I went through SNC-Lavalin’s 2017 annual report, which is posted online (they haven’t reported 2018 yet). It contains some interesting figures that, when you piece them together, show that a ban on federal contracts would have a big impact on their business plan.
The annual report shows that in 2017, SNC-Lavalin had revenues of $9.3 billion. Of that, its infrastructure division was the second biggest source of revenue, at $2.2 billion. On a geographic basis, 52 per cent of SNC Lavalin’s revenue comes from North America, with Canada — at 31 per cent — being the biggest source, although it has dropped considerably in recent years, having comprised 60 per cent of revenue in 2014. But Canadian infrastructure is still a sizable chunk of their revenue stream.
What would a 10-year ban on federal contracts actually mean for SNC-Lavalin?
Like a lot of Canadians, I’ve been closely following the coverage of SNC-Lavalin stories coming out of Ottawa over the past week. There’s a debate playing out in op-ed pages across the country on whether or not SNC-Lavalin should be prosecuted for alleged fraud and corruption charges, or whether it would be preferable to reach a deferred prosecution agreement, whereby SNC-Lavalin commits to a number of reforms and pays a financial penalty instead of going to court.
I won’t get into the merits of either option — I’m certainly no expert on criminal law and corporate cases — but there’s one aspect that keeps getting talked about that intrigues me. It’s the possibility that if the federal government took SNC-Lavalin to court and won, SNC could be given a 10-year ban on bidding on federal contracts.
What kind of impact would that have on the company?
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