SNC Lavalin offices in downtown Montreal.Mario Beauregard
SNC-Lavalin Group Inc. wants to wipe the slate clean in its home base of Quebec, confirming it will try to strike a deal with the provincial government to repay sums from public contracts won through fraudulent acts stretching back two decades.
Canada's largest engineering firm said Tuesday that it has filed notice with Quebec that it intends to participate in the province's voluntary reimbursement program. The province set up the system last November to help recover money improperly paid by taxpayers as a result of bid-rigging, fraud and other fraudulent tactics in connection with public contracts dating back to 1996.
The program, overseen by former Quebec Superior Court chief justice François Rolland, allows companies to come forward and propose a settlement instead of going through potentially lengthy court fights. Deals will be struck based on work done for municipalities, provincial departments such as Transport Quebec and other public bodies.
SNC now has 30 days to make a formal proposal to the government, after which a negotiation could take place if its proposal is contested.
"We must be able to settle the events of the past in order to turn the page and move forward with confidence," Neil Bruce, SNC's chief executive officer, told a lunchtime audience at Montreal's Board of Trade Tuesday. "We are committed to working with the government of Quebec and the province's public agencies to reach a settlement that is comprehensive, final and fair."
SNC did not disclose what it plans to offer in the settlement and that figure might never come to light given that the process is confidential. Mr. Bruce declined to discuss what SNC believes it did wrong, saying "there's a whole variety of things that are not very clear." The reimbursement program allows the company to resolve outstanding issues related to public contracts in Quebec with one blanket effort, he told reporters.
During testimony to a provincial corruption inquiry in March, 2013, former SNC vice-president Yves Cadotte testified that the company organized a scheme to make thousands of dollars worth of donations to Quebec's two main political parties during the 2000s because not doing so might have represented a business risk. He said the company used a system where some 50 senior managers were asked to make contributions that the company later refunded through bonuses.
Such political donations are illegal under Quebec law but SNC officials have stated that the law was not as clearly defined at the time.
The company also made political donations at the municipal level. Before Montreal's municipal election in 2005, officials with the Union Montréal party approached the company for an unusually high contribution of $200,000, hinting that a big construction spending program was in the works and SNC would benefit, Mr. Cadotte testified. He said he delivered $125,000 in cash to the party's chief fundraiser, who stashed it in a briefcase.
Mr. Cadotte described similar bid-rigging across the river in Longueuil. The city would bundle a number of municipal contracts together once a year and put out tenders, he testified. Then SNC would be given a heads-up that it would win one of those contracts. He said engineering firms that were part of the collusion at the time also included Genivar Inc., now known as WSP Global Inc., and Dessau, whose Canadian engineering operations have since bought by Edmonton-based Stantec Inc.
A spokeswoman for WSP confirmed Tuesday the company has also submitted a proposed settlement to Quebec, adding that it doesn't anticipate it will have an impact on 2016 financial results. Stantec's situation wasn't immediately clear.
SNC believes there are five specific jurisdictions in which it did business where contracts might have had irregularities and its settlement proposal will cover those municipalities, namely Montreal, Laval, Quebec City, Lévis and the village of Saint-Cyprien, said company spokesman Louis-Antoine Paquin. The company is aiming for a single settlement covering all public contracts in Quebec, he said.
Mr. Bruce is trying to push past a corruption scandal at SNC that erupted in 2012 and peaked early last year when federal prosecutors charged the company with fraud and bribery related to its business in Libya. His team is now trying to win a settlement with Ottawa that would avoid a trial on those charges without admitting guilt.
The company is also dealing with the fallout from a deal it struck with the World Bank in 2013 that saw part of the firm and numerous affiliates debarred for 10 years over a conspiracy to pay bribes on the Padma Bridge project in Bangladesh. That penalty could be reduced to eight years if SNC complies with conditions of the deal.
"It's one geography at a time," said analyst Maxim Sytchev at National Bank Financial. "All of these things are ultimately linked. [The Quebec proposal] is just another de-risking event for shareholders."
SNC isn't the only company that wants a settlement. Several companies have approached the administrator of the voluntary reimbursement program seeking deals, said program spokesman Claude Bédard. The only other company to be named publicly is Construction DJL Inc.
"This is certainly a way for these companies to clear their names," Mr. Bédard said.