It once seemed Canadian Prime Minister Justin Trudeau could do no wrong. He now finds himself at the middle of a corruption scandal that could derail his Liberal party’s electoral fortunes.

It all started as a small Cabinet shuffle coming after the resignation of the head of treasury board, himself the object of a potentially damaging shipbuilding scandal. That January day in 2019, as the minister of justice pulled up to Rideau Hall, political pundits expressed their bewilderment. After all, this was Jody Wilson-Raybould, Prime Minister Justin Trudeau’s prized high-profile female and Aboriginal from the West (Province of British Columbia). What was she doing there? It turned out that she was being demoted to the lower profile Veterans Affairs Ministry. Hours later, the other shoe dropped when the now former minister of justice made public a rather odd letter. In it, she defended each of her major decisions made during her time at Justice and revealing all of her fulsome accomplishments. A demotion followed by a self-serving message of accomplishment? Something was definitely up. Although the letter did not mention the SNC Lavalin file, it was lurking just below the surface.

Indeed, the crux of Minister Raybould’s anger was not only her demotion in Cabinet. It was about her decision not to accord SNC Lavalin a DPA (Deferred Prosecution Agreement) despite insistence from the Prime Minister’s Office (PMO) to that effect. SNC Lavalin, based in the Province of Québec, is a major infrastructure firm providing services in Canada and abroad and providing employment for approximately 9,000 Canadians. In the course of conducting a major infrastructure project in Québec, SNC Lavalin was charged with fraud under Canada’s criminal code. In order to defuse the crisis and ensure that the company could continue to bid on domestic contracts, the government of the day had proposed a DPA regime, not unlike those of other OECD countries such as the United States and the United Kingdom. In Australia, a DPA regime is also under consideration.

The benefits of a DPA are many. Corporate convictions are notoriously hard to obtain, requiring often long and costly judicial proceedings. Moreover, innocent parties such as workers who lose their jobs end up paying disproportionately if the company declares bankruptcy or is no long longer able to bid on international or domestic contracts.

As early as September 2018, the PMO began pressuring the justice minister to move forward with the DPA legislation, citing, in particular, the potential loss of jobs if she did not. According to Raybould, Trudeau called her citing the upcoming Quebec provincial election in October 2018 and the fact that as the deputy from Papineau, he was particularly interested in seeing the DPA through. Raybould continued to resist even stopping an internal memo in her Ministry from reaching the PMO on the SNC Lavalin affair.

Some of these noteworthy facts and alleged conversations were recorded in the Parliamentary Justice Committee, which, by February 2019, had been seized by the affair as opposition parties geared up for the fight. To make matters worse for the majority Liberal government, on 4 March, the newly minted President of Treasury Board and highly regarded Dr Jane Philpott offered her resignation from Cabinet citing a lack of confidence in the government’s conduct over the SNC Lavalin file. Testimony also unearthed the fact that the January Cabinet shuffle had been much more contentious than first thought. According to a senior PMO operative, Raybould was first offered and then refused the Aboriginal portfolio since it would amount to enforcing the reviled Indian Act on Aboriginals across Canada. The question left unanswered is whether this was an attempt by PMO to deliberately put Raybauld, herself an Aboriginal MP, in a very awkward position. In any event, she refused the first offer of a Cabinet post and took the lower level Veteran’s Affairs one. Throughout the course of the scandal, Justin Trudeau’s affirmations have been contradictory and his recollection of the story is has been different each time. The appointment on 19 March of a former Liberal Cabinet Minister to delve into issues raised by the scandal is an effort to distance Trudeau from the political toxicity but is unlikely to defuse the imbroglio.

As for Raybould, she points to the ambiguous role of the minister of justice vis-à-vis her Cabinet responsibilities while using the separation of powers as her justification and repudiation of PMO pressuring the independence of her office. One wonders whether it is not the supremacy of the judicial branch that she is promoting rather than any checks or balances on her own power as the chief judicial officer being seated in the legislative branch. Neither participant appears interested in pointing out the fundamental ambiguity of the British parliamentary tradition, which legitimizes this practice and provides the conditions for these types of crises to arise.

For the Liberal government of Justin Trudeau, the scandal is already politically costly with a federal election due by October 2019. It could not have happened at a worse time. The two female Cabinet ministers who resigned were both superior Ministers. Their departure upset the gender equilibrium in Cabinet and challenged Trudeau’s supposed priorities to support women and Aboriginals. Oddly enough, both women are staying in the Liberal caucus (Raybould has ditched her Veterans Affairs portfolio) and appear ready to run as Liberal candidates in the next election. Throughout the country, the polls indicate a significant loss of support for the Liberals, especially in Western Canada and Ontario. Polls also indicate that Trudeau’s “sunny ways” form of leadership is under pressure as the heady days of 2015-6 seem like a far-away dream.

Nationally, the SNC Lavalin scandal has exacerbated the old wound of French Québec versus English Canada (the rest of Canada – ROC). Media outside of Québec has pounced on the opportunity to bash Québec by associating the province with a culture of corruption and scandal. The newly elected majority Nationalist government in Québec has taken the opportunity to address a series of demands for additional powers to the federal government in Ottawa to the great dismay of the ROC. The lines have been drawn and Trudeau, the deputy from Papineau (Montréal) has now tarnished his image as a neutral fair play leader in the minds of most Canadians.

Does the SNC Lavalin scandal spell the end of Trudeau’s Liberal majority government? Before the scandal’s outbreak, the Liberals already knew that there would be losses to the Conservative Party throughout the ROC. However, Québec was to be their saving grace. Abandoning SNC Lavalin in their time of need would amount to political suicide in Québec. Standing by them and supporting the request for a DPA might not be enough to save them in Québec where the nationalist pro-sovereignty Bloc Québécois is regaining strength.

Some of these questions will be answered in the near future as the scandal continues its swath through the political classes. There is a new justice minister from a Montréal riding (electorate) who may well be more amenable to moving forward with a DPA. This week, the Justice Committee in parliament will meet behind closed doors and decide whether to invite the ex-Justice Minister to testify again. Her first appearance before the committee for four hours was extremely well documented and damaging to the Liberals. The Liberals may well move to quash that notion using their superior numbers. There is a risk either way. Both Raybould and Philpott are still both in the Liberal caucus free to do further damage.

Expelling these two women from caucus would be tantamount to reneging on key Liberal Party policies, priorities and electoral promises just months before an election. Such an act would likely bring about a hue and cry of immense proportions given the stature and experience of these two people. Too tough to expel, yet too smart to ignore.

Justin Trudeau has met his match in the SNC Lavalin scandal and its radioactive fallout.

Dr Bruce Mabley is the director of the Mackenzie-Papineau Group think tank based in Montreal devoted to analysis of international politics. He is a former Canadian diplomat and academic who has written a number of analytical and academic texts. In 2002, he was decorated by the French Republic as Chevalier des Palmes académiques.

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