Case Study: The SNC-Lavalin Affair, 2019

On February 7, 2019, the Globe and Mail ran a front-page story asserting that unnamed sources from within the Trudeau government had confirmed that former attorney general and minister of justice Jody Wilson-Raybould had been subjected to inappropriate pressure by senior officials close to the prime minister seeking to have the attorney general alter a prosecutorial decision respecting the Quebec-based engineering firm SNC-Lavalin. And so began a chain of events that would shake the Liberal government to its core, witness the resignation of two cabinet ministers and their eventual expulsion from the Liberal caucus, the resignations of the principal secretary to the prime minister, and the clerk of the Privy Council, and sow seeds of doubt in the minds of many Canadians over Justin Trudeau’s leadership competency.

The story begins back in 2015 when the RCMP brought Criminal Code charges of corruption, fraud and bribery against SNC-Lavalin respecting business deals with the Libyan government of Muammar Gaddafi. If convicted, the company, employing some 9,000 persons across Canada could lose its ability to bid on federal contracts for 10 years, a crippling blow.

In March 2018 the Trudeau government amended the Criminal Code to allow for “deferred prosecution agreements (DPA),” a form of plea bargain where a company facing corruption charges could have those charges stayed by agreeing to make reparations, pay fines, dismiss wrong-doers, and change corporate decision making. The logic here was that such DPAs would protect the interests of the company’s workers, customers, pensioners, and others who had never been involved in the wrongdoing of a few senior officials but who would be harmed if the company was forced to retrench, lay-off workers, or worse.

On September 4, 2018, the director of the Public Prosecution Service notified SNC-Lavalin that its application for a DPA had been rejected and that it would be facing a criminal trial.

On September 17, 2018, Prime Minister Trudeau met with Ms. Wilson-Raybould, then attorney general, to discuss the SNC-Lavalin issue. As attorney general, Wilson-Raybould had the authority to overrule the prosecution service, ordering them to enter into a DPA with the company on public interest grounds. At this meeting the prime minister spoke of the importance of SNC-Lavalin to the Canadian economy. The attorney general defended the decision of the prosecution service and the prime minister assured her that the decision to offer a DPA or not was hers alone.

Throughout the fall of 2018 senior officials in the PMO and the PCO, including Gerry Butts, the principal secretary to the prime minister and Michael Wernick, the clerk of the Privy Council, and the minister of finance continued to communicate with Ms. Wilson-Raybould and members of her office, seeking to have her reconsider her decision respecting a DPA for SNC-Lavalin. By mid-December, the attorney general was firmly telling senior officials including Butts and Wernick to stop challenging her and her staff on the issue and that her decision to not overturn the decision of the prosecution service was final. She also secretly recorded a phone conversation with Wernick to this effect.

On January 14, 2019, Prime Minister Trudeau shuffled his cabinet. Ms. Wilson-Raybould was moved from Justice to Veterans Affairs, widely seen as a demotion, and David Lametti, a former law professor, became the new minister of justice and attorney general. He now possessed the discretionary power to decide on a DPA for SNC-Lavalin.

Then came the February 7 story in the Globe and Mail. The prime minister quickly stated that the Globe story was inaccurate and that Ms. Wilson-Raybould had never been directed to change her mind on the DPA issue. The prime minister went so far as to say that her continued presence in his cabinet demonstrated that nothing improper had occurred.

On February 12, Ms. Wilson-Raybould resigned from cabinet, stressing that her truth would be told and on February 13 the House of Commons Justice Committee began holding hearings into whether inappropriate pressure had been placed on the former attorney general.

On February 18, Butts resigned, so as to be free to defend himself before the Justice Committee.

In a series of meetings of the Justice Committee in February and March of 2019, all the senior players in this saga had their say. Ms. Wilson-Raybould asserted that the prime minister, Butts, Wernick, and others had all placed inappropriate pressure on her and members of her staff, with this pressure serving to violate the principle of prosecutorial independence.

Butts and Wernick defended their actions stressing that they never challenged the attorney general’s authority to decide on a DPA and that their interventions were fully appropriate representations to her respecting the public policy issues surrounding the future of SNC-Lavalin. The attorney general faced pressure but it was appropriate pressure, befitting the types of issues ministers must address.

As the Committee hearings continued they became highly partisan. Liberal members on the committee had the majority and they defended the narrative of the prime minister and his aides. Opposition members held up Ms. Wilson-Raybould as a defender of public virtue while castigating Trudeau, Butts, and Wernick as devious, backroom manipulators seeking to undermine the justice system so as to give a deal to a shady company that had long contributed to the Liberal Party. So much, the opposition argument went, for Justin Trudeau’s lofty assertions that he would govern differently and better than governments in the past, and that his government would be open and transparent. Also, his opponents noted, so much for Trudeau valuing and supporting women and Indigenous voices within his cabinet.

And the story continued. On March 4, Jane Philpott, President of the Treasury Board and a personal friend of Wilson-Raybould resigned from cabinet in solidarity with her friend, claiming she could no longer support the type of leadership demonstrated by the prime minister. Next came the resignation of Michael Wernick on March 18, with the clerk stating that since the opposition parties had lost trust in his impartiality, he could no longer effectively function as clerk of the Privy Council and head of the Public Service. Finally, on April 2, 2019, both Ms. Wilson-Raybould and Ms. Philpott were expelled from the Liberal caucus on the grounds that they no longer had the trust of the prime minister and the Liberal Party.

The long, tangled tale had run its course. Two women who had once been considered rising stars within the federal Liberal Party were now sitting as independents. Michael Wernick and Gerry Butts were gone. And Prime Minister Trudeau had taken major blows to his credibility, his leadership, and his image of a man who was different and better than most other leaders. As this scandal went on the Liberal Party began to sag in public opinion polls, with Trudeau coming to be seen by many Canadians as a weak leader, a liability more so than an asset to the Liberal Party and the country.

In the federal election held in the fall of 2019 the Liberals were re-elected but only to a minority government. The Trudeau rose had clearly gone off the bloom and this remains the case as of 2022 following yet another minority government result in the election of 2021. How much longer will the federal Liberals be content with Justin Trudeau as their leader? Will they, should they, want him to lead their party into the next federal election?

Sources: CBC, “What You Need to Know about the SNC-Lavalin Affair,” 2019, https://www.cbc.ca/news/politics/trudeau-wilson-raybould-attornegeneral-snc-lavalin-1.5014271.
GlobalNews, “Timeline: Here’s How the SNC-Lavalin Controversy Has Unfolded,” https://globalnews.ca/news/5005123/timeline-snc-lavalin-contyroversy/.

Department of Finance Organizational Structure, 2022: https://www.canada.gc.ca/en/department-finance/corporate/organizational-structure.html.

Dispatch Box: A Classic Public Service Career Path to the Top

Case Study: “I don’t support what you’re doing”: What Happens When a Senior Executive Disagrees with Government Policy?

Case Study: The Harper Cabinet, 2011

Dispatch Box: Getting to the Centre of Power in Ottawa

Dispatch Box: The Secretariats of the Privy Council Office

Dispatch Box: The Workload of Deputy Ministers

White Paper: The Departmentalized Cabinet System

White Paper: The Institutionalized Cabinet System

Dispatch: The Politics of the Minister–Deputy Minister Relationship

Dispatch Box: Harper Cabinet System, 2011-2015

White Paper: Assessing the Harper Government

White Paper: The Chrétien Command Mode

1. Describe how deputy ministers are appointed and what their duties are.

Note that deputy ministers are appointed by the prime minister on the advice of the Clerk of the Privy Council, not the department minister. Explain their key duties and responsibilities as follows:

Administrative

• responsible to the prime minister for the operation of the department
• administrative head and chief manager of the department in relation to all routine matters
• financial manager in relation to budget matters
• overseer of departmental legal obligations

Policy

• chief policy advisor to the minister on new initiatives
• responsible for developing new policies and programs for the department
• responsible for the implementation of existing departmental policies and programs

Communication

• chief communicator for the department in relation to all administrative matters
• liaison with other departments and agencies in relation to policy and program development
• rapport with clerk of the Privy Council in relation to policy and senior administrative matters

Personnel

• provision of leadership, motivation, and strategic direction to departmental staff and management
• oversight of personnel management, training, and development to department managers and staff

2. What is the difference between a departmentalized and an institutionalized cabinet system?

Discuss the key features of the departmentalized cabinet system by covering the following points:

• Analyze departmental autonomy in relation to limited central coordination of government-wide policy.
• Explain the limited role of central agencies and the few institutionalized cabinet committees in this system.
• Explain the leading role for the prime minister in policy direction.
• Assess the influence of deputy ministers over departmental work and the possibility of strong ministerial leadership in departments under certain conditions.
• Explain the probability of weak ministerial leadership when inexperienced ministers face highly experienced deputy ministers.
• Describe the relatively straightforward, department-led process of policy development.

Discuss the key features of the institutionalized cabinet system by covering the following points:

• Describe how and why departments are organized into functional cabinet committees.
• Explain that department policy and program initiatives must be vetted and approved by relevant cabinet committee.
• Explain how and why all committee decisions must be vetted and approved by P&P (Priorities and Planning/Policies and Priorities) committee.
• Note that all cabinet committees are supported by specialized central agencies: the PMO, PCO, Finance, and TBS.
• Explain the central coordination of government-wide policy in relation to the role of central agencies and cabinet committees.
• Comment on the great centralization of power in P&P in relation to the relatively diminished role and power of individual deputy ministers.
• Highlight the more complicated and time-consuming process of policy development in the institutionalized system and the much greater chance of interdepartmental infighting on priority setting and policy development.
• Explain the much greater chance of infighting between central agencies in the institutionalized system.

3. What is the purpose of a cabinet committee? Briefly trace the cabinet decision-making process in an institutionalized system.

The purpose of a cabinet committee is revealed through discussion that encompasses the following:

• Assess the role of functional cabinet committees, as distinct from P&P, and how they link ministers of departments with shared policy and program interests.
• Describe how committee members make collective decisions about policy and program initiatives advanced by member departments.
• Explain how and why committee recommendations are to conform to and support broad policy initiatives set by P&P.
• Assess how P&P vets and approves all policy and program recommendations from the various committees.

The decision-making process takes the following path:

1. A department initiates a policy or program proposal.
2. The department produces a Memorandum to Cabinet (MC).
3. The MC goes to the PCO for assessment and comment.
4. The MC, with PCO commentary, goes to the relevant cabinet committee.
5. The committee assesses the MC.
6. PMO, PCO, TBS, and Finance assess the MC.
7. The committee receives the assessments and makes a decision.
8. If the MC is rejected, it reverts to the department.
9. If the MC is accepted, it moves to P&P.
10. P&P addresses the MC and all relevant central agency reports and makes a decision.
11. If the MC is rejected, it reverts to the relevant cabinet committee.
12. If the MC is accepted, it is ratified by the full cabinet and becomes official policy.
13. The relevant department is given authority to implement the policy or program.

Note that the process described here is more detailed than that found in Figure 4.6 in the text.

4. Outline the ways in which a strategic prime ministership can be put into practice.

Your response should do the following:

• Describe how and why the prime minister selects just three to five policy matters as the most important issues facing the government and the country.
• Explain why it is highly likely that the prime minister will base the next election campaign on these three to five issues, providing that the strategic agenda has proven a success.
• Examine how and why all other policy and program matters are relegated to ordinary departments and cabinet committees.
• Explain that the three to five strategic matters are subject to explicit prime ministerial authority.
• Explain how and why the prime minister is assisted by relevant departments, ministers, P&P, and officials in PMO, PCO, TBS, and Finance.
• Explain why the ordinary rules of the cabinet decision-making system do not necessarily apply to the prime minister’s strategic agenda. Decisions are made quickly, and the prime minister expects full support from cabinet colleagues, senior officials, caucus members, and the public service.

5. Identify the primary areas of responsibility for the Department of Finance.

Your response should include:

• financial management in relation to general departmental activities;
• development of annual budget for the government;
• budget coordination with departments on routine management; and
• advice to the prime minister and cabinet about
• national economic policy,
• national tax policy,
• international trade,
• CUSMA in relation to the United States and Mexico,
• deficit management, and
• national debt repayment.

6. Compare the Harper Command Mode and the Justin Trudeau Command Mode.

Your response should include, but not be limited to, the following:

• Harper
• Using leadership to get things done
• Harper’s strategic priorities
• Assessing the legacy
• Top-down method of command and control
• Trudeau
• Trudeau cabinet system
• Agenda and Results Committee
• Participatory management style

1. A minister’s authority in the departmentalized system was

• a. always de jure, never de facto
• b. always de facto, never de jure
• c. always de jure but potentially not de facto
• d. always de facto but potentially not de jure

2. Which of the following does the Prime Minister’s Office provide?

• a. policy advice
• b. scheduling advice
• c. partisan advice
• d. all of the above

3. Which of the following is not a responsibility of the clerk of the Privy Council?

• a. deputy minister to the prime minister
• b. secretary to the cabinet
• c. minister responsible for support departments
• d. head of the federal public service

4. What can’t a minister do?

• a. complain to the prime minister about the department
• b. propose a new policy direction for the department
• c. appoint the deputy minister for the department
• d. resign as minister without the approval of the prime minister

5. To whom is a deputy minister officially responsible?

• a. the minister
• b. the Clerk of the Privy Council
• c. the prime minister
• d. all of the above

6. Who are the members of cabinet committees?

• a. ministers alone
• b. ministers and members of the government caucus
• c. ministers and staff of Privy Council Office
• d. ministers and staff of Prime Minister’s Office

7. What does the Privy Council Office not provide?

• a. logistical support to the cabinet
• b. partisan political advice to the prime minister
• c. executive leadership to the federal public service
• d. assessment of federal–provincial relations to cabinet

8. Which of the following is a responsibility of the Treasury Board Secretariat?

• a. human resources support to departments
• b. financial management support to departments
• c. official employer of the public service
• d. all of the above

9. Which of the following are beyond a prime minister’s official control?

• a. deputy ministers
• b. federal judges
• c. Canadian ambassadors and heads of Crown corporations
• d. cabinet appointees

10. In the command mode of governance, power is concentrated in the hands of

• a. P&P and cabinet committees
• b. the prime minister and the governor general
• c. the prime minister and select advisors
• d. the prime minister and the Privy Council

Chapter 4 Answer Key

• 1. c
• 2. d
• 3. c
• 4. c
• 5. c
• 6. a
• 7. b
• 8. d
• 9. b
• 10. c

Figure 4.1 from Thinking Government 5e— The Prime Minister and the Bureaucratic Hierarchy

Figure 4.2 from Thinking Government 5e— Departmental Hierarchy

Figure 4.3 from Thinking Government 5e— Institutionalized Cabinet System, 1986

Figure 4.4 from from Thinking Government 5e— Senior Officials in the PMO

Figure 4.5 from Thinking Government 5e— Institutionalized Cabinet Relationship Mesh

Figure 4.6 from Thinking Government 5e— Memorandum to Cabinet (MC) Flow Chart

Figure 4.7 from Thinking Government 5e— Trudeau Cabinet System, 2022

assistant deputy minister
One of the most senior executive officials responsible for providing administrative leadership of a department, such as ADM Finance or ADM Human Resources. Assistant deputy ministers are ranked below associate deputy ministers (also referred to as ADMs) and are usually responsible for a particular functional portfolio within the department. See also portfolio.

associate deputy minister
One of the most senior executive officials responsible for providing administrative leadership of a department. Associate deputy ministers rank immediately below the deputy minister, to whom they are responsible for providing system-wide support and assistance.

cabinet committee
One of the functional groups into which a prime minister will divide cabinet ministers to assist in the conduct and development of policy and program decision making. As of September 2016, the Trudeau cabinet included 11 full cabinet committees: Agenda; Results and Communications; Treasury Board; Open Transparent Government and Parliament; Growing the Middle Class; Diversity and Inclusion; Canada in the World and Public Security; Canada-United States Relations; Intelligence and Emergency Management; Environment, Climate Change and Energy; Defence Procurement; and Litigation Management. See also cabinet.

central agency
A specialized support agency that provides expert policy advice and program assistance to the cabinet and prime minister in an institutionalized cabinet system. The key central agencies of the Canadian government are the Prime Minister’s Office, the Privy Council Office, the Department of Finance, and the Treasury Board of Canada Secretariat. See also institutionalized cabinet system.

Clerk of the Privy Council
The highest ranking public servant in the federal public service. The Clerk is also the secretary to cabinet and, as such, acts as the deputy minister to the prime minister. The Clerk is the official head of the public service of Canada and has the non-partisan function of giving expert advice to the prime minister and cabinet with respect to the operational dynamics of policy making and program implementation within the federal public service. The clerk supervises departmental deputy ministers and advises the prime minister on matters respecting deputy minister promotions, transfers, and removals.

command mode
The centralization of decision-making power and authority in the hands of the prime minister and key advisors with respect to policy and program matters. Also referred to as the command-and-control mode. See strategic prime ministership.

Department of Finance
One of the key support departments in the federal government and also a central agency of great power and authority. Finance is responsible for setting the annual federal budget and providing the prime minister and cabinet with advice on macro-economic policy, trade, and taxation. See also central agency.

departmentalized cabinet system
A system of cabinet organization dominant in Ottawa prior to the 1960s and noted for its lack of central agencies and cabinet committees. Policy making was largely decentralized to each department, working under the leadership of the minister and prime minister. Deputy ministers possessed great power in this system. See also institutionalized cabinet system.

deputy minister
The administrative head of a department. Deputy ministers are appointed by the prime minister and serve as the most senior public servant in charge of a department. The deputy’s role is to be the chief executive officer of the department, responsible for its routine administrative functioning, while also working with the responsible minister on policy and program development. See also assistant deputy minister; associate deputy minister.

institutionalized cabinet system
The system of cabinet organization prevalent in Ottawa from the 1960s on and noted for often intricate systems of cabinet committees supported by an array of central agencies. Institutionalized cabinet systems are designed to facilitate more rational and systematic policy making by requiring it to arise from a decision-making system involving planning, prioritization, and programming based on consensus among a plurality of cabinet committees and central agencies. Such a system is intended to heighten the influence of elected ministers in decision making by lessening the political and administrative influence that any senior unelected official can have.

memorandum to cabinet
The formal document setting out a policy proposal arising from a department and requiring discussion and ratification by cabinet in order to become government policy. A memorandum contains three elements: the policy recommendation, analysis of the policy, and a communications plan for the policy.

policy and expenditure management system
A macro-system of financial management employed by the federal government from 1979 to 1993. PEMS was based on the earlier PPBS and similarly endorsed rational planning, prioritization, and program management but allowed departments and ministers more control over financial matters. See also budgetary rationalism.

portfolio
The field of jurisdiction of a cabinet minister. A portfolio refers to a department for which a minister is constitutionally responsible as well as all agencies, boards, commissions, and policy responsibilities that fall under the purview of that department.

Prime Minister’s Office
A central agency providing direct policy-making support and operational, administrative, and communications support to the prime minister. The PMO is a wholly partisan body and the prime minister chooses its employees directly. The senior officials of the PMO, all unelected advisors to the prime minister, rank among the most influential people in the government.

Priorities and Planning Committee
The overarching cabinet committee in institutionalized cabinets of the Trudeau and Mulroney eras. P&P was chaired by the prime minister, with the mandate of coordinating all other cabinet committees and setting the strategic policy direction of the government. P&P was disbanded by Chrétien in 1993, and its strategic policy-making role reverted to the full cabinet under the leadership of the prime minister.

Privy Council Office
A central agency providing direct policy-making support and operational, administrative support to the prime minister, the cabinet, and its committees. The PCO is a non-partisan institution staffed by public servants, functioning as an important link between the political executive and the administrative organs of the federal government in terms of policy and program transmission. The head of the PCO is the Clerk of the Privy Council Office and the secretary to cabinet. See also Clerk of the Privy Council.

Treasury Board of Canada
The only statutory cabinet committee of the federal government, established pursuant to the Financial Administration Act, 1985. All other cabinet committees exist at the discretion of the prime minister. The Treasury Board is responsible for federal public service human resources policy, oversight, and management. The minister responsible is referred to as the president of the Treasury Board, and the board usually consists of five or six ministers, one of whom is always the minister of Finance. The board is assisted by its administrative wing, the Treasury Board Secretariat. See also Treasury Board of Canada Secretariat.

Treasury Board of Canada Secretariat
A central agency providing policy and program advice to the prime minister, cabinet, and all government departments and agencies with respect to internal matters of financial management, human resources management, and accountability. The TBS also acts as the official employer of the federal government with respect to collective bargaining and is responsible for administrative support of this function.

Department of Finance Canada

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