SNC-Lavalin is a global engineering and construction firm based in Montreal, Quebec. It works in several industries including oil and gas, mining, cybersecurity and nuclear power. It also builds public and private infrastructure around the world.
The company began in 1911 as an engineering consultant for power projects. In 1991, the original company, called SNC, merged with competitor Lavalin to become SNC-Lavalin. Today it employs some 50,000 people in more than 50 countries. In 2018, it registered $10.1 billion in revenue.
In Canada, the company has received contracts to build major transit projects in cities including Toronto, Montreal and Vancouver. Worldwide, SNC-Lavalin oversees resource-extraction and infrastructure projects in North America, the Asia-Pacific region, Europe and the Middle East.
Acquisition: When one company takes over the ownership or control of another.
Attorney general: A second and separate role played by the minister of Justice, who is a member of federal Cabinet. The attorney general oversees claims and lawsuits in court on behalf of the Crown. He or she also gives legal advice to the government and its departments and agencies.
Bribery: The act of giving someone money or other rewards in order to influence their decisions. Bribes are usually given in exchange for an illegal or dishonest act.
Consortium: A partnership of several large companies in a business venture.
Consulting: Giving professional or expert advice in a particular field.
Corruption: Dishonest or illegal practices, especially bribery or fraud by people in positions of power.
Director of public prosecutions (DPP): Appointed by the federal government, the DPP is a lawyer who supports the work of the attorney general of Canada. This person manages the Public Prosecution Service of Canada, an independent power that prosecutes federal offences (i.e., tries them in court).
Fraud: Tricking someone to gain money or other benefits. Fraud is illegal.
Hydroelectric power: Electricity created using water power, especially by damming rivers to spin turbines and power generators.
Revenue: The total amount of money a company receives during a specific period.
History of SNC
In 1911, 32-year-old Arthur Surveyer opened a consulting company in Montreal, after having worked for seven years at the federal Department of Public Works. His company’s first major contract was to plan and supervise the construction of a hydroelectric power station near Grand-Mère, Quebec.
During the next 10 years, the company grew steadily through a series of major infrastructure-related consulting contracts. In the early 1920s, Surveyer hired Emil Nenniger, a Swiss architect and self-trained engineer. He also hired Georges Chênevert, an engineering graduate from Polytechnique Montreal. By 1937, the two men had become so important to Surveyer’s business that he made them partners in his firm.
In 1959, the company, called Surveyer, Nenniger & Chênevert — later shortened to SNC — received the contract to help plan and supervise the building of the Daniel-Johnson Dam. Located on the Manicouagan River, in Quebec’s Côte-Nord region, the dam retains the water of one of the world’s largest hydroelectric reservoirs (see Réservoir Manicougan). This project earned the company global recognition. It began drawing customers worldwide.
The company’s first major project outside Canada was building India’s Cheruthoni Dam in the Idukki District of Kerala, completed in 1973. SNC would go on to build other major hydro projects around the world. Some of the its major construction work in the 1970s and 1980s included a major foundry in Algeria and that country’s iconic Martyrs’ Memorial concrete monument. SNC also won the contract to build a big energy grid in Saudi Arabia that powers the entire Qassim administrative region.
History of Lavalin
In 1936, Jean-Paul Lalonde and Roméo Valois opened an engineering consulting company called Lalonde & Valois The firm took advantage of the Quebec government’s plan to renovate its public infrastructure. It was quickly hired to supervise and help plan the construction of Highway 11 north of Montreal.
During the Second World War, the company lost many of its employees to the war economy (e.g., arms factories and the industries that supplied them with raw materials). By the 1950s, however, things turned around. In the postwar baby boom, Lalonde & Valois received many contracts to build schools and hospitals. In the late 1950s and the 1960s, the firm won many of Quebec’s bridge and road contracts, starting with the project to raise the Honoré Mercier Bridge and double its lanes.
In 1963, the company’s two original founders, Lalonde and Valois, transferred control to Bernard Lamarre and Valois’s son, Jean-Pierre. Montreal was the site of some of its major projects in the 1960s under the new management. These included the Louis-Hippolyte-La Fontaine Bridge-Tunnel and the Ville-Marie Expressway under downtown Montreal. The city’s Olympic Park complex followed in the 1970s (see also The Montreal Olympics).
In 1967, Lamarre created the firm Lamarre Valois International (Lavalin) to win contracts outside the country. During this period, he oversaw the 430 km Canadian Unity and Friendship Highway in Niger. In the 1970s, Lavalin received one of its biggest and most ambitious contracts, the James Bay hydroelectric network, with US engineering firm Bechtel.
1991 Merger: SNC-Lavalin
By 1990, Lavalin had a large debt from the aggressive expansion it had begun in the 1970s. This pushed it to negotiate with SNC for an eventual fusion. After months of speculation and rumours, the two companies announced a merger in August 1991.
SNC-Lavalin immediately became one of the biggest engineering firms in the world. With more than $600 million in assets, it had some 7,000 employees working out of 16 offices in Canada and 14 bureaus abroad. The company soon began to win major engineering contracts worldwide. These included work on an aluminum plant in South Africa and the contract to build the metro system in Turkey’s capital, Ankara. Other major work in the 1990s included a train line in Kuala Lumpur, Malaysia.
In 1995, the company made more than $1 billion in revenue for the first time. It was also during this time that SNC-Lavalin began to collect more than half of its revenues from projects outside Canada. Company president Guy Saint-Pierre retired at the end of 1995. Bernard Lamarre’s younger brother, Jacques, replaced him.
During the Jacques Lamarre era, SNC-Lavalin made major acquisitions. In 1996, it bought Pingat Engineering, a French company specializing in agricultural production. That same year, it bought Toronto-based Kilborn, a major mining firm. During this time, the company was also hired to work on Libya’s Great Man-Made River. This project is a network of underground pipes that carry water from aquifers underneath the Sahara Desert to the populated coast of Libya.
A major acquisition of the firm before the new millennium was a 23 per cent stake in the 407 Electronic Toll Road (ETR). This 108 km toll road crosses the Greater Toronto Area, connecting Burlington to Pickering. SNC-Lavalin decided to sell about 10 per cent of its stake in the toll road in 2019 to pay down debt.
Major projects during the first decade of the 2000s included the Canada Line of Vancouver’s SkyTrain, a bridge in Kelowna, and nickel mines in Labrador and the French territory of New Caledonia. The company also won a contract in 2006 to build the Ambatovy nickel mine in Madagascar. Other projects of this era included building Camp Julien for the Canadian Forces in Afghanistan (see War in Afghanistan) and major energy projects in Saudi Arabia.
In 2009, Pierre Duhaime replaced Jacques Lamarre as president and CEO of the company.
Swiss police began investigating SNC-Lavalin vice-president Riadh Ben Aïssa in May 2011. The probe focused on payments from the company to Swiss bank accounts. The police suspected Ben Aïssa had been involved in bribing politicians in North Africa for infrastructure contracts between 2001 and 2011. Swiss authorities contacted the RCMP, which began its own investigation into SNC-Lavalin and several of the company’s employees.
The RCMP suspected the company had paid off associates of Libyan dictator Muammar Gaddafi for large government contracts. Ben Aïssa quit the company in February 2012. One month later, CEO Pierre Duhaime resigned unexpectedly after an internal investigation into payments of about $56 million to unknown business agents. The RCMP raided the global headquarters of SNC-Lavalin in Montreal in April 2012 at the request of Swiss police. In February 2014, the RCMP charged two former SNC-Lavalin vice-presidents, Sami Bebawi and Stéphane Roy, with several criminal counts (see also White-Collar Crime). Both men were charged with fraud over $5,000 and bribing a foreign official in Libya. The events had allegedly occurred between 2010 and 2013.
In October 2014, Ben Aïssa settled his charges with Swiss police. Pleading guilty to money laundering, fraud and bribery, he returned $47 million. About a third of this went to SNC-Lavalin, which the court recognized as an “injured party.” He also received a three-year jail sentence. However, Ben Aïssa was released soon after the ruling because he had been held in Switzerland since his arrest in 2012. He returned to Canada in October 2014 to face charges in the Montreal superhospital affair.
In February 2015, the RCMP formally charged SNC-Lavalin with corruption. They alleged the company gave Libyan officials $47.7 million worth of bribes. The company was also charged with fraud. These charges concerned about $130 million worth of construction contracts in Libya, including the Great Man-Made River project.
In February 2019, the Court of Québec threw out charges against Roy due to unreasonable delays in his trial. He was set free. Bebawi tried to get his charges thrown out for the same reason, but a judge refused his request. Bebawi is awaiting trial for his alleged crimes.
(See also One Dirty Hand Washes the Other.)
Jody Wilson-Raybould Affair
The Liberal government of Justin Trudeau added the option of remediation agreements to the Criminal Code in its 2018 spring budget. These agreements apply to companies charged with crimes. If the director of public prosecutions (DPP) allows a company to reach a remediation agreement, the company can avoid a criminal conviction by paying a fine and taking other actions. SNC-Lavalin had lobbied the Liberals to make this change to the Criminal Code. The DPP refused, however, to give SNC-Lavalin a remediation agreement for the Libya affair charges. This paved the way for the company to stand trial.
In February 2019, Jody Wilson-Raybould resigned from the Liberal Cabinet. She said that when she was attorney general of Canada, she faced improper pressure from the Prime Minister’s Office to reverse the decision of the DPP and grant SNC-Lavalin a remediation agreement. Wilson-Raybould accused the government of politically interfering in the Canadian justice system, which is supposed to be independent.
Jody Wilson-Raybould was elected the Liberal MP for Vancouver Granville in 2015. Photo taken on 30 January 2014.
The scandal led to the resignation of another major Cabinet minister, Jane Philpott, who was the president of the Treasury Board when she stepped down. Gerald Butts, the principal secretary to the Prime Minister, also resigned during this period.
Montreal Superhospital Affair
In 2010, a consortium led by SNC-Lavalin won the contract for the McGill University Health Centre (MUHC) for about $1.3 billion. The “superhospital” and research centre would be built just west of downtown, in the heart of Montreal’s English-speaking community. CEO Pierre Duhaime was arrested in 2012 and charged for alleged fraud tied to the hospital contract. Eight others received similar charges.
Quebec’s anti-corruption unit alleged SNC-Lavalin employees gave a total of $22.5 million in bribes to a company run by two MUHC employees, Arthur Porter and Yanai Elbaz. In December 2018, Elbaz received 39 months in jail for his role in the scandal. He admitted to taking $10 million in bribes from SNC-Lavalin in exchange for information that helped it win the contract against rival bidders. Arthur Porter died in jail in Panama while fighting his extradition to Canada. In July 2018, Riadh Ben Aïssa pled guilty to using a fake document to help transfer money to Porter. He received a 51-month jail sentence. Duhaime pled guilty in February 2019 to helping a public servant commit a breach of trust. He was sentenced to 20 months’ house arrest.
Did you know?
In 2011, Quebec launched the Charbonneau Commission, an inquiry into corruption in the province’s construction industry. One witness, detective Jean-Frédérick Gagnon, testified that the MUHC bribery case was “the biggest fraud and corruption investigation in Canadian history.”
SNC-Lavalin Today and in the Future
SNC-Lavalin is awaiting trial for its alleged role in bribing Libyan officials for major construction projects. In March 2019, the Federal Court rejected the company’s attempt to reverse the public prosecutor’s decision to go to trial instead of offering a remediation agreement. The company challenged that decision in federal appeals court in April 2019. SNC-Lavalin’s first court hearing ended that same month. In May, a Quebec Court judge ruled that there is enough evidence in the case for a formal trial. (See also Court System of Canada.)
Despite its current legal troubles, SNC-Lavalin continues to be a world-class engineering company with projects across the planet. It is currently building the $6.3 billion light rail transit system in the Montreal area, the Réseau express métropolitain.