What!!!! Perish the Thought ... Corruption in Canada?!

"I make sure we get a signed invoice [for bribery pay-offs]."
"And payment is always in the form of a cheque, not cash, so we can claim it on our income tax!"
Bernard Lamarre, former head of Lavlin Inc., Quebec

"Given the size of Canada's economy and its high-risk industries, the Working Group recommends Canada review its law implementing the Convention [Corruption of Foreign Public Officials Act] and its approach to enforcement to determine why it has only had one conviction [of illegal bribery of foreign officials] to date."
OECD Working Group on Bribery, 2011

"Deferred prosecution agreements [DPAs] and similar alternative-enforcement mechanisms act as powerful incentives for firms to disclose ethics breaches and co-operate with authorities -- co-operation that leads to higher levels of enforcement."
John Manley, 2015 CEO Canadian Council of Chief Executives; former Liberal deputy prime minister

In 2006 Canada had a Conservative-led government under Prime Minister Stephen Harper, a government that prosecuted companies that based their growth on bribing foreign officials to obtain contracts abroad. This was a change from former Liberal-led governments that turned a blind eye to bribes that resulted in exports being facilitated. When Canada had a Liberal government and Jean Chretien -- later a three-term majority Liberal Prime Minister: 1993 - 2003 -- was trade minister in the 1970s his attitude was that overseas sales shouldn't be held up by irrelevant details such as bribes.

It is why this well-seasoned Liberal politician took many trade missions to China during his prime ministerial years, forging contacts with influential Chinese authorities and politicians in the Communist government, eager and willing to overlook the repressive regime where corruption reigned as supreme as its human rights failures. As soon as the Liberals lost government as a popular electoral base crumbled under the weight of a vast corruption scandal, Mr. Chretien signed on as an influential senior member of a prestigious Canadian law firm to lend his practical expertise in leading trade missions to China.

Canada passed its Corruption of Foreign Public Officials Act in 1998 as it had little other choice when an Organization for Economic Co-operation and Development convention characterized bribery for what it is, an illegal, corrupt practise -- demanding all its members crack down to ensure its business interests complied with what became an OECD-wide anti-corruption cleansing initiative. As a member, Canada had little option but to join in enacting such a law, though the legislation was largely ignored in Canada.

Canada was later named and castigated as one of the developed world nations most tolerant of corruption in a 2009 Transparency International study which found that Canada undertook "little or no enforcement" of anti-bribery legislation, placing Canada on record as being similar in that regard to countries like Greece, Slovenia, South Africa and Turkey in their casual disregard for corrupt business practises.

Canada was further distinguished when a 2011 review undertaken by the OECD Working Group on Bribery faulted the lax enforcement of anti-corruption laws. When 2008 rolled around under the Conservative minority government, that oblivious attitude to internal corruption came to an abrupt halt as the RCMP created its International Anti-Corruption Unit which led to charges against SNC-Lavalin, Canada's largest engineering and construction company with worldwide holdings, and well recognized for its corrupt business practices.

Once a majority Conservative government was returned in 2011 the government increased its anti-corruption focus through its Integrity Framework, automatically barring companies convicted of criminal offences from accessing contracts with the federal government for a decade. SNC-Lavalin, the Quebec-based construction giant, now at the centre of a government scandal where the current Liberal-led government of Justin Trudeau has been accused of attempting to give it an "out of jail free" pass, heavily dependent on government contracts is a case in point.

Its corrupt practices saw its opportunities for World Bank contracts dried up for the engineering company as penalty for its corrupt practices after it was convicted of a criminal offence. The current Liberal government has invested itself in exonerating the company irrespective of its record of criminality, set on reducing the threat that the Integrated Framework represents for its future and the employment of thousands of Quebec-based employees, where the Liberal government depends on votes, alert to the potential of the October federal election becoming a Liberal=routing exercise.

To that end, they were extremely receptive to a legalized plea bargain where a company and its executives, under a DPA -- deferred prosecution agreement -- could promise not to further engage in corrupt practices, and to pay a compensatory fine, then get on with business as usual, spared a trial and a resulting criminal record that would bar them from bidding on lucrative government contracts for a ruinous ten-year period. SNC-Lavalin lobbied the government robustly to enact a DPA and succeeded, hoping to be spared an upcoming trial for bribery.

However, the federal Criminal Prosecution authority declined to offer the company a deferred prosecution agreement, leading the executive branch of government to make an effort to intervene through pressuring the Minister of Justice to overturn the decision of the Prosecution authority and it all blew up into a scandal of what can only be termed typical Liberal proportions. In fact, DPAs have the effect of decriminalizing bribery and allied corrupt practices, enabling bribes to continue to be viewed as a cost of doing business.

The previous, Conservative government refused to enact legislation for DPAs, favouring traditional prosecutorial practices to result from corporate crimes. Once the Liberals ascended to government in the 2015 federal election, two months passed and an administrative agreement permitting SNC-Lavalin to continue winning government construction contracts proceeded, despite criminal charges pending against its executives.

With a change of government, where the current Prime Minister, Justin Trudeau cheerfully pronouncing to the world at large "Canada is Back!", lobbying and political considerations in place of operations through the rule of law have taken centre stage, where the bribery of foreign officials is back on track. Business at any cost at the service of a government that touted its determination to run a transparent, unimpeachable style of government where integrity would be manifest.

The Art of the Trumpian Deal

"We're starting negotiations with Canada, pretty much immediately. If they'd like to negotiate fairly, we'll do that."
"If not, the easiest thing we can do is to tariff their cars coming in ... It could end in one day and we take in a lot of money the following day."
"This is a tremendous thing. They used to call it NAFTA, we're gonna call it the United States-Mexico trade agreement. We'll get rid of the name NAFTA, has a bad connotation because the United States was hurt very badly by NAFTA for many years."
"It's an incredible deal [the U.S.-Mexico agreement], it's an incredible deal for both parties.We'll start negotiating with Canada relatively soon."
U.S. President Donald J. Trump

"This [protecting of intellectual property] would require a significant overhaul of Canadian intellectual property law." 
"These provisions ... are at odds with the Canadian government's commitment to modern intellectual property laws that adequately balance the interests of all stakeholders [as with adding years of patent protection from generic drug competition]."
Michael Geist, intellectual property expert, University of Ottawa

Canadian Foreign Affairs Minister Chrystia Freeland arrives at the Office Of The United States Trade Representative, Tuesday, Aug. 28, 2018, in Washington.Andrew Harnik / ASSOCIATED PRESS

The simple fact is, negotiating a fair and mutually useful agreement on free trade with the three partners representing two supplicants and one powerful bully, the prospect of fairness becomes a lost cause. When the balance of power is held unevenly it represents a big stick to wallop the weaker links in a three-way deal with. Where the U.S. yielded in some areas in the original NAFTA agreement, that time is long gone; now the reality is that the one with that big stick is prepared to use it, as a very effective 'negotiating' device.

Beginning with the unexpected U.S. tariffs on steel and aluminum, and going on, in Canada's case, to target lumber, along with other vulnerable items, even if it ends up hurting American consumers as much as it does Canadian producers. Donald Trump may wax threatening about fairness, when he demands that Canada's Supply Management System be dropped -- an antiquated, anti-consumer farm monopoly that should be rethought -- but it has been repeatedly and pointedly observed that the U.S. has its own farm subsidies more than equal to Canada's.

None of the three major political parties in Canada is prepared to submit on the demand to dissolve supply management; there's too much political interest, as in danger, at stake, in the form of critical votes from a well-oiled lobby group. The Dairy Farmers of Canada, as an example, is not above using the threat of political boycott for any party that seriously considers abolishing the dairy supply management. Its threatening overtures ensures that none of the parties would dare speak to the issue in a conciliatory tone to NAFTA.

At the just-concluded Conservative Party of Canada's annual conference a briefing book produced by the Dairy Farmers of Canada was discovered by the press amplifying the extent of their influence, as when it warns that "Members of the Conservative Party of Canada have sent a clear signal that they do not support Canadian farmers" and "Canadians will remember the position taken by Conservatives today". There was no clear signal, no committed position, not even a discussion on the agenda relating to supply management; the issue was deftly set aside; dead in the water.

But had it not been, and the conference had that debate with a majority deciding that their party would do well to scrap supply management, the little book of instructions cautioned the Conservative Leader not to forget the power vested in his position: "The powers of the Leader are far-reaching in preventing a policy from being in the party platform. DFC has been told by the Leader's office that he will exercise this power ... regardless of the outcome at convention." There's the lobby telling the party how it will act; the party indebted to the vote.

Well, Justin Trudeau has an interesting decision to make. The Liberal Party is firm that this is a non-negotiable issue. And "Canada will not be pushed around". If the farm lobby cannot depend on the Liberals, they can't depend on any party. Oh, yes, of course, the New Democrats; and how likely are they to form government -- heaven forfend. It is a desperate situation when a three-party agreement deliberately cuts out one of the three. Six weeks of negotiations took place between the U.S. and Mexico, Canada clearly informed its presence not only unneeded but unwanted.

The idea being, as senior U.S. trade negotiator Robert Lighthizer noted confidently, to strike an agreement with the slightly more malleable Mexican negotiators and when it's done, allow Canada to enter the negotiations with the knowledge that the U.S. is prepared to conclude a bilateral deal without Canada, and leave Canada out entirely, if they feel the need to do so. Canada cannot afford not to sign on to a renewal of NAFTA; the U.S. represents its trade lifeboat; the U.S. doesn't need trade, Canada does. This is indeed the proverbial rock and a hard place.

Accede to U.S. demands that supply management be dissolved to please Trump, and the Liberals limp, defeated into the October 2019 election. Refuse to drop supply management and retain the dignity of making one's own sovereign decisions over the value placed in Canadian-made internal agreements -- almost all other nations, including the U.S. commit to agricultural subsidies of some sort, to ensure self-reliance on national self-sufficiency of the necessities of life-sustenance -- and the Liberals eat humble pie while the Canadian economy tumbles and the voting public takes its revenge.

No sleeping easy in Ottawa for the next five days, the time-frame the U.S. has given Canada to make up its mind whether it is serious about concluding a deal with its Mexican and U.S. free trade partners. This is one very large lemon to suck on.

United States Trade Representative Robert Lighthizer leaves the Office Of The United States Trade Representative, Tuesday, Aug. 28, 2018, to walk to the Eisenhower Executive Office Building, in Washington, ahead of Canadian Foreign Affairs Minister Chrystia Freeland. Canada, America’s longtime ally and No. 2 trading partner, was left out of a proposed deal Trump just reached with Mexico and is scrambling to keep its place in the regional free-trade bloc. Andrew Harnik / ASSOCIATED PRESS