Veterans Affairs Minister Jody Wilson-Raybould with Prime Minister Justin Trudeau in Ottawa on Jan. 14. (Patrick Doyle/Reuters)

The most serious political scandal to hit Prime Minister Justin Trudeau’s government veered into new and potentially damaging territory on Tuesday when the country’s former attorney general and justice minister resigned.

Jody Wilson-Raybould, who was Canada’s first indigenous attorney general, said in a letter that she was resigning “with a heavy heart,” though she did not elaborate on why she was doing so. Last month, she was shuffled out of the Justice Department and into Veterans Affairs, a surprising move that was widely seen as a demotion.

Her resignation comes one day after Canada’s federal ethics watchdog announced that it was launching an investigation into whether Trudeau’s office pressured her to obstruct the criminal proceedings of Quebec-based engineering giant SNC-Lavalin.

The allegations, which were first reported by the Globe and Mail on Feb. 7, have rocked Ottawa, and while Trudeau has described them as “false,” the controversy threatens to become a major political headache for him ahead of federal elections in October.

Andrew Scheer, the leader of the opposition Conservative Party, said the resignation is evidence of “a government in disarray,” adding that the prime minister’s “ethical lapses and his disastrous handling of this latest scandal have thrown his government into chaos.”

Critics say it also raises questions about the Trudeau government’s commitment to the rule of law, which he has touted as China has called on him to release Meng Wanzhou, the chief financial officer of Huawei Technologies, who was detained in Vancouver in December on an extradition request from the United States.

Here’s what you need to know about the allegations.


A woman walks past the SNC-Lavalin Group headquarters in Montreal on Tuesday. (Christinne Muschi/AP)

What is SNC-Lavalin?

Based in Montreal, SNC-Lavalin is one of the world’s largest engineering and construction firms. It has been responsible for infrastructure projects such as the construction of an experimental nuclear fusion reactor in southern France and an airport expansion in St. Martin.

The company employs nearly 9,000 people in Canada, and the provincial government of Quebec — a politically important province for the Liberal Party in a federal election year — recently named it one of 10 “strategic” firms worth preserving.

Why is it in trouble?

The company is no stranger to finding itself in legal jeopardy. In 2013, the World Bank banned it for a decade from bidding on any of its projects after allegations of misconduct surfaced in Bangladesh and Cambodia. Weeks ago, one of its former chief executive officers pleaded guilty to breach of trust in a case involving a Montreal hospital that was one of the largest corruption cases in Canadian history.

The charges at the center of this scandal relate to the company’s business dealings in Libya from 2001 to 2011. The Royal Canadian Mounted Police, or RCMP, alleges that the company offered officials in Moammar Gaddafi’s government nearly 48 million Canadian dollars in bribes and defrauded the Libyan government and other entities of about 130 million Canadian dollars.

SNC-Lavalin claims that the executives responsible for the bribery and corruption have been ousted and that it has implemented tough ethics rules.

Nevertheless, these criminal charges could pose an existential threat to the company. If it is found guilty of the charges, it will be slapped with a 10-year ban on bidding on any federal contracts in Canada.

According to the federal lobbyist registry, the company has had more than 50 meetings with government officials to discuss “justice and law enforcement” issues since the charges were brought. It has also been openly seeking a “deferred prosecution agreement” from prosecutors.

What’s that?

Deferred prosecution agreements allow corporations to avoid criminal convictions in exchange for an admission of wrongdoing, payment of a fine and an established commitment to toughening up ethics and compliance rules. While common in the United States and elsewhere, the Liberal government only introduced them into a budget bill last year.

In October, SNC-Lavalin said that government prosecutors had declined to offer the company such an agreement, which it decried as “fundamentally unfair." It is seeking a judicial review of this decision.

According to the Globe and Mail, this was when members of the prime minister’s office intervened, urging Wilson-Raybould to get federal prosecutors to change their minds. She declined to do so.

What is Wilson-Raybould saying about this?

Not much.

She says that she is unable to comment on the story because she is bound by solicitor-client privilege.

In her resignation letter, she said that she has hired an attorney — a former Canadian Supreme Court justice — and was seeking advice on whether she could “speak on matters that have been in the media over the last week.”

Can’t Trudeau just waive solicitor-client privilege and let Wilson-Raybould clear this up?

Trudeau said that he has asked David Lametti, Wilson-Raybould’s successor in the Justice Department, to look into this. But he warned that waiving solicitor-client privilege could have “unintended consequences” given that various cases involving SNC-Lavalin are still before the courts.

What else is Trudeau saying?

When the story first broke, he said that he did not “direct” Wilson-Raybould to make any particular decision on the case. Asked about whether his office pressured or tried to influence her to intervene, he stuck to the word “direct,” which his political foes described as a “carefully scripted legalistic answer.”

Since then, officials from his government have said that while there were indeed consultations with Wilson-Raybould about the case, they would not have been unusual or unethical given the firm’s importance to Canada. They deny influencing or pressuring her to intervene.

Trudeau recalled in a news conference on Monday that he and Wilson-Raybould spoke last fall about the SNC-Lavalin case but said that he “told her directly” that any decisions on the matter were “hers alone.”

He added that he “welcomed” the ethics investigation and still had “full confidence” in her.

“Her presence in cabinet should speak for itself,” he said.

Hours later, on Monday night, Wilson-Raybould let him know she would be resigning.

What changed?

In a news conference in Winnipeg on Tuesday evening, Trudeau said that Wilson-Raybould’s resignation left him “both surprised and disappointed” and was “not consistent” with conversations they’ve had in recent months.

He added that the “government of Canada did its job and to the clear public standards expected of it” in dealing with the SNC-Lavalin case.

“If anyone felt differently, they had an obligation to raise that with me,” Trudeau said. “No one, including Jody, did that.”

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