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, forgery, and fraud, which are listed offences under the Integrity Regime. [Redacted]

• The Government of Canada is committed to taking action against improper, unethical and illegal business practices and holding companies accountable for such misconduct
  • To help ensure the Government of Canada does business with ethical suppliers, a government-wide Integrity Regime is in place. The Regime holds suppliers accountable for their misconduct, and also encourages them to cooperate with law enforcement and take corrective action
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  • At this time, SNC-Lavalin’s status under the Integrity Regime remains unchanged, and it faces no restrictions to participating in the federal procurement system

If pressed on possible actions under the Integrity Regime:

• Under the Integrity Regime, suppliers charged with a listed offence may be suspended from contracting for up to 18 months if they pose a significant risk to the Government of Canada
• Public Services and Procurement Canada may also impose an administrative agreement on a supplier in lieu of suspension to mitigate risks of contracting with a particular supplier

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

• Since 2015, the Government of Canada has applied the Integrity Regime to its dealings with SNC-Lavalin pursuant to the Ineligibility and Suspension Policy
• With regards to its earlier charges of misconduct in Libya, an administrative agreement was imposed on the supplier in 2015 in order to protect the integrity of our dealings with them
• The administrative agreement concluded in 2020 following resolution of these charges
• These new charges relate to alleged misconduct from 20 years ago and the department continues to apply the Integrity Regime to this latest situation and is following the procedures set out in the Ineligibility and Suspension Policy

NOTE: All questions regarding the remediation agreement should be referred to le Bureau du Directeur des poursuites criminelles et pénales in 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. Among other things, each agreement would 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 C.C.)
• Conspiracy to commit forgery (465/366 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 are listed offences under the Integrity Regime that can lead to suspension and if convicted, a supplier would be ineligible to participate in the federal procurement system.

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The Quebec Directeur des poursuites criminelles et pénales invited SNC-Lavalin Inc. and SNC-Lavalin International Inc. to negotiate a remediation agreement to resolve the above identified charges.

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. plead 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. 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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