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SNC-Lavalin’s ‘tanking’ shares meant Wilson-Raybould should have reconsidered cutting deal: Wernick

Privy Council Clerk Michael Wernick told a House of Commons justice committee on Wednesday that the "new facts" that emerged was the tanking of the share prices that made it vulnerable to takeovers.

The “tanking” shares of SNC-Lavalin after the decision not to offer it a way to avoid criminal trial should have been grounds for former attorney general Jody Wilson-Raybould to reconsider cutting the company a deal, Canada’s top civil servant says.

In his second appearance before the House of Commons justice committee studying the SNC-Lavalin affair, Privy Council Clerk Michael Wernick was pressed by opposition members on why government officials kept pressuring Wilson-Raybould in fall 2018 to think of potential job losses at the company, despite her saying she had made up her mind not to offer a deferred prosecution agreement to help the firm escape criminal trial.

READ MORE: ‘Consider a second opinion’— Gerald Butts says ‘grey area’ between political staff, Wilson-Raybould on SNC-Lavalin affair

“I firmly believe there were new facts that emerged between September and December,” Wernick said following a question by NDP MP Charlie Angus about why officials continued what Wilson-Raybould described as a “consistent and sustained effort” to intervene in her decision, after she made it in September 2018.

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When asked what those “new facts” were, Wernick pointed specifically to the Montreal engineering giant’s falling shares.

WATCH BELOW: Michael Wernick says he never told Wilson-Raybould SNC-Lavalin headquarters would move

Michael Wernick says he never told Wilson-Raybould SNC-Lavalin headquarters would move
Michael Wernick says he never told Wilson-Raybould SNC-Lavalin headquarters would move

“The new facts that emerged which I believed were public interest considerations were the tanking of the share price,” Wernick said, adding that “communications with the new premier of Quebec” also “changed the risk calculus around prosecution of the company.”

SNC-Lavalin’s shares fell 14 per cent on Oct. 10, 2018, the day it announced in a press release it would not be invited to enter into a deal, even though Wilson-Raybould testified the director of public prosecutions, Kathleen Roussel, told SNC-Lavalin on Sept. 4, 2018, that they would not get a deal.

That discrepancy has prompted a shareholder lawsuit against SNC-Lavalin.

ANALYSIS: An absurd, fascinating, partisan and remarkably helpful tale on Trudeau and SNC-Lavalin

But Wernick said those falling shares put the company at risk of a takeover and that the impacts of that should have been considered.

“My view is that the economic impacts of jobs … is a relevant public interest consideration,” he said.

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The legislation establishing deferred prosecution agreements as a legal option states that governments “must not consider the national economic interest” in deciding whether to grant a deal to a company.

Wernick argued that “national economic interest” meant that the government could not effectively let a company off the hook to keep the country competitive over another country, not that domestic economic factors could not be considered.

WATCH BELOW: Michael Wernick on SNC-Lavalin case: ‘I made no threats’

Michael Wernick on SNC-Lavalin case: ‘I made no threats’
Michael Wernick on SNC-Lavalin case: ‘I made no threats’

A deferred prosecution agreement in Canada is a never-before-used tool, created last year by the Liberals to allow a company to admit wrongdoing and pay a fine, rather than face criminal prosecution.

In the case of SNC-Lavalin, the company is facing charges of corruption and fraud for its business activities in Libya.

If convicted, it would be barred from bidding on lucrative government contracts for a decade.

Prime Minister Justin Trudeau has changed his position over the past month from initially saying the report of pressure being applied by officials to Wilson-Raybould over the matter was “false,” to saying that officials have always acted to protect the 9,000 jobs that he suggested were at risk if the company were to be convicted and barred from bidding on public contracts.

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READ MORE: Gerald Butts’ testimony — read the full transcript of his opening remarks

That risk to jobs has become the central refrain by government members when questioned on the issue, without providing any proof directly linking potential layoffs with a decision not to offer a deferred prosecution agreement.

Wernick’s appearance before the committee Wednesday afternoon followed testimony by Gerald Butts, Trudeau’s former principal secretary, hours earlier in which Butts repeatedly stressed that as attorney general, Wilson-Raybould had been “obligated to bring fresh eyes to new evidence” in the matter.

He did not say what that “new evidence” was, but repeatedly referenced the 9,000 SNC-Lavalin jobs in Canada.

However, Butts told the committee he “could not recall” any particular instance in which he was presented with evidence that those jobs were actually in danger.

Wernick also faced repeated questioning over what kind of clear evidence he had to prove those 9,000 jobs were at risk.

While he noted the company “was and is at risk,” he did not direct committee members to any data indicating job risks were likely as a result.

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