Two years of hearings and probing into rampant corruption in public contracting in Quebec generated a national panel’s 1,700-page report on Nov. 24 and some 60 recommended procurement changes to boost ethics by project owners and contractors. Industry execs say the long-awaited Charbonneau Commission report did not disclose additional ethics bombshells beyond those relayed by some 300 witnesses between 2012 and 2014, but it already has pushed a tighter contract vetting process by both public- and private-sector participants.
Quebec provincial said they will move forward with report recommendations, which include the elimination of lowest-bid requirements, a ban on gifts to public officials, added whistle-blower protections and a new independent watchdog to oversee the process.
“Corruption was … more deeply rooted than we thought,” said Judge France Charbonneau, who led the estimated $45-million inquiry that involved hundreds of entities, from small municipalities to Canadian industry giants such as SNC-Lavalin and Genivar-WSP. In a statement, SNC-Lavalin described its boosted ethics program as an industry “benchmark,” but said it still seeks “a fair settlement” with Quebec officials of bribe-related charges against it.
“Nothing new was truly revealed in the report,” says Carlos Godoy, a Montreal consultant to industry groups such as the Consulting Engineers Council of Canada. But he adds that it “recognizes that the lowest bidder cannot be a sustainable way of selecting firms for projects.”
The panel also wants stricter rules to stop delays in payments to contractors that, it says, will encourage collusive agreements. “The pressure created by such a system incites contractors to devise schemes to recover their discounted profits,” says Canada-based law firm Borden Ladner Gervais.
The Charbonneau report does not urge the quality-based selection approach favored by industry, but “we are almost halfway there,” Godoy notes.
“While some recommendations could have far-reaching consequences, these are early days in terms of which ones will actually be adopted,” says Ontario-based AEC-sector analyst Maxim Sytchev of Dundee Capital Markets.
