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‘What is certain is that if companies refuse to reimburse, they will be subject to lawsuits.’ Quebec Justice Minister Bertrand St-Arnaud explains a legislation he tabled on the recovery of money in public contracts.

Jacques Boissinot/The Canadian Press

Bid-rigging and collusion by construction and engineering firms in Quebec are proving costly for those involved in the illegal activities.

Not only have the companies been barred for the past year from bidding on government contracts, but they now face the prospect of having to pay back all the money they obtained through fraudulent means, and could also face criminal and possibly civil charges.

The Quebec government tabled legislation on Wednesday to recover what it claims to be "hundreds of millions of dollars" obtained through "fraud or fraudulent tactics" by construction and engineering firms over the past 15 years.

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Bill 61 will facilitate government attempts at recovering overpayment made to several firms, including construction companies such as Simard-Beaudry formerly owned by entrepreneur Tony Accurso, accused of fraud, and engineering firms such as SNC-Lavalin, Dessau and Genivar. All have been mentioned during the Charbonneau Commission into corruption for their alleged involvement in bid-rigging and collusion schemes.

The bill allows companies to voluntarily repay the amounts obtained illegally from the province, municipalities and government agencies. Yet despite an admission of guilt and an effort to repay the government, companies involved in illegal practices will still be subject to criminal charges.

Under tough new rules adopted last year, companies found guilty of fraud are prohibited from bidding on government contracts for up to five years and must obtain a seal of approval from the province's securities commission, the Autorité des marches financier, before re-entering the tendering process. Treasury Board President Stéphane Bédard said several companies involved in fraudulent deals were eager to turn the page and come to terms with the government. But paying back the illegally obtained money won't wipe the slate clean for what they did in the past, Mr. Bédard said.

"Reimbursing the money won't allow the company to be rehabilitated more quickly. They won't be able to buy their rehabilitation," he said. "This is not a fast track to obtaining amnesty."

But companies refusing to admit they used corrupt means to obtain contracts, and later found guilty of fraud, will face civil lawsuits, said Justice Minister Bertrand St-Arnaud, adding that prosecutors will use the maximum resources to recover illegally obtained public funds.

"It will be very profitable for the government," Mr. St-Arnaud said in a news conference on Wednesday. "What is certain is that if companies refuse to reimburse they will be subject to lawsuits."

The government refused to give any specific amounts it hopes to recover over the five years it has set to obtain reimbursements. "It is difficult to set an amount. Certainly several tens of millions of dollars and even hundreds of millions," Mr. St-Arnaud said.

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Voluntary reimbursements will be determined by an independent person – likely one or more retired judges appointed by the government to negotiate with construction companies and engineering firms. The amount will be set based on a yet-to-be-determined percentage of the overall contract. However, the minister "may, subject to providing proof, claim an amount greater than that determined," according to the bill, which will allow the government to demand a higher reimbursement if the amount of the fraud was found to be even greater than what was presumed.

Mr. St-Arnaud estimated that part of the money recovered from construction firms – about 20 per cent – will be placed in a special fund to pay the legal fees and administrative costs involved in obtaining reimbursements. The rest will go back to the province, municipalities or government agencies defrauded by the companies.

Testimony heard before the Charbonneau Commission unveiled elaborate collusion and price-fixing schemes during the tendering, awarding and management of government contracts.

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