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.

Canada 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: Continue reading →