SNC-Lavalin International Inc. were charged with one count of corruption and one count of fraud for alleged improper payments to officials in Libya.

On December 9, 2015, pursuant to the Ineligibility and Suspension Policy, PSPC entered into an administrative agreement with SNC-Lavalin with respect to the above noted charges. The agreement permitted SNC-Lavalin to contract with the Government while criminal proceedings were underway and on condition that certain corporate compliance conditions were met.

On December 18, 2019, SNC-Lavalin Construction Inc. pleaded guilty in the Court of Quebec to one count of fraud contrary to paragraph 380(1)(a) of the Criminal Code, which is not a listed offence under the Ineligibility and Suspension Policy trigger as the fraud was not against Her Majesty, debarment under the Integrity Regime was not triggered. The remaining charges were stayed against all three defendants as a result of the resolution. In accordance with its terms and conditions, the administrative agreement between PSPC and SNC-Lavalin concluded twelve months following the stay of the charges, on December 18, 2020.

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