Canadian Manufacturing

SNC to reimburse Quebec municipalities, agencies for ill-gotten gains

Company to submit proposal to pay for fraudulent contracts obtained in Montreal, Laval, Quebec City and Saint-Cyprien in the Lower St. Lawrence


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MONTREAL—Engineering giant SNC-Lavalin said May 10 it wants to reimburse an undisclosed amount of money to settle contracts it obtained through fraudulent acts in Quebec.

The provincial government launched a program last November that gave businesses and individuals two years to voluntarily repay funds they received through ill-gotten work dating back to 1996.

Following an internal investigation, the Montreal-based firm said it will submit a proposal in the coming days for fraudulent contracts obtained in Montreal, Laval, Quebec City and Saint-Cyprien in the Lower St. Lawrence.

“SNC-Lavalin underscores its commitment to working with the Government of Quebec and the province’s public agencies to reach a settlement that is comprehensive, final and fair,” CEO Neil Bruce said in a news release Tuesday.

Other municipalities or public bodies that feel wronged can present evidence as to why they should obtain restitution. Public bodies have 60 days following the submission of a proposal to formally respond before negotiations begin through retired judge Francois Rolland, who will act as mediator.

Quebec’s justice minister must approve all settlements, which must be reached by November 2017.

Top SNC-Lavalin executives testified before the Charbonneau corruption inquiry that the company illegally donated money to provincial and municipal political parties to obtain work contracts.

SNC-Lavalin said Tuesday it has found no evidence of fraud relating to provincial contracts or the McGill University Health Centre in Montreal, which is the subject of criminal charges against former company executives.

“The entire process is confidential and does not entail any form of admission,” said spokesman Louis-Antoine Paquin. By participating in the program, companies cannot be sued civilly over the contracts but are not immune to criminal charges.

Quebec’s restitution program doesn’t affect contracts in other provinces or those awarded by the federal government. It also doesn’t affect criminal fraud and corruption charges SNC-Lavalin faces over allegations of illegal activity in Libya. The company has said it will plead not guilty to those charges.

Under the reimbursement program, companies repay at least 20 per cent of the value of the contracts plus a 10 per cent administrative charge.

SNC-Lavalin said the proposed penalties it is willing to pay will remain confidential, although a final amount recovered by all participants will be disclosed in late 2017 or early 2018.

Bruce said the company has spent significant time and money to strengthen its ethics and compliance program since it uncovered problems in 2012 that led to the removal of a former chief executive and other senior officials.

Quebec’s securities regulator, the Autorite des marches financiers, certified the company in February 2014 to do business with Quebec’s public sector organizations.

In December 2015, SNC-Lavalin signed an administrative agreement under a federal government program that allows companies facing charges to continue to secure contracts from Ottawa.


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