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Legal Notes: ‘Valuable consideration’ needs to be given to Canadian legislation on bribery and corruption

John Bleasby
Legal Notes: ‘Valuable consideration’ needs to be given to Canadian legislation on bribery and corruption

Canada’s Criminal Code under the Competition Act is explicit when it comes to the penalties assessed to individuals for attempting to bribe or otherwise manipulate the construction process.

“Everyone is guilty of an indictable offence and liable to imprisonment for a term not exceeding 14 years.”

What is more nuanced, however, is the nature of what the code calls the “valuable consideration” offered in exchange for favourable treatment of some sort.

As Mark Kingwell writes in the Globe & Mail, “certain cases of purchased influence are obvious and clearly illegal.”

However, he points out the grey area example of access to public servants in government.

“Aggressive lobbying is ubiquitous in most political systems, even ones with otherwise strict anti-corruption laws.”

One would like to think of Canada as corruption-free, at least relative to other countries around the world. Yet, the Charbonneau Commission, formed in 2011 to investigate corruption in Quebec’s construction industry and possible ties to organized crime, put that myth to rest.

As reported in the Globe & Mail in July 2018, “the commission found that engineering and construction firms conspired with organized crime and civic officials to steer sewer, water, building and road projects and maintenance work such as snow clearing to firms that would kick back money and gifts to criminal organizations, politicians, political parties and corrupt bureaucrats.”

It was estimated in Montreal alone as much as $500 million in public funds were misappropriated from 2004 to 2009.

Bribery and corruption of officials with decision-making authority is not restricted to Canadian companies or individuals operating on Canadian soil. In a construction marketplace turned increasingly competitive around the world, the potential exists for foreign entities to attempt to win contracts in Canada using illegal methods.

However, Bruce Reynolds and Sharon Vogel of law firm Singleton Urquhart Reynolds Vogel LLP, speak to the nature of legislation put in place to protect against any foreign companies using illegal methods here in Canada, or against Canadian companies doing likewise internationally for that matter.

“Anti-corruption legislation in Canada exists to address both domestic and international bribery and corruption in the engineering and construction industry relating to procurement, misappropriation, fraud, asset misappropriation, and bribery of domestic and foreign officials,” they write. “The federal Competition Act makes it an offence to participate in arrangements such as bid rigging, bid rotation, cover bidding and market division in procurement of government construction contracts.”

At the same time, Canada has an open door regarding foreign competition in project bidding, notwithstanding any Canadian content requirements included in tendering requirements.

International agreements are in place for that reason: the Canada–European Union Comprehensive Economic and Trade Agreement; the Canadian Free Trade Agreement; and the Canada–United States–Mexico Agreement.

Yet, while offering “valuable consideration” to individual decision-makers is illegal, offering support in connection with political parties is not so clear.

“There is no express restriction under local law that prevents contractors or design professionals from working with public agencies because of their financial support for political candidates or parties,” write Reynolds and Vogel.

However, they also point out, “The Criminal Code states that it is an offence for a person or an entity, to retain a contract with the government, to directly or indirectly give any valuable consideration for the purpose of promoting the election of a candidate or party of candidates.”

Again, the question of “valuable consideration” arises. Outright gifts of cash can give way to more subtle persuasion: the promise of employment for a relative, a vacation trip, favoured entry to a private school?

Kingwell wonders how realistic current legislation regarding bribery and corruption actually is, particularly in terms of government.

“Equal access to government officials is not just dubious but fictitious, and transparency is too often a matter of narrative spin.”

It’s a slippery slope, he says. “Corruption is a species of virus. It invades cultures, and then becomes endemic, developing perverse incentives for previously honest brokers to indulge in it, for fear of losing out on advantage.”

John Bleasby is a Coldwater,-Ont. based freelance writer. Send comments and Legal Notes column ideas to editor@dailycommercialnews.com.

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