When I was in secondary school, there was a school bully who had to have his way. He figured that because he was bigger and stronger than most other kids his age, he should be able to do whatever he felt like. He coerced other kids to do his dirty work and sometimes even his homework. He intimidated students and teachers alike. He thought that because he was "someone special," he was invincible. One day he was kicked out of school for his misdeeds and the terror stopped.
Now to be honest, I don't know a lot about SNC-Lavalin, except for what I have read and heard, and I didn't know a lot about the bully except for what I observed. However, I do know a little about business, government and politics and how they work. And as an outsider looking in, there seems to be some fear that if SNC fails, it will be bad for Canada. We have politicians, bureaucrats and people in la belle province of Quebe, suggesting that any attempt to stop SNC-Lavalin from bidding on government contracts will result in tens of thousands of lost jobs and a damaged economy.
I am here to say that I believe that the failure of SNC-Lavalin would actually be good for the Canadian economy and the Canadian people and there should be no government intervention to stop it from facing the consequences it has bestowed upon itself.
Here is why:
1. SNC-Lavalin has a history of corruption and we cannot tolerate corruption as Canadians. Canada has historically been listed as one of the countries with the lowest corruption levels in the world, yet our toleration for SNC-Lavalin could be changing that rating. Corruption is generally defined as the use of power for personal benefit. Typically, someone is paid money or another benefit in exchange for a favour. This might be as simple as getting your family member a job or on a larger scale, receiving a contract to build a bridge, or hospital, or the capacity to influence government decisions. SNC-Lavalin has faced allegations of corruption in as many as 14 different countries. In 2013, the World Bank banned SNC-Lavalin for 10 years from bidding on World Bank projects. The former SNC-Lavalin CEO Pierre Duhaime was charged with paying $22 million in bribes to win SNC-Lavalin a $1.4 billion bid to build a hospital in Quebec. Just last year, SNC-Lavalin's former vice president Norman Morin pleaded guilty to helping the company funnel $117,000 in illegal campaign funds to the political parties. It's not surprising that Canadian support for the ruling Liberals and their leader Justin Trudeau is fading. With government officials leaving office on a weekly basis, the scent of possible corruption here in Canada in relation to this company is only growing stronger. Yet the government assures us that we need to protect SNC-Lavalin because it's the largest construction and engineering company in Canada.
I don't buy it.
2. For far too long, Canadians have been silent as big business has driven the government agenda. We see it in all sectors of our economy from the steel industry, to agriculture, construction, manufacturing, mining and forestry practices. Most times, we see the influence of multinational corporations who, for their own benefit, push the government to make changes that are often not in the best interest of the individual Canadian. These businesses bully, coerce and threaten governments with the loss of taxes and jobs, in order to obtain competitive advantages, subsidies and tax breaks. Yet when there is no longer much benefit to the company, it quickly cuts ties and moves on. Small business owners miss out on those benefits and are often at the mercy of the multinationals as they supply services to these companies, and are often squeezed on prices to ensure that the giant is profitable. SNC-Lavalin has been one of those giants for too long.
3. No jobs will be lost, only changed. Fear not, O Canada, that the failure of SNC-Lavalin to obtain government contracts will lead to a loss of jobs in Canada. It is true that SNC-Lavalin will be forced to lay off employees if it doesn't get those sweet government contracts because of their wrongdoings. However, those jobs will go elsewhere. In fact, some employees laid off from SNC-Lavalin will likely end up starting their own companies, getting their own sweet contracts and hiring employees of their own. Other competitors of SNC-Lavalin who get the contracts through a fair bidding process will likely need help in building, engineering and constructing those projects. They will gladly hire employees laid off by SNC-Lavalin. We don't need to fear the propaganda of lost jobs, we only need to seek the truth and understand the economics of the situation.
I am not sure where he ended up, but for the teachers and students in the school there was a sense of relief when the bully in the school was expelled. My expectation is that when we come to a decision that we won't tolerate corruption in Canada and dispel any idea that SNC-Lavalin can use political bidding to get its way, Canada too will breathe a sigh of relief. It will be good and healthy for Canada to put the likes of SNC-Lavalin and its culture and history of misdeeds behind us and move on.
Dave Fuller, MBA, is the author of the book Profit Yourself Healthy. dave@profityourselfhealthy.com
