Capping off a series of scandalous events that shook Canadian politics to its foundation, in February 2019, Jody Wilson-Raybould––the country’s then-Justice Minister and Attorney General––resigned from the cabinet and alleged that Prime Minister Justin Trudeau’s office had pressured her to intervene in a criminal case against the Canadian construction firm SNC-Lavalin. Wilson-Raybould claimed the Prime Minister’s office ordered her to arrange a more lenient remediation agreement with the firm, which was facing bribery and fraud charges for its 2001–2011 dealings with the Muammar Gaddafi regime in Libya, because of its economic significance. (SNC-Lavalin employs more than 9000 Canadians).
These revelations brought some much-needed attention to deficiencies in Canada’s enforcement of its laws against foreign bribery. While this scrutiny is welcome, and allegations of political interference are especially troubling, the SNC-Lavalin affair may be a somewhat misleading illustration of the most pervasive problems with Canadian authorities’ anti-bribery efforts. In fact, the SNC-Lavalin affair is anomalous because, notwithstanding the alleged interference from the Prime Minister’s office, the company was actually convicted and punished in the end—to the tune of a hefty $280 million CAD fine. In Canada, such prosecutions and convictions are quite rare—not because of political meddling, but because of structural deficiencies that prevent authorities from even pursuing such investigations in the vast majority of cases.
Read more: Too Nice? Why Canada’s Corruption of Foreign Public Officials Act (CFPOA) Needs RevampingCanada enacted its federal prohibition on bribing foreign public officials, the Corruption of Foreign Public Officials Act/Loi sur la corruption d’agents publics étrangers (CFPOA), in 1998, shortly after it ratified the OECD Anti-Bribery Convention. Much like the U.S.’s Foreign Corrupt Practices Act (FCPA), the CFPOA prohibits the bribery of foreign officials, and also requires companies to maintain accounting practices and internal controls sufficient to ensure that bribery does not occur.
Unfortunately, Canada’s track record of enforcing the CFPOA does not match the United States’ track record of enforcing the FCPA. Indeed, as early as 2005, Canada’s lackluster anti-bribery efforts attracted scrutiny and criticism from the OECD Working Group on Bribery, which evaluates how well member countries abide by the OECD Anti-Bribery Convention. In response, the Canadian Parliament amended the CFPOA in 2013 to strengthen its anti-bribery provisions. Yet, enforcement of the CFPOA continued to be infrequent, and when enforcement actions took place, the penalties were typically quite low. The 2010s saw slightly more high-profile investigations, with Niko Resources fined $9.5 million CAD in 2011 and Griffiths Energy fined $10.35 million CAD in 2013. And then, of course, there was the SNC-Lavalin case, which involved alleged CFPOA violations, though the company eventually negotiated a plea bargain that removed bribery-related charges in exchange for a fraud conviction. (Doing so avoided triggering the CFPOA’s debarment provisions, which would have prevented the company from doing further business in Canada).
But these few notable enforcement actions did not change the overall picture: As recently as October 2023, the OECD Working Group on Bribery described the Canada’s anti-bribery enforcement activity as “exceedingly low” relative to the strength of the Canadian economy and in comparison to similar countries. A recent Transparency International report similarly gave Canada poor marks in enforcing its laws against foreign bribery, comparing Canada disfavorably to peer countries. As the report noted, Canada did not initiate any CFPOA investigations in 2020 or 2021; during the same time span, the United States initiated 15 foreign bribery cases, and Switzerland initiated 28. In fact, charges have only ever been laid in nine cases in the CFPOA’s entire history, with only two individuals and four companies ever having been sanctioned. Canada’s anemic CFPOA enforcement is particularly worrisome given that Canadian exports and investments are disproportionately in high-risk sectors, such as energy and mining.
Canadian anti-bribery efforts would benefit greatly from a revised approach that does three main things:
- First, Canada should substantially increase funding for its anticorruption agencies. Currently, Canada’s anticorruption efforts are primarily facilitated through the Royal Canadian Mounted Police (RCMP), which established a small International Anti-Corruption Unit in 2008 composed of two teams of seven members each across two cities. This tiny footprint contrasts sharply with the U.S. Department of Justice’s dedicated FCPA Unit, which grew to a record-size of 39 prosecutors under the Biden administration in 2020 (as well as dozens of support staff), and the U.S. Securities and Exchange Commission’s FCPA Unit, which has an additional 35 full-time employees. Even after adjusting for population size, Canada lags far behind, and should immediately increase parliamentary funding for an expansion of the RCMP’s International Anti-Corruption Unit.
- Second, Canada should consider adopting the coordinated multiagency enforcement model seen in other jurisdictions, such as the United States. In particular, Canada should establish a specialized prosecutorial body for CFPOA enforcement either within the Canadian Securities Administrators (CSA) (the country’s counterpart to the U.S. Securities and Exchange Commission), the provincial securities regulators (which, right now, are needlessly cut out of the investigative process), or the Public Prosecution Service of Canada (PPSC) (the arm of the government currently tasked with prosecuting CFPOA cases after RCMP investigations). The U.S. example suggests that when multiple agencies share overlapping jurisdiction and coordinate closely, enforcement is strengthened. On a related note, Canada should also remedy the lack of coordination between provincial and federal authorities that has been identified as one of the causes of the underenforcement of the CFPOA.
- Third, Canada should strengthen its whistleblower protection programs to remedy what the OECD Working Group has identified as a major defect in Canada’s legal framework as it pertains to anti-bribery enforcement (among other things): the “absence of an effective system for the protection of reporting persons,” which makes it difficult for the government to obtain actionable information on foreign bribery. In particular, Canada should heed calls to: expand the protections against retaliation for whistleblowers in the Criminal Code of Canada to encompass a broader definition of employees; mandate protection frameworks for foreign bribery reporting in particular; and legislate to fill the gap in protection that leaves public sector workers without whistleblower status for reports involving private actors.
Strengthening the Canadian anti-foreign graft framework is crucial for the country’s credibility on the international stage when it comes to anticorruption work. Canada’s approach to enforcing the CFPOA is now in need of a bold and comprehensive overhaul. By expanding the resources allotted to the RCMP’s International Anti-Corruption Unit, by emulating successful interagency enforcement models like that of the United States, and by offering more robust protections for whistleblowers, Canada can step up its efforts to eradicate foreign bribery. These changes are essential for maintaining the integrity of Canadian business, upholding global anticorruption norms, and bringing Canadian enforcement in line with the standards set by its peer countries.
GAB | The Global Anticorruption Blog 
Great post, Hussain. I find the SNC-Lavalin case especially interesting, since it’s the closest we get to seeing a motive for non-enforcement — namely, the fear that prosecuting major companies will have negative economic and political repercussions. I wonder how widespread of a problem this is. Was it just a fear of Prime Minister Trudeau’s? Or do you suspect that investigators and prosecutors are also thinking about the same concerns? If the latter, I wonder whether it’s desirable and/or possible to better insulate prosecutors from political considerations like these.
Thanks, Micah, and all very interesting thoughts! I suspect this is likely a bigger problem for politicians who have to worry about winning vote shares in provinces where certain companies create a lot of jobs. And it’s also intriguing to think about whether a country like Canada, with comparatively less economic clout compared to the United States (which is the setting of most of the FCPA-related discussion on this blog), might be more susceptible to these kinds of pressures. Thanks for reading!
I had the same reaction as Micah – both that this is a great post, and that it points towards the reason behind low enforcement. It seems like so long as enforcement is limited to egregious, highly political cases, it’s bound to remain a lower priority. But as your post shows, these cases can also galvanize broader reform (as in 2013). Maybe we’re just waiting for the next scandal to erupt and create such an opening. When it inevitably does, it sounds like Parliament should focus on securing long-term funding for enforcement agencies over (or in addition to) amending existing laws.
Hi Hussain, thank you for this really informative post! I’m intrigued by the debarment provision of the CFPOA, which seems like the “capital punishment” for corporations, and I think it’s fairly reasonable and expected that the Prime Minister’s office wouldn’t want to debar a company that employed 9,000 Canadians. I wonder how often the debarment provision is enacted in the 9 existing CFPOA cases, and what exactly does debarment entail in this context. I’m not too familiar with the FCPA but I think debarment in that context is usually a collateral consequence that’s enacted by individual federal agencies (not the DOJ or SEC) to ban companies from obtaining future federal contracts, so I’m surprised to learn that CFPOA debarment simply stops a company from doing business in Canada. Maybe because of the disruptive nature of this provision (though it does serve as a great deterrent), prosecutors are more hesitant to bring CFPOA charges?
That’s super interesting! I hadn’t done a comparative debarment analysis when I wrote the post, and if it’s true that DOJ/SEC debarment mechanisms are much more limited in scope, that would make a lot of sense. In the older CFPOA cases I read, the companies were small enough in size that the exercise of the debarment provisions didn’t have nearly the effect that the contemplated debarring of SNC-Lavalin would have. I’m going to read more about whether debarment is uniformly applied in those cases or if there are often workarounds.
I had a similar reaction to Jinge – are prosecutors perhaps trigger shy because the trigger is so lethal?
A few other metrics I’d be curious about – first, how does the international business of Canadian firms compare to that of American firms? I understand comparing funding for anticorruption work based on population size, but it might also be worth comparing based on the amount of business Canadian firms do internationally. If they do comparatively little foreign business, perhaps that partially explains the funding disparity? Second, is it possible Canada is just free-riding on US and other countries’ enforcement against Canadian companies? What’s the policy argument for why doing so is against Canada’s interests?
Thanks for a great post!
Thanks for sharing Jacob! Those are thought-provoking points: I’d be surprised if Canadian firms were disproportionately more domestic-focused than American ones, but maybe it is true that the U.S. produces more exporters. In the SNC-Lavalin case for example, they performed a wide degree of international works. And I definitely agree that there’s an element of free-riding happening here, but I wonder whether outsourcing something like that allows Canadian companies to slip through the cracks. A different post I’m working on discusses how an overly insular approach to international anticorruption enforcement sometimes produces deleterious future results, so I think this is definitely a theme I’m going to continue to write on!
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Great post, Hussain. While the U.S. overlapping enforcement approach does seem to present a good model for Canada to emulate with respect to certain reforms, I’m left wondering whether there are other analogous countries that might map on to Canada better with respect to amount of foreign business. Similarly to Jacob, I also wonder if other countries’ enforcement mechanisms are targeting Canadian companies effectively such that Canadian law enforcement resources are better spent in other realms than beefing up CFPOA enforcement. Lastly, I think the lack of a robust whistleblower protection scheme is a real issue that could hopefully make a big difference once resolved. As I’m relatively unfamiliar with whistleblowing as an anticorruption tactic, do you know of any countries that have a system in place that’s worth emulating in this vein? It’s likely worth identifying one, to the extent possible, not just for Canada, but for other countries seeking to bolster their whistleblower protection systems as well.
Thanks so much for sharing these thoughts, Sunny! I also need to investigate different whistleblower protection systems comparatively across different jurisdictions, and am thinking of focusing on this topic more narrowly in a future post. I think the OECD working group report I linked in my third recommendation has some material on this, and I know the United States and Switzerland (two countries I cite as more successful examples of FCPA-like enforcement) have different systems. I hope to keep writing on this, so please stay tuned!
I know I’m a little late to this post, but one thing that this very original contribution had me thinking about is whether Canada’s lackluster enforcement of its anti-bribery laws might be an issue shared by some of Canada’s peer states. Thinking less here of the United States and more of other small, wealthy states with a lack of domestic corruption and a relative abundance of globally active firms compared to their size (e.g. the Netherlands, Sweden, maybe even Singapore?). I would be curious if these states have similar under-enforcement issues with regards to bribery perpetrated by their domestic firms abroad. I could see an argument that these states, Canada included, may have an incentive to export corruption and allow their nationals a relatively free hand abroad. This argument is a little under-formed in the absence of hard data, but a comparison of Canada with other peer states could make for a fascinating follow-on piece.