The name SNC-Lavalin looks on the surface like a modern corporate construct, a jumble dreamed up by a modern marketing team to brand some of Canada’s biggest construction projects – a mark now tainted by a recent history of graft and corruption.
However, behind the abbreviation are names that hark back to French-speaking business and engineering pioneers who elbowed their way into corporate power when they rarely made such inroads. The five men at the origin of SNC-Lavalin spawned generations of francophone corporate leaders and engineers in a legacy that still resonates in Quebec.
Criminal and civil corruption cases and a dropping stock price have exposed SNC-Lavalin to the risk of takeover, but the Quebec government is clear: It will do whatever required to keep the company based and controlled in the province. Opposition parties, along with the governing Coalition Avenir Québec under Premier François Legault, have united to say they will protect the company because it is a flagship of the economy, a major employer and an investment for the province’s biggest pension fund.
If Quebeckers oppose such a move, they have yet to show it.
The company employs more Canadians outside Quebec (5,100) than in the province (3,400), but there is no major defence of SNC in the rest of Canada. As with Bombardier and a handful of other Quebec companies, SNC-Lavalin has a special place in the province’s psyche, both for current importance and as a corporate vanguard from the days when French speakers were frozen out.
“There’s a colourful history and long legacy for French Canadians, for Quebeckers, in that name, as well as a key role in Quebec’s economic development,” said Michel Magnan, a professor of corporate governance at Concordia University’s John Molson School of Business. “It’s beyond the firm. It’s a whole galaxy of engineering they created.”
It started with Arthur Surveyer – the "S" in SNC – a soft-spoken francophone whose father made sure he also spoke English before he enrolled in engineering at École Polytechnique in 1898. He started out as a federal civil servant and in 1911 returned to Montreal to launch one of Canada’s early private firms for civil engineering – a profession previously dominated by the military and civil service.
A few years later, Emil Nenniger and Georges Chênevert joined the firm and together they would build hydroelectric dams in Quebec and British Columbia, and pulp mills, buildings and bridges across Canada.
Behind them in the 1930s came Jean-Paul Lalonde and Roméo Valois, who capitalized on the ambition of Quebec’s powerful long-time premier, Maurice Duplessis, to build highways and bridges. (Under Bernard Lamarre, Mr. Lalonde’s son-in-law and successor, the company came to be known as Lavalin.)
In a bit of history embedded in corporate lore, the government lagged paying a $100,000 bill for the 1938 construction of the paved highway to Mont-Tremblant. Knowing Mr. Duplessis took a weekly Friday train from Quebec City to Trois-Rivières, Mr. Valois boarded for several weeks running until he figured out a way to get a seat next to Mr. Duplessis. The engineer impressed upon the Premier the quality of the work and the importance of the debt.
The bill finally was paid.
The two companies were turbocharged by the baby boom, the Quiet Revolution and vast government spending. Mandatory education meant school construction. Universal health care spawned hospitals. The advent of the automobile brought bridges, tunnels and a freeway system. Then, the granddaddy of public works: Electrification, the creation of Hydro-Québec and the ocean of concrete poured into dams across Northern Quebec. They took their expertise global, building a dam in India, a cement plant in Algeria and a zinc smelter in Turkey.
In 1962, “the president of CN famously said he couldn’t find qualified francophones to be VPs of his company,” said Karl Moore, a professor at the Desautels Faculty of Management at McGill University. “These men went out and showed the world the Québécois could build global firms. French Canadians did that.”
By the 1970s, Quebec’s separation movement gained popularity, with the Parti Québécois winning government in 1976 and calling two failed independence referendums in 1980 and 1995.
“A lot of companies moved out of Quebec to Toronto,” Dr. Moore said. “That was a lot of jobs, a lot of prestige. Ever since, headquarters have been an emotional thing in Quebec. It’s hard for Bay Street to understand that emotion.”
But both professors say on top of symbolism and emotion, HQs bring high-paying jobs and breed outside services in law, accounting and real estate. “Additionally, good companies become good corporate citizens. They chair United Way campaigns and buy tickets to fundraisers,” Dr. Magnan said.
SNC and Lavalin stayed devoted to Quebec, pursuing rapid expansion in the 1970s and 80s, building all manner of infrastructure around the globe.
But the ambition also brought misadventure. Lavalin tried to rescue Montreal’s Olympic Stadium construction and became part of the legend of the costly and corrupt debacle. Lavalin got into television (it founded the Weather Network), real estate and manufacturing. It even leased Airbuses to the Soviet Union. The company was on the verge of bankruptcy by 1991.
Despite brief forays into munitions and compact-disc manufacturing, SNC was a more conservative, healthier and smaller twin in 1991, when Robert Bourassa’s Quebec government intervened to save Lavalin.
Gérald Tremblay, then the Quebec Liberal industry minister, brokered a deal to allow SNC to buy the remains of Lavalin for $90-million, creating what was then the world’s fifth-largest engineering firm.
“It was unthinkable that Lavalin would fail without even trying to foster a merger,” Mr. Tremblay told The Globe and Mail at the time in an article that described him as Mr. Fix It. “Maybe it’s just a beautiful dream to create a world engineering power, but at least we’re trying.”
Mr. Tremblay went on to become mayor of Montreal, and 21 years later, in 2012, he resigned amid corruption scandals that cost taxpayers millions under his watch.
A subsequent public inquiry exposed a vast system of corruption in which Quebec construction and engineering firms rigged bids using bribes and illegal political contributions. SNC-Lavalin figured prominently.