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Canada Hostile takeover of SNC-Lavalin, impact on jobs in Quebec among worries for Premier Legault

The Quebec Premier says he is increasingly worried the political scandal surrounding the federal prosecution of SNC-Lavalin is opening the door to a hostile takeover of the company, putting thousands of well-paying Canadian jobs at risk.

Premier François Legault said the dispute over whether Prime Minister Justin Trudeau and members of his government put inappropriate pressure on former attorney-general Jody Wilson-Raybould to make a deal so the company could avoid prosecution is separate from his main concern: the protection of one of the jewels of Quebec’s corporate scene.

“The situation remains very worrying. The price of the stock has dropped, there’s no controlling shareholder,” Mr. Legault said on Thursday, referring to the risk the company’s dropping share price could facilitate a hostile takeover. “If the SNC-Lavalin can’t have public [federal] contracts for 10 years, if the trial goes on for two or three years, it creates big problems and big risks for workers.”

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The conflict between Ms. Wilson-Raybould and the Prime Minister is playing out in a different way in Quebec from the rest of the country. While politicians of all Quebec parties stated the importance of the rule of law, that issue was secondary to the fate of the company, its head office and 3,400 employees in Quebec, along with questioning why the former attorney-general was unwilling to order a deferred prosecution.

SNC-Lavalin Group Inc. is publicly traded and about 80-per-cent Canadian-owned, but not by any majority owner. Quebec’s main public pension fund, the Caisse de dépôt et placement du Québec, holds a 20-per-cent stake.

The company employs about 9,000 people in Canada including 3,400 in Quebec, with the headquarters in Montreal. Mr. Legault said the province’s investment arm and the Caisse could join forces to block a hostile takeover and “protect these excellent jobs.”

Mr. Legault has urged federal authorities to pursue a deferred prosecution agreement with the company, which Ms. Wilson-Raybould refused to do despite pressure from Mr. Trudeau. Two opposition parties, the Quebec Liberals and Parti Québécois, agree.

Liberal interim leader Pierre Arcand said he backs Mr. Legault’s position that Ottawa should find a way to avoid prosecuting SNC-Lavalin. “The news around SNC-Lavalin is very difficult. I’m worried. For me, this issue should not be a partisan one,” he said.

In her testimony on Wednesday, Ms. Wilson-Raybould described how Mr. Trudeau and his officials repeatedly raised the Quebec election held on Oct. 1 as among their urgent concerns for allowing the company to avoid a prosecution that could hinder its ability to do business.

SNC-Lavalin’s federal prosecution never came up in Quebec as a campaign issue. Two campaign advisers to former premier Philippe Couillard confirmed it never came up within the privacy of his campaign bus, either.

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In Ottawa, it was top of mind at the time: Ms. Wilson-Raybould said the Prime Minister, his two chief advisers and the Clerk of the Privy Council, among others, raised it repeatedly. She said the Clerk and the Prime Minister last brought it up with her on Sept. 17 – two weeks before the vote that Mr. Couillard’s Liberals lost to Mr. Legault’s Coalition Avenir Québec.

The two former Couillard advisers, both of whom were granted anonymity by The Globe because they were concerned about hindering their new careers, said the former premier did not contact Mr. Trudeau or his officials about SNC-Lavalin during the campaign, which kicked off on Aug. 23. They did have conversations with Ottawa about the North American free-trade agreement and compensation for dairy producers.

In early August, about two weeks before the election campaign launched, SNC’s share price plummeted because of business difficulties in Saudi Arabia triggered by a diplomatic dispute between the country and Mr. Trudeau’s government. The company did about 11 per cent of its business in Saudi Arabia, compared with 15 per cent in Canada.

One of Mr. Couillard’s former advisers said they were in contact with the Trudeau government prior to the election campaign about SNC’s prosecution and Saudi troubles, but “there wasn’t much we could do about it other than to stay informed.”

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