Monday, January 30, 2023
No Result
View All Result
  • Media
Support Us
Macdonald-Laurier Institute
  • Home
  • About
    • Who We Are
    • Who Makes MLI Work
    • Tenth Anniversary
    • Jobs
  • Experts
    • Experts Directory
    • In Memoriam
  • Issues
    • Domestic Policy Program
      • Agriculture and Agri-Food
      • Canada’s Political Tradition
      • Economic policy
      • Energy
      • Health Care
      • Innovation
      • Justice
      • Social issues
      • Telecoms
    • Foreign Policy Program
      • Foreign Affairs
      • National Defence
      • National Security
    • Indigenous Affairs Program
  • Projects
    • COVID and after: A mandate for recovery
    • COVID Misery Index
      • Beyond Lockdown
    • Provincial COVID Misery Index
    • Centre for Advancing Canada’s Interests Abroad
      • Dragon at the Door
      • The Eavesdropping Dragon: Huawei
    • An Intellectual Property Strategy for Canada
    • Speak for Ourselves
    • Canada and the Indo-Pacific Initiative
    • DisInfoWatch.org
    • The Transatlantic Program
    • Indigenous Prosperity at a Crossroads
      • Aboriginal Canada and Natural Resources
    • Talkin’ in the Free World with Mariam Memarsadeghi
    • Past Projects
      • Justice Report Card
      • Munk Senior Fellows
      • A Mandate for Canada
      • Confederation Series
      • Fiscal Reform
      • The Canadian Century project
      • Fixing Canadian health care
      • Internal trade
      • From a mandate for change
      • Size of government in Canada
  • Events
    • Upcoming Events
    • Past Events
      • MLI Dinners
      • Great Canadian Debates
  • Latest News
  • Libraries
    • Inside Policy Magazine
      • Inside Policy Back Issues
      • Inside Policy Blog
    • Papers
    • Columns
    • Books
    • Commentary
    • Straight Talk
    • Video
    • Multimedia
    • Podcasts
    • Leading Economic Indicator
    • Labour Market Report
    • MLI in the Media
  • Home
  • About
    • Who We Are
    • Who Makes MLI Work
    • Tenth Anniversary
    • Jobs
  • Experts
    • Experts Directory
    • In Memoriam
  • Issues
    • Domestic Policy Program
      • Agriculture and Agri-Food
      • Canada’s Political Tradition
      • Economic policy
      • Energy
      • Health Care
      • Innovation
      • Justice
      • Social issues
      • Telecoms
    • Foreign Policy Program
      • Foreign Affairs
      • National Defence
      • National Security
    • Indigenous Affairs Program
  • Projects
    • COVID and after: A mandate for recovery
    • COVID Misery Index
      • Beyond Lockdown
    • Provincial COVID Misery Index
    • Centre for Advancing Canada’s Interests Abroad
      • Dragon at the Door
      • The Eavesdropping Dragon: Huawei
    • An Intellectual Property Strategy for Canada
    • Speak for Ourselves
    • Canada and the Indo-Pacific Initiative
    • DisInfoWatch.org
    • The Transatlantic Program
    • Indigenous Prosperity at a Crossroads
      • Aboriginal Canada and Natural Resources
    • Talkin’ in the Free World with Mariam Memarsadeghi
    • Past Projects
      • Justice Report Card
      • Munk Senior Fellows
      • A Mandate for Canada
      • Confederation Series
      • Fiscal Reform
      • The Canadian Century project
      • Fixing Canadian health care
      • Internal trade
      • From a mandate for change
      • Size of government in Canada
  • Events
    • Upcoming Events
    • Past Events
      • MLI Dinners
      • Great Canadian Debates
  • Latest News
  • Libraries
    • Inside Policy Magazine
      • Inside Policy Back Issues
      • Inside Policy Blog
    • Papers
    • Columns
    • Books
    • Commentary
    • Straight Talk
    • Video
    • Multimedia
    • Podcasts
    • Leading Economic Indicator
    • Labour Market Report
    • MLI in the Media
No Result
View All Result
Macdonald-Laurier Institute

Why Trudeau’s excuse that he’s protecting SNC-Lavalin ‘jobs’ is total baloney: Philip Cross and Ian Lee in the Financial Post

March 15, 2019
in Columns, Domestic Policy Program, Economic policy, In the Media, Justice, Latest News, Philip Cross, Politics
Reading Time: 3 mins read
A A

Trudeau’s willingness to intervene for SNC-Lavalin reflects a cynical political judgement that his government depends more on Quebec than Alberta for votes, write Philip Cross and Ian Lee. 

By Philip Cross and Ian Lee, March 15, 2019

Prime Minister Justin Trudeau continues to justify his pressuring of the former attorney general to drop charges against SNC-Lavalin on the grounds that thousands of jobs were at stake. In fact, economic analysis reveals there is no jobs-related reason to intervene on behalf of SNC-Lavalin. The number of jobs potentially at risk is minuscule or non-existent and the company itself says its business is sound. SNC-Lavalin would easily manage a ban on federal projects just as it has flourished despite being banned from World Bank projects since 2013 for corrupt practices. Politics, not economics, is the main motivation for Trudeau and his office to intervene.

It has been widely noted that SNC-Lavalin employs almost 9,000 people across Canada. This represents a miniscule 0.05 per cent of Canada’s total of 18,930,000 jobs. SNC-Lavalin’s job footprint in Canada has fallen from 20,000 in 2013 with no visible economic impact. The threat to move SNC-Lavalin’s headquarters is almost as trivial from a macroeconomic perspective; 700 head-office jobs account for 0.3 per cent of the 228,130 headquarters jobs in Canada, and only 1.6 per cent of Montreal’s total headquarters employment. The reason no one in the federal government has been able to produce a written report on the economic impact of job losses at SNC-Lavalin is because the impact is minimal.

Moreover, very few jobs were ever at risk. Even in the highly unlikely event SNC-Lavalin disappeared overnight, the need for the services it provides would not disappear. SNC-Lavalin does not create the demand for infrastructure projects such as dams, roads and bridges, anymore than Loblaw creates people’s appetite for food. SNC-Lavalin and Loblaw satisfy that demand, they do not create it; if these companies did not exist, others would step in to meet the demand. There are only a handful of companies that can implement infrastructure projects from their design to the actual building; if SNC-Lavalin disappeared, its highly valuable employees would be snapped up by these other firms to do the work in Canada.

SNC-Lavalin itself publicly stated its operations were performing well even after the federal Justice Department announced it would not grant an exemption from prosecution. Every quarter when it releases its financial results, SNC-Lavalin, like every other publicly owned company, must file a Management Discussion and Analysis (MDA) discussing its business conditions and outlook. SNC-Lavalin’s latest MDA was issued just over two weeks ago. Not only did it not mention any existential threat to its operations from federal prosecution, it noted that its business was performing very well, with $10 billion of revenue earned in 50 countries and $15 billion of back orders. If SNC-Lavalin did tell the federal government that a ban on bidding for new federal projects would significantly hamper its operations in Canada, one wonders why no one pointed out it was telling its shareholders a completely different story?

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 Munk Senior Fellow at the Macdonald-Laurier Institute.

Tags: economic policyeconomicsIan LeePhilip CrossSNC Lavalin
Previous Post

Can we afford National Pharmacare and do people want it? Jeffrey Simpson for Inside Policy

Next Post

Structural deficits expose Canada’s economy to risk: Sean Speer for Inside Policy

Related Posts

Canada can help Ukraine in better ways than sending tanks: Richard Shimooka in the Hub
Columns

Canada can help Ukraine in better ways than sending tanks: Richard Shimooka in the Hub

January 27, 2023
Just as Canadians see smartphone bills head down, the cost of watching online content on them may be going up: Peter Menzies in the Financial Post
Columns

Want cheaper cellphone bills? Allow more foreign investment in telecoms: Aaron Wudrick in the National Post

January 27, 2023
Face it, millennials – There is no realistic alternative to capitalism: Philip Cross in the Financial Post
Columns

Face it, millennials – There is no realistic alternative to capitalism: Philip Cross in the Financial Post

January 27, 2023
Next Post
Structural deficits expose Canada’s economy to risk: Sean Speer for Inside Policy

Structural deficits expose Canada’s economy to risk: Sean Speer for Inside Policy

Macdonald-Laurier Institute

323 Chapel Street, Suite #300
Ottawa, Ontario
K1N 7Z2 Canada

613.482.8327

info@macdonaldlaurier.ca
MLI directory

Follow us on

Newsletter Signup

First Name
Last Name
Email Address

Support Us

Support the Macdonald-Laurier Institute to help ensure that Canada is one of the best governed countries in the world. Click below to learn more or become a sponsor.

Support Us

Inside Policy Magazine

  • Current Issue
  • Back Issues
  • Advertising
  • Inside Policy Blog
  • Privacy Policy

© 2021 Macdonald-Laurier Institute. All Rights reserved.

No Result
View All Result
  • Home
  • About
    • Who We Are
    • Who Makes MLI Work
    • Tenth Anniversary
    • Jobs
  • Experts
    • Experts Directory
    • In Memoriam
  • Issues
    • Domestic Policy Program
      • Agriculture and Agri-Food
      • Canada’s Political Tradition
      • Economic policy
      • Energy
      • Health Care
      • Innovation
      • Justice
      • Social issues
      • Telecoms
    • Foreign Policy Program
      • Foreign Affairs
      • National Defence
      • National Security
    • Indigenous Affairs Program
  • Projects
    • COVID and after: A mandate for recovery
    • COVID Misery Index
      • Beyond Lockdown
    • Provincial COVID Misery Index
    • Centre for Advancing Canada’s Interests Abroad
      • Dragon at the Door
      • The Eavesdropping Dragon: Huawei
    • An Intellectual Property Strategy for Canada
    • Speak for Ourselves
    • Canada and the Indo-Pacific Initiative
    • DisInfoWatch.org
    • The Transatlantic Program
    • Indigenous Prosperity at a Crossroads
      • Aboriginal Canada and Natural Resources
    • Talkin’ in the Free World with Mariam Memarsadeghi
    • Past Projects
      • Justice Report Card
      • Munk Senior Fellows
      • A Mandate for Canada
      • Confederation Series
      • Fiscal Reform
      • The Canadian Century project
      • Fixing Canadian health care
      • Internal trade
      • From a mandate for change
      • Size of government in Canada
  • Events
    • Upcoming Events
    • Past Events
      • MLI Dinners
      • Great Canadian Debates
  • Latest News
  • Libraries
    • Inside Policy Magazine
      • Inside Policy Back Issues
      • Inside Policy Blog
    • Papers
    • Columns
    • Books
    • Commentary
    • Straight Talk
    • Video
    • Multimedia
    • Podcasts
    • Leading Economic Indicator
    • Labour Market Report
    • MLI in the Media

© 2021 Macdonald-Laurier Institute. All Rights reserved.

IDEAS CHANGE THE WORLD!Have the latest Canadian thought leadership delivered straight to your inbox.
First Name
Last Name
Email address

No thanks, I’m not interested.