Evidence of meeting #68 for Transport, Infrastructure and Communities in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was cib.
A recording is available from Parliament.
11:30 a.m.
Senior Partner, Office Managing Partner for Canada, McKinsey & Company
They were McKinsey senior advisers, who, as Andrew alluded to, are contractors. They are not employees.
11:30 a.m.
Conservative
Leslyn Lewis Conservative Haldimand—Norfolk, ON
They are associated with McKinsey as senior advisers. You suggested that to the Infrastructure Bank. Is that correct?
11:30 a.m.
Senior Partner, Office Managing Partner for Canada, McKinsey & Company
In the spirit of being helpful to the Infrastructure Bank, we offered a set of names, which, should they meet the criteria of the CIB and should the CIB choose to hire them, as they were doing a search for risk management leadership and talent, they would have severed their relationship with McKinsey.
But it did not come to pass.
11:30 a.m.
Conservative
Leslyn Lewis Conservative Haldimand—Norfolk, ON
Thank you.
Mr. Palter, you had said there were 14 members of the advisory council. Is that correct?
11:30 a.m.
Senior Partner, Office Managing Partner for Canada, McKinsey & Company
That's correct.
11:30 a.m.
Conservative
11:30 a.m.
Senior Partner, Office Managing Partner for Canada, McKinsey & Company
To the best of my knowledge, it was all pro bono. Nobody got paid anything.
11:30 a.m.
Conservative
Leslyn Lewis Conservative Haldimand—Norfolk, ON
Were any of them associated with McKinsey? Were there McKinsey advisers on that council?
11:30 a.m.
Senior Partner, McKinsey & Company
I can clarify that.
McKinsey provided pro bono support, as I suggested in my opening statement, to the growth council.
The 14 members were private individuals. One of them included our former managing partner, Dominic Barton.
11:30 a.m.
Conservative
Leslyn Lewis Conservative Haldimand—Norfolk, ON
That growth council is what informed the growth fund, the $10-billion McKinsey growth fund. Is that correct?
11:30 a.m.
Senior Partner, McKinsey & Company
Mr. Chair, respectfully I don't think that's accurate.
11:30 a.m.
Conservative
Leslyn Lewis Conservative Haldimand—Norfolk, ON
You're saying that the letter of February 22 sent from the CEO Mr. Cory on page 3, where he says that the work informed the CIB's three-year, $10-billion growth council is incorrect information?
11:30 a.m.
Senior Partner, McKinsey & Company
We may be confusing two events. I thought the question earlier was about the growth council, which was 14 individuals who made recommendations to the minister of finance. The government of course passed legislation for the Infrastructure Bank. We did do work in 2018 and in 2020. I think you're referring perhaps to some of the work in 2020 that my colleague Mr. Palter—
11:30 a.m.
Conservative
Leslyn Lewis Conservative Haldimand—Norfolk, ON
In 2020, it said that the work that McKinsey did informed the $10-billion growth fund. Is that correct?
11:30 a.m.
Senior Partner, Office Managing Partner for Canada, McKinsey & Company
That's not correct. Our work in 2020 was associated with the onset of COVID. At the time, if we cast our minds back, when COVID hit, the infrastructure industry, like just about every other industry in this country, was turned upside down. Projects were being stopped. Labour was not working. People couldn't get on job sites. Supply chains were interrupted. There was a question about how the CIB should respond to that given its mandate to try to support Canadian infrastructure.
11:30 a.m.
Liberal
The Chair Liberal Peter Schiefke
Thank you, Mr. Palter. Perhaps Dr. Lewis will ask a follow-up question in her next round.
Next we have Mr. Iacono.
Mr. Iacono, you have the floor for six minutes.
11:30 a.m.
Liberal
Angelo Iacono Liberal Alfred-Pellan, QC
Thank you, Mr. Chair.
My first question is addressed to my honourable colleague Ms. McKenna and to Mr. Palter. Could you please comment on Canada's infrastructure gap in general, and on why attracting private investments and private-public partnerships are key to addressing these needs across Canada?
11:30 a.m.
Senior Partner, Office Managing Partner for Canada, McKinsey & Company
I'm sorry, Mr. Chair. Should Minister McKenna answer that question?
I'm not quite sure what the protocol is when a question is asked of two people simultaneously.
11:30 a.m.
Liberal
The Chair Liberal Peter Schiefke
I believe Mr. Iacono was looking at you, so we'll go to you first, Mr. Palter, and then we'll go to Ms. McKenna.
11:30 a.m.
Senior Partner, Office Managing Partner for Canada, McKinsey & Company
That's great.
This is an interesting question and a really important question.
11:30 a.m.
Liberal
11:30 a.m.
Senior Partner, Office Managing Partner for Canada, McKinsey & Company
It's maybe why we're here discussing this. I think, as everybody on this committee recognizes, there's a pretty significant infrastructure gap in Canada, and I hope everybody on the committee also recognizes that there's a very direct link between the status of our infrastructure, the economic growth in Canada and the competitiveness of our country globally.
The issue we face in resolving that is a very complicated one. Financing is part of the answer to that problem. It is not exclusively the answer to that problem. Infrastructure projects come in all shapes, colours and sizes, and they require very different solutions in terms of how you finance them, how you construct them, how you deliver them and how you operate them.
Private capital is one of the ways in which to address that. It is part of a solution set. It's not the only answer. It is part of a solution set, which applied in the right situation for the right project can be incredibly powerful and produce wonderful results. In certain circumstances, projects should be funded by the government. In others, there's probably a case to be made that the private sector should do it. The case for it, as I alluded to in my opening remarks, is that government has finite financing capacity. The government has finite funding capacity, and the government has a choice. It's a policy choice that the government has to make as to where it puts its limited capital to get the most benefit for the country.
There's an interesting question, which is this: Should the government use its financing and funding capital to support nation-building projects that can't be financed in the private markets, and let the private markets finance projects that can be funded in the private markets?
11:35 a.m.
Liberal
11:35 a.m.
Former Minister of Infrastructure and Communities, As an Individual
That's a great question. I'm going to take it down a notch and talk about what I saw as infrastructure minister.
I would meet with mayors and premiers across the country, and I would meet with folks who were in the private sector and the public sector. Everyone talked about more infrastructure. They always wanted more infrastructure built, and the reality is that there are limited taxpayer dollars. There was a huge amount of money invested in infrastructure through the investing in Canada infrastructure program. A huge shout-out goes to my former colleague, Minister LeBlanc, who recently announced that all of that money had been allocated.
There are projects going ahead across the country. Money was invested in infrastructure. They did the gas tax fund. However, the reality is that there are just not enough public dollars to build the infrastructure that we need. That means clean water, that means the clean energy future that we need, that means electric buses, that means green infrastructure and that means adapting to the impacts of climate change. There is a model that can work, not for all projects but for specific projects, in which the Canada Infrastructure Bank has a role to play and whereby we can get more infrastructure built in the public interest.
That's the whole point. It's about being mindful of taxpayer dollars. I'm someone who really believes one dollar has to be stretched as far as it can.
The model here is.... You heard on Tuesday from Ehren Cory that $9.7 billion of investment capital from the Canada Infrastructure Bank delivered an investment value of $27 billion. I think we'd be hard-pressed to find Canadians who would think that it's a bad thing to get more electric buses. In fact, we should be extremely proud that Canada is probably one of the world leaders in getting electric buses to municipalities across the country through a partnership with the Canada Infrastructure Bank. It's a smart model. It's not for everything, but there's a limited amount of money so we need to figure out how to stretch it.
By the way, there's a huge race on, and we've seen that with the Inflation Reduction Act. We need all hands on deck and every tool possible, and the Canada Infrastructure Bank is one of those tools.
11:35 a.m.
Liberal
Angelo Iacono Liberal Alfred-Pellan, QC
Thank you.
Mr. Palter, I have a follow-up question. By attracting private investments and private-public partnerships, how does that affect Canadian taxpayers?
Give a quick answer, please.