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Canada With SNC-Lavalin, the Liberals’ ethics ghosts are back to haunt Justin Trudeau

Heading into their second national campaign against Justin Trudeau, his opponents were still jabbing at him in search of weaknesses to exploit.

Earlier this week, it was the Prime Minister’s privileged upbringing and personal wealth that Andrew Scheer’s Conservatives were going after. They scored some modest points. Like most other attacks over the years, it didn’t highlight much that voters hadn’t factored in last election. Mr. Trudeau wasn’t wobbling, much.

And now suddenly, courtesy of The Globe and Mail’s report about alleged pressure from the Prime Minister’s Office on then-Attorney General Jody Wilson-Raybould to end criminal proceedings against SNC-Lavalin, Mr. Trudeau looks more vulnerable than at any point since his rise to power four years ago.

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The story is bad for the Liberals for many reasons – among them the potential for lengthy investigations (coinciding with next fall’s election), and the suggestion that a trailblazing A-G’s demotion may have been punishment for taking a principled stand.

But what might be most politically problematic for Mr. Trudeau is that it revives old perceptions of his party in ways that seem particularly unhelpful in the current political climate.

It took a long time for the Liberals to shake off the ghosts of scandals, involving well-connected insiders running wild, that accumulated during a dozen-plus years in government under Jean Chrétien and Paul Martin. When they finally did so in 2015, after nearly a decade in the wilderness, it was partly because Mr. Trudeau seemed (despite his surname) to represent a new generation with a more open and accountable approach.

The Liberals have had ethical stumbles since, including Mr. Trudeau’s island vacation with the Aga Khan, and Finance Minister Bill Morneau’s handling of his personal holdings. But they have tended to involve a sloppiness borne of too much faith in their own virtue – We’re such well-meaning public servants, nobody could possibly believe otherwise – more than the grimy old-school realpolitik of the Chrétien era.

The SNC-Lavalin dilemma is the first one that really triggers unwelcome 1990s nostalgia.

The impression is that a well-connected company, whose executives previously ran afoul of federal elections law for how they disguised political donations, got special treatment from PMO officials it heavily lobbied as it tried to escape fraud and corruption charges. Possibly that treatment started with last year’s amendment of the Criminal Code to give prosecutors leeway to suspend charges against Canadian companies; allegedly it continued with pressure on Ms. Wilson-Raybould to direct the use of that power.

No, it’s not the Sponsorship Scandal, despite the controversy again centring around Quebec-based industry. There has been no suggestion that insiders reaped personal benefit, nor any alleged misuse of public funds. It’s possible that any questionable behaviour was motivated only by trying to save a major Canadian company at risk of being destroyed by prosecution for crimes committed by long-gone executives. And any such attempts to bail out SNC-Lavalin didn’t work, since the prosecution proceeded.

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And when it comes to political fortunes, even the Sponsorship Scandal might not necessarily have been fatal. Maybe the Liberals would have won a fourth consecutive majority government had Mr. Chrétien been allowed to remain at their helm and keep brushing off scandal, rather than having Mr. Martin replace him and go out of his way to tell Canadians how terribly their party had behaved.

But it’s also possible that there is now less tolerance for clubby establishment politics, for giving favour to dubious private-sector actors.

The Liberals, as much of an establishment party as this country has, were nervous even before this week about the populist wave that has swept other Western countries. A key driver of that wave has been the sense, largely rooted in uneven recovery from the recession a decade ago, that the well-connected and deep-pocketed get to play by different rules than everyone else.

Now, along comes a story about a company accused of major bribery and fraud while playing nice with Moammar Gadhafi’s Libyan regime – and at the centre of scandals in other countries – commanding a more sympathetic ear in the corridors of power than your average Canadian charged with much lesser offences but lacking lobbyists or longstanding connections.

It remains to be seen what twists the story takes regarding SNC-Lavalin’s relationship with Ottawa. And it’s not immediately obvious that the opposition parties are capable of capitalizing on any backlash. Anti-corporate populism is not the Conservatives’ strong suit, and nothing is the NDP’s strong suit at the moment.

By the time the federal campaign starts, Mr. Trudeau’s opponents may be trying to hit some other weak spot. But it sure looks right now as though the Liberals’ ethical reputation, and a perceived disconnect from law-abiding Canadians that can come with it, is back to being their soft underbelly.

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