Jane Philpott, a key member of Canadian Prime Minster Justin Trudeau’s cabinet, resigned yesterday afternoon citing concerns over a scandal that has quickly engulfed the ruling Liberal Party government.
Known as the “SNC-Lavalin affair,” Trudeau and other government members are accused of improperly influencing the prosecution of one of Canada’s biggest employers. The prosecution is thought to put at risk thousands of jobs in Québec, including many in Trudeau’s own Montréal-area riding.
Jane Philpott: “I have concluded that I must resign”
In a stinging resignation letter posted on Twitter, Philpott made it clear she was resigning because of the quickly-growing SNC-Lavalin scandal.
Citing a constitutional convention known as “collective cabinet responsibility” (which is a common feature in most Westminster parliamentary systems), Philpott concluded she could no longer support the government’s handling of the crisis.
“I have been considering the events that have shaken the federal government in recent weeks and after serious reflection,” she wrote. “I have concluded that I must resign as a member of Cabinet…
“A minister must be prepared to defend other ministers publicly, and must speak in support of the government and its policies. Given this convention and the current circumstances, it is untenable for me to continue to serve as a Cabinet minister.”
The resignation is a serious blow to Trudeau, whose position as Prime Minister is increasingly weakened just nine months before Canada is due to hold federal elections.
Jane Philpott had been a member of Trudeau’s Liberal Party government since it was first elected in 2015. After initially serving as Health Minister, and Minister of Indigenous Services, she was appointed as President of the Treasury Board (a Cabinet level position in Canada), only six weeks ago.
What is the SNC-Lavalin affair?
SNC-Lavalin is one of Canada’s biggest companies, with nearly C$10 billion in annual revenues and over 50,000 employees spread across 60 countries.
The engineering, procurement, and construction firm has faced a series of legal problems in the last twenty-five years, but the recent controversy mostly pertains to alleged use of bribery to obtain overseas contracts in the early years of this decade. An alleged use of bribery in Libya remains an open case against the company, and is being pursued by federal prosecutors.
Executives from that period have now left the company. To avoid having innocent employees of SNC-Lavalin punished for the actions of past executives, the company lobbied intensely for Canada to enact a Deferred Prosecution Agreement (DPA) system as exists in the United States and other countries. This would allow SNC-Lavalin to pay a fine and avoid corporate criminal charges.
Canada did create its own DPA system, but federal prosecutors did not extend the option to SNC-Lavalin. Much to their consternation, prosecutors have continued to prepare for prosecution against the construction giant. SNC-Lavalin protested the decision, broadly hinting that it could relocate to another country if the prosecution proceeded.
If SNC-Lavalin turned its back on Canada, ministers fear it could be devastating to the national economy in general, and the economy of the company’s home province of Quebec in particular.
Justin Trudeau himself also faces direct political repercussions if SNC-Lavalin moved offshore. He is the MP for the Montréal-area district of Papineau – home to thousands of SNC-Lavalin employees.
Before Jane Philpott, Jody Wilson-Raybould resigns
Things began to get particularly tricky for Trudeau when another cabinet minister, Jody Wilson-Raybold, resigned as Minister of Veterans Affairs on February 12th. Previously, Wilson-Raybold had served in the dual role of Justice Minister and Attorney General, and by extension overseen the prosecution of SNC-Lavalin.
Days before her resignation, the Globe & Mail newspaper had alleged that the Prime Minister’s office had pressured Wilson-Raybold to abandon the prosecution against SNC-Lavalin.
After initially refusing to comment on the growing scandal, citing client-attorney privilege, Wilson-Raybold appeared before Parliament’s Justice Committee to testify last Wednesday.
Her testimony has widely been judged as devastating for the Prime Minister.
“I experienced a consistent and sustained effort by many people within the government to seek to politically interfere in the exercise of prosecutorial discretion in my role as the attorney general of Canada,” she told the committee.
“Within these conversations, there were express statements regarding the necessity for interference in the SNC-Lavalin matter, the potential for consequences, and veiled threats if a DPA was not made available to SNC [-Lavalin].”
Can Justin Trudeau survive?
Allegations of political interference in a criminal investigation are particularly awkward for Prime Minister Justin Trudeau. For months he has been arguing to Chinese officials that Canada is a country where the rule of law is paramount, and that he therefore cannot politically intervene in the extradition case of jailed Huawei CFO Meng Wanzhou.
The resignation of Jane Philpott is also a serious blow to any attempt to contain the SNC-Lavalin scandal. By staking out a moral case for leaving the cabinet, Philpott is forcing other ministers to choose sides. With a national election due in October, and Trudeau looking weaker by the day, they could eventually conclude the Liberal Party needs a new leader for the next electoral cycle.
A year ago, Trudeau’s biggest scandal was over his wardrobe choices and guest lists during a state visit to India. He may now look back fondly on a much simpler time.