SNC Lavalin subsidiaries, including Ontario division, barred from public contracts in Quebec for five years

A Quebec oversight body has blacklisted four subsidiaries of SNC-Lavalin Group Inc. from bidding on public contracts in the province for five years.

The ban by the Autorite des marches publics was triggered after the engineering giant's construction division pleaded guilty in December to one count of fraud in connection with business dealings in Libya.

An SNC-Lavalin spokesman said the company's shift away from large construction contracts toward its engineering roots minimizes the potential damage of a bidding ban.

“While it is possible that the guilty plea by the subsidiary may present risks in the near-term, the company believes these risks will be manageable and does not anticipate that the plea will have any long-term material adverse impact on the company's overall business,” spokesman Nicolas Ryan said in an email.

Barred from public procurement bids until January 2025, the four subsidiaries are SNC-Lavalin Exploitation as well as SNC's Quebec, Ontario and Atlantic construction divisions.

The plea deal with federal prosecutors included a $280-million fine and capped off a scandal that tarnished the Montreal-based company's reputation and ensnared the highest office of the Canadian government.

It also freed SNC-Lavalin from the damaging prospect of a ban on federal contract bidding.

Nearly one-third of SNC-Lavalin's $9.3 billion in revenues in 2017 came from Canada, down from roughly 60 per cent of revenue in 2014. Analysts estimate that up to one-half of home-turf revenues stem from federal contracts, and a smaller portion courtesy of Quebec.

The oversight body added the SNC subsidiaries to its list of ineligible companies Wednesday.

Established in 2018, the blacklist aims to "prevent, combat and punish certain fraudulent practices in the construction industry," according to the authority.