AED in Canada: Changes at the Top

Construction giant scandal shapes 2019 landscape in Ottawa

Ottawa has spent the last few years bucking trends. One that continues is the (often small) shuffling of the cabinet early in the new year. he first cabinet shuffle came on January 10, 2017, and most recently, January 14, 2019, saw a handful of new executives moved into new roles. What is supposed to be a quiet time to reflect, strategize and gain perspective for the final push to the fall election has proven to be anything but for the governing Liberals.

A few of the changes were easily understood by political observers, but the decision to move the Hon. Jody Wilson-Raybould to the Veteran’s Affairs portfolio was puzzling to everyone. Everyone except, it seems, the prime minister and his inner circle of advisors. Pundits and reporters pounced on their contacts to find out why a star candidate and exceptionally effective senior minister was given a portfolio that regularly faces criticism. Wilson-Raybould was, after all, one of the main ministers responsible for two of the government’s most significant policy initiatives since she came to office—physician-assisted dying and the legalization of cannabis. Veteran’s Affairs was clearly an odd fit, and the sense that she had been handed a demotion, and was disappointed, prompted media to dig deeper.

In early February, a story surfaced that SNC-Lavalin had pressured the senior echelons in government to allow their company a deferred prosecution agreement for charges of fraud and corruption related to bribes made to Libyan officials. Wilson-Raybould, as justice minister, was the lone senior minister with the ability to intervene in the case. Within a matter of weeks, Prime Minister Justin Trudeau’s right-hand man, Principal Secretary Gerald Butts, resigned his position amid claims that he did nothing wrong. The entire affair has been poorly handled from a communications perspective, and voters are starting to turn away from the Liberals, who are particularly susceptible to allegations of corruption, especially in Ontario and Quebec. Trudeau’s personal brand had been able to pull them out of that rut, but close association with this scandal may make it difficult in the next election.

The involvement of a major construction company makes this a challenging time for businesses that seek to take part in the building of Canada’s next wave of major public infrastructure. Without a deferred prosecution agreement, SNC-Lavalin could be prevented from bidding on any federal government contracts for the next decade. 

At present they have been awarded the contract to work on the second phase of the Ottawa light rail transit system, one of several major projects where the firm is heavily intertwined with public contracts. For smaller businesses in the construction pyramid, the effects may not be significant, but the prominence of the firm in Quebec’s business community and overall psyche cannot be overstated. This is especially true in an election year. The government is slipping in the polls, and they need strong support in that province to win.

In this context, federal Finance Minister Bill Morneau announced this week that he will be tabling the final budget of this mandate on March 19. There has been a long-standing feud between Minister Morneau and businesses owners, small and large, since at least the middle of 2017. He has made several changes that have been designed to speed up investments in infrastructure and support small businesses overall, but this will be his last chance before the next election to prove that he understands how the economy works and what enterprises need to succeed. He has indicated that he will be focusing on skills training and human resources development, but these changes will be balanced against lofty expectations for groups like Canada’s senior citizens, who were given a dedicated minister in late 2018.

The government has no room for error. Missteps in the budget, or a soft landing of their top political marketing device during a political crisis, will mean they face being thrown out of office in October. Some major developments that are expected on infrastructure include a strong focus on rural economic development. The Liberals have been a government for big cities and have been seen to ignore the smaller communities that are still home to 49 percent of the population. Many rural residents are older Canadians, who vote in much higher numbers. The government showed they recognized this by appointing the Hon. Bernadette Jordan as Canada’s first minister of rural economic development in January. It is expected that she will be given a strong suite of funding projects, including big money for rural high-speed internet services, to try to cauterize that wound before voters head to the polls. The March 19 budget will set the stage for AED’s April Ottawa Parliament Hill Day, and we’re looking forward to connecting members with decision-makers from all sides to learn more and advocate for the industry.

Related Articles