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The offices of SNC-Lavalin are seen in Montreal.Ryan Remiorz

Canada's plan to push ahead with new laws to address corporate misconduct could help SNC-Lavalin Group Inc. avoid a criminal trial for corruption and prompt other companies to come forward with admissions of wrongdoing.

Shares in the Montreal-based engineering giant popped as high as 4.6 per cent in Friday trading, to $58.16.

The federal government said Thursday on its Public Services and Procurement Canada website that it will introduce legislation creating "deferred prosecution agreements" (DPA) – settlements that suspend criminal prosecution for companies that submit to special conditions. The DPAs would be implemented through judicial remediation orders.

It said it will also make changes to its Integrity Regime, which is the system of rules determining whether a supplier is eligible to do business with the government.

"Canada's behind the ball on this," said John Boscariol, an anti-corruption law specialist at McCarthy Tétrault. "Regulators and enforcers in other countries have recognized that when you have a DPA regime, combined with this opportunity for voluntary disclosure, you can have a lot more of these situations be resolved. Companies can come forward; they can get more comfortable in fixing the situation."

Deferred-prosecution agreements are deals by which companies charged with corruption or other crimes – or firms that discover such transgressions themselves and report them – typically agree to pay multimillion-dollar fines and put in place more rigorous ethics and compliance systems. In exchange, criminal proceedings against them are waived if they fulfill their obligations, sparing them a conviction that would trigger other consequences such as violating debt covenants.

No timeline was given for the legislative changes.

The clock is ticking for SNC-Lavalin, which was among the loudest voices calling for Ottawa to make this move. The company is eager to put an end to a resource-sapping bribery scandal that has loomed over its business and stock price for more than five years before it causes any more damage.

Prosecutors laid rare corruption and fraud charges against SNC in February, 2015, related to its business in Libya, which is at the heart of the scandal. A preliminary hearing in the case is scheduled for September this year.

The engineering firm says executives who have since left the company were responsible for the wrongdoing and that it has since reformed ethics and compliance procedures to among the toughest in the world. It is suing those same executives to recoup the allegedly embezzled funds and maintains the company itself did nothing wrong.

Neil Bruce, SNC's chief executive officer, said during the company's earnings call Thursday that the company would be keen to strike a formal DPA settlement with the government to resolve the outstanding charges against it. Mr. Bruce sees a DPA for SNC-Lavalin as a way of levelling the playing field with international rivals.

The United States, Britain, France and Australia all currently have deferred prosecution agreement systems. Engineering firms based in those countries have benefited from the system to win contracts at the expense of SNC, the company has said.

A key question in coming months for SNC-Lavalin investors will be just how big the financial penalty against the company will be.

Any fine below $300-million would be viewed positively by the market, National Bank analyst Maxim Sytchev said. The analyst says SNC's legal woes have compressed its price-earnings multiple and that resolving them translates to an extra $5.10 a share in value. That would be offset by whatever it pays as a penalty.

"We see this as a long overdue step in the right direction towards finally putting [SNC's] corruption scandal to rest and bringing new investors to the table," Raymond James analyst Frederic Bastien said in a note.

SNC-Lavalin ended fiscal 2017 with a revenue backlog of $10.4-billion and $706-million in available cash on its balance sheet. It tallied earnings for the year of $382-million on revenue of $9.3-billion.