SNC Lavalin Scandal Could Change Canada’s Government

The Federal government is reeling from the pressure of a scandal that has shaken elite circles across the country. Extensive media coverage in the last several days has widely revealed the scandal to the public – we are of course talking about the Jody Wilson Raybould and SNC Lavalin. 

In essence, former Attorney General of Canada, Jody Wilson Raybould refused to provide a deferred prosecution agreement for SNC Lavalin – a Quebec based engineering giant. SNC Lavalin had previously bribed the government of Muammar Gaddafi in Libya for construction contracts. Despite tremendous pressure from the Prime Minister himself, high ranking public servants, and other leading political figures, Jody Wilson Raybould refused to yield. 
SNC Lavalin employs thousands in Quebec and Montreal, the home province and home city of Justin Trudeau. It is a well connected and storied company, with deep political connections. The Liberal Party of Canada has long had deep ties with large Montreal firms and the city’s old money aristocracy. As for Mrs. Wilson-Raybould, she revealed the extent of her principled core values and followed in the footsteps of her father – who fought political battles with Justin Trudeau’s father, Pierre Elliott Trudeau. Mrs. Wilson-Raybould and her father are well known and respected Indigenous Canadians. 
The now fully unveiled scandal has led to a media frenzy, a sharp drop in opinion polls and support for the government, and Ottawa’s dirtiest laundry now out in plain sight for the public. Media commentators were all ubiquitous and sharp in their criticism of the Prime Minister – many of whom suggested that he should resign or that the government’s reputation is now seriously compromised. The scandal also led to the shock resignation of Trudeau’s Principal Secretary Gerald Butts, the second most powerful man in Ottawa and one of Trudeau’s closest personal friends.
While this year’s federal election is still 7 months away, an eternity in politics, the SNC Lavalin scandal continues to unfold. The instability could fuel more political drama and both opposition parties will look to take advantage. 

Ontario Election Predictions And Real Estate Implications

Housing Is One Of The Biggest Issues In The Upcoming Ontario Elections 

With the middle class increasingly squeezed out of the housing market, government intervention will be increasingly called for and more and more political capital will be tied up in ‘resolving’ real estate issues. Whichever party wins Ontario’s 2018 election and forms government will grapple with growing discontent and increasing expectations from an electorate focused on housing issues. On the one hand, there are equity affluent baby boomers content with the status quo, and millennials and generation Xers struggling with low supply, high costs, and stringent demands desiring systemic change. Here’s Tembo’s analysis on how party’s would handle real estate if they win.

PC Candidate Doug Ford

PC Candiate, Doug Ford

PC: A PC government under Doug Ford would likely focus on supply side reforms, incentivizing and encouraging developers to build more housing. Permitting and regulatory processes would likely be streamlined, more land would be freed up for development, and financial incentives and corporate welfare to housing builders would not be out of the question. Funding for affordable housing is not expressly cited as a priority for the PCs and never has been. The PCs philosophically believe that affordable housing is not a prudent use of resources and that the market can solve the supply and price problems.

NDP Candidate Andrea horwath

NDP Candidate, Andrea Horwath

NDP: The NDP have released a platform which heavily focuses on investing in affordable housing. Close collaboration with Justin Trudeau’s Liberals on meeting a national affordable housing plan’s targets would likely be sought out. The NDP would also take a greater hand in mandating certain types of development, increasing tenant rights, and spurring densification. This would have certain short-term benefits but would also irk developers who would likely hold back on investment and see profits decreased. The last NDP government under Bob Rae built affordable housing spaces across the province, in rural and urban communities.

Liberals Candidate, Kathleen Wynn

Liberals Candidate, Kathleen Wynn

Liberals: A centrist approach would continue, with the government occasionally increasing involvement significantly and intervening (foreign buyers tax), with nods to the private sector and developers in balance. As the Liberal party and NDP are largely competing for the same pool of voters, the long term implications of a re-elected Liberal government would see an approach to real estate that would lean to more government intervention over the long term.