Quebec gears up to protect head offices like SNC-Lavalin
Quebec is ready to go to bat to preserve head offices in the province, launching a new program that could help embattled construction giant SNC-Lavalin Group Inc.
The Canadian province set aside $1 billion (Canadian) to support “strategic” businesses, and will establish a team to develop intelligence “in the field of head office protection,” according to the budget documents released Thursday.
“It could be used for SNC,” Finance Minister Eric Girard told reporters in Quebec City. “The program was not designed for SNC.”
Montreal-based SNC has been at the centre of a controversy that has ensnared Justin Trudeau after his former attorney-general said the prime minister and some of his aides pressured her to intervene to help the construction firm avoid a trial. SNC has been charged with paying bribes related to work in Libya more than a decade ago.
Trudeau has said he supported SNC because the company employs 9,000 people in Canada. His former top bureaucrat, Michael Wernick, said the firm was considering moving its head office to London if it failed to get a settlement to avoid trial. SNC chief executive officer Neil Bruce said Wednesday the company never threatened to abandon Montreal.
Still, the province will be there should the need arise, Girard said, referring to the support announced in the budget. The more head offices that are based in Quebec, the better it is for the province, he said.
“This is giving ourselves the means to take participation in strategic companies if the need be,” he said. “When you have a head office in your province, on your territory, this is where decisions are made.”
Quebec Premier François Legault, who swept to power in October, has said his new government is committed to protecting local companies such as SNC from hostile offers from foreign bidders and has drawn up a list of 10 “strategic” firms worth preserving.
“The government of Quebec has to figure out what head offices are strategically important,’’ Economy Minister Pierre Fitzgibbon said last year in an interview. “There is a scale of 1 to 10. Can we intervene for all head offices? No. If we had to buy 20 per cent of all Quebec companies that are publicly traded, we would go bankrupt. So we have to be intelligent.’’
Besides SNC, cheese maker Saputo Inc. would likely be seen as key by Quebec because its supply base includes several local farmers, as would engineering-services firm WSP Global Inc. Companies such as Bombardier Inc. and CGI Group Inc. likely wouldn’t need protection because their dual-class share structure shields them from unwanted offers.
Quebec also pledged to boost the capital of its investment agency, Investissement Quebec, by an additional $1 billion, to $5 billion.