Government Operations Committee on March 29th, 2023

[Robert Palter]

This is another really important question.

There are many different varieties of advisers. McKinsey, as an adviser, believes in helping its clients improve their performance and helping them on their own. In every mandate that we take on there is an element in it of building skills. Whether that's taking people we're working with to training programs or bringing training programs to them, exposing them to global best practices or coaching them on the job with experts, it's always a part of our work with our clients to help build their capabilities so they can continue to improve without us.

[Joanne Thompson, Liberal, St. John's East, NL]

Thank you.

[The Chair, Conservative, Kelly McCauley]

I'm afraid it's past the time.

We have Ms. Vignola for two and a half minutes, please.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Thank you very much, Chair.

I will continue along the same lines, Mr. Palter.

You say you provide training so that officials can do the work and then take over. Yet these same officials said they had no choice but to use McKinsey because McKinsey has a brand name, milestones and information that they could never obtain and that they were ultimately dependent upon them from contract to contract.

Do you see a contradiction there?

[Robert Palter]

I'm sorry, Mr. Chair, but I didn't quite understand the question. Could you just ask it again?

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

On the one hand, you’re telling us that you provide training so that officials are able to take over once the contract has ended.

On the other hand, those same officials are telling us that they have no choice but to use McKinsey because you have unique milestones and information that they can’t collect.

Isn’t there a dichotomy or a contradiction there?

[Robert Palter]

Okay, now I understand the question. Thank you.

I don't believe there's a dichotomy, because when we talk about the tools or the data or the capabilities that we provide, McKinsey is not a software service provider. We don't try to set up sustaining licensing contracts with clients. That's not what we do.

We bring our knowledge. We bring our expertise. We help train. We help upskill. We help implement. Then we look to our clients and say that a critical part of our value proposition is that they are able to continue doing what they're doing when we leave.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

You were awarded contracts by the Department of National Defence and you also provided advice to defence companies in the U.S. and elsewhere.

You were once asked how you ensured that data was not being shared by one country with another. I understand that your brand is trust. Nonetheless, in one McKinsey submission, I read that you do not offer customized solutions, but rather an evidence-based process and methodology that rely on data from far and wide.

So I wonder where the line is drawn. How much can a client consider that they are receiving customized service, as opposed to a service that consists of identifying positive features from multiple countries?

[The Chair, Conservative, Kelly McCauley]

I'm afraid that's our time, Ms. Vignola.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Thank you.

[The Chair, Conservative, Kelly McCauley]

Perhaps you can get back to us in writing, or in the next round.

We have Mr. Johns for two and a half minutes, please.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Thank you.

You said that McKinsey hasn't been involved in staffing plans. Is that right?

[Robert Palter]

It hasn't been involved in staffing...?

[Gord Johns, NDP, Courtenay—Alberni, BC]

I mean staffing plans within the federal government.

[Robert Palter]

To the best of my knowledge, that is correct.

[Gord Johns, NDP, Courtenay—Alberni, BC]

Okay. We have a specific instance, and maybe you can help me. It's where McKinsey developed.... Basically there were documents we had from Canada Post that revealed that McKinsey was contracted for service digitalization, which you spoke to earlier and said how important that is. Right here in the 2013 “Five-point Action Plan: Ready for the Future”, it says, “Canada Post expects to continue to reduce its unionized workforce by at least 10 per cent over the next 10 years.”

This was something that McKinsey, in a report that they drafted.... Was it McKinsey or was it Canada Post that raised the desire to get rid of unionized workers?

Are any of your employees unionized?

[Robert Palter]

I don't know the specifics of that email. I'm not entirely sure where it came from.

[Gord Johns, NDP, Courtenay—Alberni, BC]

It's a plan that McKinsey helped develop.

[Robert Palter]

As I said, I don't know the specifics of that situation. My best interpretation of that is the development of the plan, working together with Canada Post....

[Gord Johns, NDP, Courtenay—Alberni, BC]

The plan comes up with a goal to reduce the workforce by 10% over the next decade.

There was a European report in 2017 called “The Big Four”. I don't know if you're familiar with it. It's the largest global accounting firms, which they say are overrepresented in tax havens such as the Cayman Islands and Bermuda.

Are you aware...? Does your company have a disproportionate number of offices in tax havens?

[Robert Palter]

McKinsey takes paying taxes in all the jurisdictions in which it operates very seriously. We pay taxes in all the jurisdictions in which we operate and—

[Gord Johns, NDP, Courtenay—Alberni, BC]

Do you have offices in tax havens? Do you have any offices in locations that aren't disclosed on your website? If so, can you identify which ones and where they are?

[Robert Palter]

Mr. Chair, I'm here to talk about our work with the Government of Canada.

To the best of my knowledge, all of our locations are listed—

[The Chair, Conservative, Kelly McCauley]

Your time is up anyway, if you want to briefly finish up.

[Robert Palter]

To the best of my knowledge, all of our locations are listed on our website.