21 mars 2019

« Quebec budget includes $1-billion to keep head offices, like SNC-Lavalin’s, in the province »

Les Perreaux et Nicolas van Praet | The Globe and Mail

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« The Quebec government has set aside $1-billion to encourage strategically important businesses to keep their head offices in the province, a measure Finance Minister Eric Girard says he could use to protect the Montreal executive suites of SNC-Lavalin Group Inc.

Mr. Girard announced the measure Thursday in his Coalition Avenir Québec government’s first budget, which hikes spending 4.7 per cent and relies heavily on increased federal transfers to keep a clean balance sheet.

The budget is light on details of how the government would execute the head-office plan. Budget documents say the government will strike a team “whose mandate will be to develop business intelligence in the field of head office protection.” Mr. Girard said details will be announced later by Economy Minister Pierre Fitzgibbon.

The retention of head offices has been a sensitive issue in Quebec since the 1970s, when companies fled the province amid a separatist movement and lagging economic prospects. Quebec independence is on the back burner, but the head-office issue reared up again after U.S. hardware giant Lowe’s Companies Inc. made a surprise bid for Quebec-based Rona Inc. and troubles mounted for SNC-Lavalin, the engineering giant facing corporate fraud and bribery charges after years of international scandal.

If convicted, Ottawa could ban the company from bidding on federal projects for 10 years. A ban in Canada would force the company to seek more work outside the country and throw into question its commitment to maintaining its headquarters in Montreal.

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Montreal’s Institute for Governance published a list in 2016 of 16 Quebec-based companies with more than $1-billion in revenue having no protection against hostile takeovers. Some of the companies on that list are almost certainly on Quebec’s current list of strategic firms, including grocer Metro Inc., aerospace training firm CAE Inc. and engineering company WSP Global Inc., said Yvan Allaire, executive chairman of the institute. Other companies that are integral to the economy likely include Alimentation Couche-Tard Inc., Bombardier Inc. and CGI Inc., which all have dual class shares as defences. »