How SNC-Lavalin’s Ongoing Criminal Case Could Affect UBC’s SkyTrain Extension
From Parliament Hill to Cambie and 12th—it seems the SNC-Lavalin drama is making everyone think twice about their relationships.
April 17, 2019
Vancouver city council is set to vote on a motion asking for a review of its relationship with SNC-Lavalin, and how the Montreal-based engineering firm’s ongoing criminal case could affect plans for a SkyTrain extension between Arbutus and UBC.
To date, SNC-Lavalin has won every SkyTrain construction bid for Metro Vancouver’s regional transit lines. With the exception of the Canada Line, all SkyTrain projects have been delivered by the provincial government, meaning city council does not have a final say on who procures the project.
However, in her motion, “Review of the SNC-Lavalin Relationship with the City of Vancouver,” NPA councillor Colleen Hardwick points out that council rushed to endorse a SkyTrain Millennium Line extension to UBC—a project estimated to cost roughly $3 billion—in an attempt to secure federal funding that never materialized.
What did materialize, shortly after council’s endorsement, was a federal investigation into allegations that the Prime Minister’s Office pressured former attorney general, Jody Wilson-Raybould, to help SNC-Lavalin avoid criminal prosecution for alleged bribery and fraud.
The company has argued for an out-of-court settlement, known as a deferred prosecution agreement (DPA), but Canada’s federal court will likely proceed with a trial. A court conviction would bar SNC-Lavalin from bidding on government contracts for 10 years, and potentially force 9,000 Canadians to find new jobs.
Bombardier, the company that has built the cars used on Vancouver’s SkyTrains, is also being investigated for allegations of corruption.
“The fact that Vancouver would then become dependent on SNC-Lavalin and Bombardier, both of which have been embroiled in multiple criminal cases, would interfere with the planning of the proposed extension, not to mention adding to the already astronomical cost estimates,” says Hardwick. Due to Hardwick’s medical leave, the motion will be tabled on April 23, three weeks after council was initially set to vote on it.
But Vancouver mayor Kennedy Stewart insists that SNC-Lavalin does not have an exclusive contract for the engineering, procurement, construction, partial financing, operations or maintenance of the existing SkyTrain system.
“While the vehicles and technology must be tailored to each agency’s system, the automated technology at the heart of the SkyTrain system is not unique or proprietary—several companies can deliver rapid transit infrastructure and fleet,” says Stewart.
TransLink is due to report back to the mayor’s council on procurement options for the UBC extension project, but that will only give council an idea of the market—not the authority to pick a winning bidder.
Should either company be found guilty of their crimes, this would create financial issues for Vancouver, as transit planning would have to go through expensive changes to replace proprietary ART Movia metro technology.
TransLink’s Jill Drew says multiple companies, world-wide, have responded to TransLink’s request for information to explore procurement options. “While Vancouver was one of the first to use automated train control technology, it can now be found around the world.”
There are two main types of technology used in the SkyTrain system. The Canada Line operates as a conventional railway using Hyundai-built electrical multiple units (EMUs), while the Expo and Millennium Lines use proprietary ART Movia metro technology.
Hardwick says that while the technology is not proprietary, SNC-Lavalin and Bombardier hold proprietary patents on certain features of the SkyTrain system, giving them a competitive advantage when bidding on projects.
“To build cars to operate on the Expo and Millennium Lines, other companies must design a compatible car, safety-case the car with Transport Canada and install a production line,” says Hardwick. Currently, Bombardier is the only company that produces the cars used on the Expo and Millennium Lines.
“Thus Bombardier will always have the financial edge with the proprietary ART Movia system,” adds Hardwick.
Proprietary or not, SNC-Lavalin appears to have an advantage when it comes to its reputation. The company was previously selected by the B.C. government to be part of the teams that constructed the Expo, Millenium and Evergreen-Millenium Lines. SNC-Lavalin also beat out three qualified proponents to design, build, finance, operate and maintain the Canada Line for a 30-year period.
As recent as last month—despite being embroiled in criminal charges, at the centre of a political crisis, and not meeting the minimum technical score for the project—SNC-Lavalin won a $1.6-billion contract to extend a transit line in Ottawa.
Hardwick is concerned that the planning of Vancouver’s SkyTrain extension to UBC could become dependent on SNC-Lavalin and Bombardier. Should either company be found guilty of their crimes, this would create financial issues for Vancouver, as transit planning would have to go through expensive changes to replace proprietary ART Movia metro technology.
“I am hoping that this motion will instigate a deeper investigation of transit options and limitations, which will in turn present broader procurement options for distributed transit throughout the city,” says Hardwick, who is also a vocal opponent to subway technology, preferring the now rejected light rail transit option for the extension.
The Coalition of Vancouver Neighbourhoods (CVN) has already publicly supported her motion, encouraging council to approve it as proposed. “A $7 billion subway to UBC can buy a whole lot of other transit options for Metro Vancouver,” adds Hardwick.