SNC-Lavalin: A Fantasy of Numbers

This is a story that a newspaper refused to publish, and a noted columnist ignored.  So, I guess this is the only forum I have left.

“Reading made Don Quixote a gentleman. Believing what he read made him mad.”
  - George Bernard Shaw

In the ongoing debate about SNC-Lavalin affair, one fact has been bantered about where the apparent justification for the government interference has been the supposed loss of 9000 jobs.  The actual number is about 8700 jobs but when you’re trying to scare people a little upward rounding doesn’t hurt, I guess.  If we are to believe this, we are to imagine that 9000 (8700) jobs are going to disappear overnight if anything happens to SNC such as being unable to bid on Canadian government contracts or the company moves its headquarters to another country.  But let’s look at the real situation.

“The public will believe anything, so long as it is not founded on truth.”
  - Edith Sitwell

Except for the headquarters function, mostly located in Montreal, almost all the work done by the company in Canada involves the building, operating and maintaining of infrastructure.  There are no manufacturing plants that can be moved to other countries. 

 

SNC Nuclear builds and maintains nuclear power plants.  These plants are not going to be moved overseas.  They will still be here and need the same level of maintenance that they require now.

SNC has built LRT systems across Canada and in most cases, they continue to run and maintain them after they are delivered.  Despite the saga of the Ottawa LRT, SNC has had some very good results in this realm.  In Vancouver, for example, they built and run an LRT system from Richmond and the Vancouver airport to downtown that was require for the 2010 Winter Olympics.  This set a very real deadline for the work to be completed.  In the end, the system was built and running one month early. These LRT systems are not going anywhere either.

SNC builds highways and bridges and maintains those also.  One example is the so called Brunway:  the trans-Canada through New Brunswick from the Quebec border to Fredricton where the company twinned the highway and now has a contract to maintain it with everything from snow clearance to renewal when the road deteriorates. Highways and bridges don’t move out of the country.

SNC provides engineering, maintenance and logistics support for over 60 minor warships and auxiliaries for the Royal Canadian Navy.  They provide that service even when the ships are deployed out of the country.  The need for these services is not going anywhere as well.

Most of these support contracts are quite long term so the contracts will not disappear immediately.  And most support contracts are not with the federal government, but by provinces and cities. Even if SNC loses some of these projects, the work will remain in Canada.  Companies that acquire these contracts will also be from Canada and will employ Canadian workers, including many of the same people who are doing the work now.

So, let’s not let this myth of 9000 (8700) lost jobs persist.  If any people are going to be hurt by any loss of work by SNC it is their shareholders.  That may be unfortunate, but you should note that through the whole controversy these past few weeks, SNC shares have been surviving quite well.

“Government is too big and too important to be left to the politicians.”
  - Chester Bowles