Government Operations Committee on April 29th, 2024

[Charles Sousa, Liberal, Mississauga—Lakeshore, ON]

Thank you, Mr. Chair.

Thank you, both, for being here.

It's very important work that you're doing. We all recognize that we have to do better. It's been decades. It's not just the Government of Canada; it's all levels of government. It's prevalent throughout industry and in other jurisdictions around the world.

I think you can speak to some of that and we would welcome your comparison as to what's happening here and what we are doing now to try to overcome those challenges, challenges that you have rightly stated. These are challenges, I think you have also noted, you're working collaboratively with government to try to resolve. It's in government's interest, it's in all our interests, to see resolution to these matters. I'm interested in the way that some of the questions are being posed to you. I've been very interested throughout these deliberations. One of them is really interesting.

It's like, can any one of our committee members commit a crime?

Is anybody in this room able to commit a crime?

What's your opinion on that? Yes or no?

[Alexander Jeglic]

Yes.

[Charles Sousa, Liberal, Mississauga—Lakeshore, ON]

There you go.

Does that make it so?

Have there been any criminal activities under your investigation?

[Alexander Jeglic]

We did not see any.

[Charles Sousa, Liberal, Mississauga—Lakeshore, ON]

Did you see elected officials in this government creating corruption in this process?

[Alexander Jeglic]

The only instance that we saw political actors' involvement was in that one instance.

[Charles Sousa, Liberal, Mississauga—Lakeshore, ON]

Have there been any forgeries committed during your investigations?

[Alexander Jeglic]

Unfortunately, I would not be the adjudicator to determine that. We have not referenced anything to the RCMP.

[Charles Sousa, Liberal, Mississauga—Lakeshore, ON]

That's my point exactly. We are not the judge. We are not the jury. We shouldn't be the executioner here. We need to go through the proper process to deliberate over these very issues, which you have done very effectively. You provided some great recommendations. Those recommendations have been applied and have been recognized by government.

Some of them that you've discussed are in respect to the vendor performance framework. I think we've tried to identify some of that issue.

When you look at all the work that McKinsey's been doing, and you look at the extensive work it does across other parts of the world, has it underperformed?

[Alexander Jeglic]

Again, I'm not able to evaluate McKinsey's performance, and I think it actually underscores the vendor performance management framework point. The point is that, yes, there have been notations made on files that indicate that it has a positive reputation, but certainly we didn't assess McKinsey's reputation.

[Charles Sousa, Liberal, Mississauga—Lakeshore, ON]

I want to ensure that the government doesn't have repeat procurement of poor performers. I think that was what you said that today. You want to avoid poor performers. You want to ensure that we have evaluation systems that identify those strong performers and legitimate organizations with integrity.

Could you explain to me the lobbying efforts that happen everywhere with respect to trying to enable suppliers to come forward in regard to sourcing opportunities with government?

How does that work?

[Alexander Jeglic]

Again, I'm probably not best positioned to explain how lobbying works in procurement.

However, I do know that there is in fact lobbying. There is a Lobbying Act, whereby people are required to register interactions with senior-level government officials. I think there's a registry that one could consult, so you would be able to see exactly who is lobbying and when.

[Charles Sousa, Liberal, Mississauga—Lakeshore, ON]

The reason I'm asking is that one of the things you've identified is, how can we help suppliers get in on these deals? How can we grow some of the Canadian small businesses and entrepreneurs especially to tap into the opportunities to bid on contracts?

With that comes the requirement to help with understanding, laying the groundwork and navigating through the complexity of government systems. Some of the recommendations being suggested here are, on the one hand, from some who are saying that government is way too big: cut staff, cut departments, stop hiring all these people. On the other hand, others are saying: “Hey, maybe we don't have enough. Maybe we need to have more internal individuals doing these contracts.”

On the skill sets, on the degree of change that occurs in this business, explain to me how nimble government can be if it doesn't rely on some of these contractors.

[Alexander Jeglic]

I think that underscores a great point, which is the importance of training public service officials.

I will say that recently I've personally encountered two training programs that I think are particularly strong within PSPC and also within DND. They have a one-year program and a four-year program for procurement officials, whereby they can participate actively in experimental training. They get insight into a variety of different transactions early on in their career. I see that as a seminally important thing. Training of public servants in procurement is incredibly important.

[The Chair, Conservative, Kelly McCauley]

Thank you.

Mr. Genuis, please go ahead.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Thank you, Chair.

We've established that this government had a structural favouritism for McKinsey in terms of its contracting. Now, that exists in a context of—we've discussed it at this committee—some of the real, horrific abuses that have happened at the hands of McKinsey: advice related to supercharging the opioid crisis; advice on how to identify influential dissidents of the Saudi regime; some of the state-owned companies in the PRC that McKinsey did work for; continuing work for the Government of Russia following the initial invasion of Ukraine in 2014; and advising employees about not participating in pro-democracy activities in Russia, for instance.

There are many of these different issues, so I'm grappling with this reality of deeply unethical behaviour by McKinsey and, at the same time, how it was favoured by the Government of Canada. Did you look at all at the relationship between ethical conduct and favouritism for a company? It's one thing for decisions to be made about a company being excluded or not. It's a whole other thing about a company that behaves in the way McKinsey does actually being favoured by the Government of Canada.

[Alexander Jeglic]

None of the lines of enquiry actually looked at the ethical behaviours of McKinsey.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Okay. Could you comment, then, on the integrity regime system in particular?

Do you think there should be a blacklist? Do you think there could or should be a process where, in the context or procurement, officials are looking at the nature of the company they're dealing with and whether it has the kinds of values that we would actually want informing advice in government? Do you think that's something that could or should be built into a procurement process?

[Alexander Jeglic]

Absolutely, I support an integrity...and a strong integrity regime where that is something that's contemplated. I hate to sound like a broken record today, but it goes hand in hand with the vendor performance management framework as well, because the regime you refer to kind of speaks to criminal investigations and, ultimately, convictions, and what the implications would be to those suppliers.

What I'm talking about is even more broad. If, for example, a company promises to deliver something by a certain date and doesn't deliver, I would still argue that there's an ethical component to that, and, where it hasn't delivered, there should be a consequence to it. I support what you're suggesting.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Thank you.

Of course, you're looking at the Government of Canada, not at McKinsey. You're not evaluating its ethical conduct. You're evaluating the government's approach to procurement.

Were people in government asking these kinds of questions about McKinsey? Was that part of the thought process or the deliberation that was happening, or was that not on the table or on the radar screen at all?

[Alexander Jeglic]

I will answer to the best of my knowledge, and I'll ask Derek as well. To my knowledge, we didn't see anything in the documentation speaking to the ethics of McKinsey and Co., but I'll let Derek confirm.

[Derek Mersereau]

I agree.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Thank you, Chair.

I'm going to use the balance of my time now to move a motion that I put on notice with respect to EV battery manufacturing facilities. I believe that you have that as the first motion that I put on notice. If we're cleared to go, then I'll proceed to speaking to the motion.

[The Chair, Conservative, Kelly McCauley]

Go ahead for the first motion.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Thank you very much.

Chair and colleagues, it is the firm conviction of Conservative members on this committee and beyond that the government should be transparent in its subsidy programs and that those subsidy programs should be aimed at opportunities, jobs and otherwise, for Canadians, yet we've repeatedly seen disserving revelations that this government's subsidy programs are directly resulting in the bringing in of foreign replacement workers. Canadian taxpayers are subsidizing foreign replacement workers because the government has not taken the steps to guarantee and protect jobs in Canada for Canadians.

With that in mind, Conservatives have put forward a clear and simple document production order. This is not about industrial operations or processes. This is about getting the contracts to allow us to see what the government did or did not do with respect to job guarantees. Do these contracts include real job guarantees? Do they include protection for Canadian jobs?

This is a simple document production motion allowing us to answer that basic question. Conservatives have been and will continue to be persistent in saying that the government should be protecting jobs for Canadians. We put forward this motion today to order the production of these contracts, so that we can see whether or not the government did anything and whether the government was concerned at all with the protection of jobs for Canadians. I hope that this motion will have the support of the committee.

Thank you.