Bruce McMeekin Law

Offering SNC-Lavalin A Remediation Agreement May Be Unlawful, But Not For The Reason You May Think

As the debate continues about the propriety, and, possibly, legality of the alleged encroachment on Crown discretion (as exercised by the Director of Public Prosecutions), by some federal cabinet members and their staffs, it is evident that Remediation Agreements (“RAs”) are poorly understood. One reason for that may be the manner by which RAs were rolled out by the government. Many Canadians appear uninformed about the need for RAs, what they were intended to accomplish and how they are intended to work. In addition, given the content of the current debate, including most recently the March 6 testimony of Gerry Butts before the House of Commons’ Justice Committee, we should be concerned that some senior government members and their staffs do not understand when RAs are available or, worse, simply care not to understand.

RAs were enacted as amendments to the Criminal Code in 2018. They were intended to provide relief to qualifying organizations from the prejudicial stigma and business effects arising from conviction for a variety of financial crimes. The primary reason for their introduction was to shield defendant organizations from the automatic 10 year prohibition preventing convicted organizations from bidding on federal contracts, as required by the Integrity Regime. In that sense, the policy objective was to protect employees, suppliers, shareholders and pensions, and, by extension, our economy at large.

RAs are not intended to be a mere slap on the wrist of corporate criminals. Correct; under an RA, no criminal conviction is registered against the offending organization. But, it still faces substantial punishment. Mandatory requirements of RAs include exposure to financial penalties unlimited by statutory maximums, restitution, and forfeiture of property or other benefits obtained by the commission of the offence. An optional requirement is to order the organization to implement anti-financial crime policies and procedures, and the organization submitting to an independent monitor to track its progress. The process is intended to be transparent, presented and enforced through the courts.

Consistent with the reason for their enactment into law, RAs are not available to individual defendants. The Crown’s decision to invite an employer-defendant to proceed by way of an RA does not preclude the Crown from prosecuting any of its implicated directors, officers and employees.

Misconceptions about RAs may be rooted in the manner by which by which they were introduced into Parliament. In the fall of 2017, the government invited written public comment as to the merits and content of RAs. But when the draft RA amendments were tabled in the House of Commons in February 2018, they were part of omnibus Bill C-74, intended to bring into effect the government’s budget. As a result, they were never subjected to the level of attention and review, including that by the Justice Committee, one might reasonably expect when legislation is introduced to substantially amend the Criminal Code. In the result, Parliament’s opportunities to examine and debate both the content and need for RAs were limited.

In response to process-based complaints, the government’s explanation was a head-scratcher, claiming that corporate wrongdoing and the economic climate of the country are intertwined. But if there had been a separate bill for RAs, their study may have been more complete, obviating, perhaps, the need for the external legal opinion Mr. Butts testified he thought was necessary to assist Ms. Wilson-Raybould.

Whether due to the limited Parliamentary review, or simply political considerations, it is concerning that few in government seem or care to understand when RAs are available to organizations. Before extending an invitation to an organization to enter into an RA, the Crown is required to consider and balance a number of factors, including the nature and gravity of the offences, how the offences came to the attention of the police and whether there are other outstanding alleged offences. But in the situation where the organization is facing charges under the Corruption of Foreign Public Officials Act, as is the case with SNC-Lavalin, the amendments specifically instruct the Crown to consider neither the national economic interest nor the identity of the organization.

Absent a meaningful Parliamentary review of the draft RA amendments, it is unclear how this instruction, so seemingly inconsistent with the rationale for RAs, was enacted. For SNC-Lavalin, it is a knock out blow. It is undoubtedly true, as Mr. Butts stated before the Justice Committee, that the loss of 9000 jobs is a public policy problem.  But, it is a public policy problem that cannot be fixed by the law. If the newly appointed Attorney-General overrules the Crown, as he has said remains an option, and directs it to offer an RA to SNC-Lavalin on the basis that the Canadian economy needs to be protected, it will be more than merely inappropriate, but unlawful.