The biggest standing ovation from the Liberal caucus during Tuesday evening’s SNC-Lavalin drama came when the prime minister wrapped up his speech with a pledge to protect Canadian jobs — under any circumstances.
“We have always, always fought to create and protect jobs and we will never apologize for doing so,” Justin Trudeau told Liberal MPs, explaining why he expelled two former cabinet ministers from the party’s caucus.
The context is important here. One of those former ministers, Jody Wilson-Raybould, resigned from cabinet because she felt Trudeau inappropriately interfered in the administration of justice in order to ease the way for SNC-Lavalin — an employer of 9,000 people in Canada — through charges of fraud and corruption.
It’s one thing to stand up for jobs and growth. It’s quite another to unapologetically push the limits of the rule of law to do so.
And it’s also short-sighted, because Canada’s global Boy Scout reputation — offering stability and solid respect for institutions — is central to the country’s ability to attract investment and, by extension, jobs.
Branding is everything in the global competition to lure investment, as the federal Liberals know perfectly well.
Early in their mandate, when they sought and then implemented outside advice on how to enhance economic growth in Canada, highlighting the country’s reputation to foreign investors was front and centre.
The Trudeau government created Invest in Canada to showcase the country’s strengths and smooth the way for investors. On its website, our reputation is right there on the home page as a key reason why foreign firms should make Canada a destination: “#1 Most Reputable among G7 countries,” it says.
Trudeau himself has personified the branding effort. His progressive agenda caught the world’s attention when he was first elected, and he quickly sought to turn that adulation into investment deals, often meeting CEOs face to face.
Government officials spend a great deal of time and effort negotiating foreign investment protection agreements with other countries; they want to ensure that when Canadian firms venture into their territories, they are treated with respect and the rule of law. Those countries expect the same here.
And when Canada ran into diplomatic trouble with China last December for detaining Huawei executive Meng Wangzhou, its defence — which it shopped around the world — was that Canada always respects the rule of law.
“Our independent legal system is one of the finest, if not the finest, in the world. I trust it, Canadians should trust it, and our partners around the world should trust it, too,” Foreign Affairs Minister Chrystia Freeland said in December at a Toronto discussion that focused on the Huawei conflict.
But trust is difficult to market when the former justice minister has alleged political interference in that system, and the prime minister sees nothing wrong with that.
Dan Tisch is CEO of Argyle Public Relationships, a Toronto-based firm that is involved in global studies comparing countries’ reputations — including the one featured on the Invest in Canada website. He says the world ignores most of what goes on in Canada, but is taking note now — to the detriment of Canada’s brand.
Canada has received top marks because it’s a beautiful and friendly place, but also because of its strong governance and stable economy, Tisch says. The SNC-Lavalin controversy obviously doesn’t change the beautiful and friendly part, but it does take aim at Canada’s economic and political reputation. “It’s potentially very serious for Canada because it strikes a blow in two of the three directions,” Tisch said.
So it was no accident that Export Development Canada (EDC), the government’s export financing agency responsible for promoting Canadian business overseas, quickly hired outside counsel to look into allegations in a CBC report that SNC-Lavalin may have paid bribes in a 2011 project in Angola that was partly financed by EDC.
“EDC has strict commitments for responsible business conduct and we would never, under any circumstances, knowingly participate in a transaction tainted by bribery or corruption,” the agency said in a statement. “This behaviour goes against EDC’s core values and deep-rooted culture of business integrity.”
The EDC clearly knows which side its bread is buttered on. Canada’s reputation for upholding the rule of law is primordial to good business.
Freeland seemed prescient — but perhaps went unheeded — last December when she said, “We’re seeing a lot of countries around the world that are starting to play fast and loose with democratic institutions and with rule of law. Canada is not going to be one of those countries. And it’s not always so easy to be a rule-of-law country. But in the fullness of time, we’re always going to be glad that we stick to that.”
Heather Scoffield is an economics columnist based in Ottawa. Follow her on Twitter: @hscoffield