SNC Scandal Splits Trudeau’s Team and Bruises His Winning Brand
(Bloomberg) -- Core to Justin Trudeau’s rise to power was attracting star candidates with a pledge to do politics differently. Now, two of those top recruits have quit cabinet and the Canadian leader faces his biggest crisis.
His winning 2015 campaign featured a slate of political newcomers against a Conservative opponent who had been in office nearly a decade. But today, amid accusations Trudeau twisted his attorney-general’s arm to help Montreal-based construction firm SNC-Lavalin Group Inc., his slogan of “real change” has given way to more traditional realpolitik, sinking his Liberals in the polls.
“Both the party and prime minister have taken some pretty severe damage,” Greg Lyle of Innovative Research, among the last pollsters who’ve shown the incumbent Liberals ahead of the Conservatives recently, said in an interview. More worrying than the horse-race numbers, Lyle said, is that Trudeau’s personal indicators are falling amid a scandal in which he and his former attorney general “feel that the other has betrayed them.”
It leaves Trudeau just seven months to stop the bleeding and repair his brand before the next election in October. To do so, he’s refocusing on bread-and-butter issues -- job creation, fighting climate change, accepting more immigrants and advocating for the middle class.
All that will have to paper over an explosive crisis and standoff with Jody Wilson-Raybould that triggered an ethics investigation and called into question the sincerity of Trudeau’s “sunny ways” formula.
Of Trudeau’s star new recruits, few held a higher profile than Wilson-Raybould. She’s a former First Nations chief who became a major figure in a government that gleefully trumpeted its commitment to women’s rights, and those of Canada’s indigenous peoples. Trudeau appointed her justice minister and attorney general.
It was Wilson-Raybould’s dream job. One Angus Reid poll found she had cabinet’s third-highest net performance score. The high standing came despite bumps along the road, including several of her proposed laws stalling in parliament, litigation being shifted to the rest of cabinet and the government making little headway under her watch on systemic trial delays that are seeing serious charges thrown out of court.
Nonetheless, she was emblematic of Trudeau’s agenda. The wheels of the current crisis were set in motion when his government changed the law to include deferred prosecution agreements, which would allow criminal charges to be dropped against companies in lieu of a fine. Advocates see it as a way to punish firms without scuttling them; Wilson-Raybould isn’t as keen.
SNC, which the province of Quebec deems a strategic firm that must be protected, faces corruption charges related to its work a decade ago in Moammar Qaddafi’s Libya. If convicted, it faces a potential 10-year ban from government contracts.
“No other country would let this happen to one of its key companies,” John Manley, a deputy prime minister under a previous Liberal government, told BNN Bloomberg last month. Arguing Trudeau’s team should should focus on prosecuting the people responsible rather than the firm as a whole, he added: “I think this is the kind of scandal that can only happen in Canada.”
The current storm erupted over whether to use the newly legislated tool. On Sept. 4, Canada’s independent prosecution service decided SNC wouldn’t be invited to negotiate a DPA to settle the case. Wilson-Raybould had the power to overrule that decision, but by Sept. 16 had decided it would be “inappropriate” to intervene.
Lobbying had begun in earnest to change her mind. SNC, staffed by political heavyweights, repeatedly pressed Trudeau government officials, who in turn raised it with Wilson-Raybould repeatedly over four months. That included a Sept. 17 meeting with the prime minister himself. She says Trudeau reminded her that he represented a district in Quebec -- a statement she claims represented inappropriate political pressure.
While Trudeau has acknowledged he asked Wilson-Raybould to “revisit” her decision on SNC, their stories are at odds from that point on. The government argues what followed was a normal series of meetings, held in absence of any firm order by Wilson-Raybould to back off, while she views it as a sustained pressure campaign to get her to intervene.
The split erupted when Trudeau shuffled his cabinet in January, moving Wilson-Raybould to veterans affairs after she refused a different post. The prime minister says the shuffle was precipitated by another departure; Wilson-Raybould suspects it was because of her role in the SNC affair.
She later left cabinet in protest and was soon joined by Jane Philpott, a Toronto-area doctor and yet another high-profile woman recruited to politics by Trudeau. Philpott, who served as health minister and president of the Treasury Board, had warned Trudeau that Wilson-Raybould would see her move as a demotion.
The two resignations have called into question Trudeau’s pledges of change. Pollsters are uniformly finding the crisis has hurt him, but differ on the extent. Reaction is decidedly different in SNC’s home province, where Quebeckers are more sympathetic. Trudeau, however, has fallen behind the Conservatives in vote-rich Ontario. It’s those two provinces, Canada’s most populous, that will decide the next election.
“They’re really feeling it in Ontario,” said Ipsos pollster Darrell Bricker, who has the Liberals trailing the Conservatives by nine percentage points nationally. “It’s pretty clear they’re on the back foot.”
Trudeau made a point of not apologizing and admitted no wrongdoing, other than regret that things spiraled out of control. The case has evoked all kinds of ghosts in Canadian politics. For some, it’s a sign of back-room sleaziness that long plagued the Liberals. And in the oil-producing west, it’s a sign of government favoring Quebec.
Trudeau appears confident his policies will carry him through the storm. While the economy is slowing, the labor market is strong and unemployment is hovering at lows not seen in 40 years. His government has fast-tracked acceptance of highly skilled workers, while immigration has driven overall population growth to a three-decade high of 1.4 percent, the fastest among Group of Seven nations. Trudeau is also imposing a national carbon tax -- a potentially popular move with his center-left coalition -- while Canada’s child poverty rate has fallen sharply under his watch.
The prime minister is helped by weak opposition. His main rival on the left is slumping, while the Conservatives are fending off a splinter group. Trudeau’s fate will depend on if voters can stomach his interventions on SNC, or whether they grow disenchanted and look for a new wave of so-called real change.
©2019 Bloomberg L.P.