Government Operations Committee on June 10th, 2024

[Larry Brock, Conservative, Brantford—Brant, ON]

Sure.

This brings me to a potential criminal charge of breach of trust under section 336 of the Criminal Code, a straight indictable offence punishable by a maximum of 14 years. The elements are there such that, potentially, someone who made the decision to favour McKinsey in a broad range of departments and Crown corporations could be held liable for the actions they took.

Did you direct your mind at all to the potential that there should be a breach-of-trust investigation by appropriate law enforcement?

[The Chair, Conservative, Kelly McCauley]

Please provide a very brief answer.

[Andrew Hayes]

Given the origin of this audit, we were looking for whether or not there was direction or political interference. We did not see it in this audit. If there had been a concern around improper use of public funds in a way that could have been criminal, we would have referred it to the RCMP.

[Larry Brock, Conservative, Brantford—Brant, ON]

Do you agree with the delegation of authority, though?

[The Chair, Conservative, Kelly McCauley]

I'm afraid that is your time, Mr. Brock.

Mr. Kusmierczyk.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

Thank you, Mr. Chair.

Along the same lines of what my colleague has stated, we are absolutely always concerned about making sure that public funds are used appropriately, which is why we were so disappointed that the Conservative Party was using tens of millions—if not hundreds of millions—of dollars of public funds for political events, to pay for the travel of themselves and their spouses to political caucuses, which everyone knows is absolutely wrong. I just wanted to get that on the record.

Ms. Hogan, we know how important the independence of your office is to do your work. We know that it's important. This allows your work to move forward unimpeded. Last week, the Conservatives put forward a motion requiring your office to produce documents in your possession. How does ordering your office to do this impact your ability to fulfill your mandate and conduct your audits?

[Karen Hogan]

Mr. Chair, I believe the member is referring to the motion in the House that is, I think, being voted on later on today.

In my view, including my office in that motion was unnecessary. I made it clear last week that I would co-operate with the RCMP if they felt it necessary to come to my office and ask for information. We have a well-established procedure that has worked effectively in the past, which includes their providing me with a production order should they want to have access to my files. I believe the motion does impede my independence, in that I don't need to go through the law clerk. I have a proven track record that I am co-operative with and supportive of parliamentarians, and that I would co-operate very swiftly with the RCMP if the need arose.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

I very much appreciate your response.

Madam Auditor General, I just want to say that all of us here on this side of the table so appreciate your work. We trust the work you do. It's very important. I wanted to thank you for your time here today at committee. We are listening very attentively to what you are bringing forward here.

Unfortunately, my Conservative colleague across the way is tweeting on social media as we speak and while you are giving your testimony here, which I think shows you just how seriously—or unseriously—they're taking your testimony today.

Madam Auditor General, you mentioned the fact that you looked at 97 contracts. You only found one contract where there was any ministerial involvement, and that's simply because the value of the contract exceeded a certain threshold.

What percentage of the contracts you looked at had zero ministerial or political involvement?

[Karen Hogan]

If it's one out of 97, I'm not a calculator, but I'm going to say that almost 99% of those contracts did not involve ministerial interference.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

That is, 99% that did not have any ministerial involvement. I really do appreciate your providing that information for us. I do hope that information makes it to my Conservative colleague's social media platform, because that is important information to know.

You talked about what is driving the behaviour of public officials and public servants. Why do some public officials keep going back to the same well, or a certain company or a certain contract?

[Karen Hogan]

That's a difficult question to answer.

I think we saw, in some of the contracts we reviewed, that they felt that once one contract had been issued, McKinsey would then have knowledge of the business, which then justified their being more efficient and effective in future contracts. But I think that could be said about any vendor. That's why I do believe that the first requirement to determine exactly what you're hoping to accomplish with a procurement process is that it is well thought through and well documented. Then you pick the most appropriate tool that is available—and sometimes they are competitive and sometimes they are not—to accomplish that outcome.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

You mentioned the fact that the Department of Natural Resources was one of the departments with a clean bill of health. Are you able to tell us what they did well? In your report, you talked about what the other departments did not do so well. Do we know what Natural Resources Canada did well?

[Karen Hogan]

I'm going to give a really quick answer and see if Nick wants to add anything, but I would say they followed the rules well.

[The Chair, Conservative, Kelly McCauley]

That was my answer, Madam AG.

Mr. Swales, do you have a brief response?

[Nicholas Swales]

I have nothing specific to add beyond that. That was what they did.

[The Chair, Conservative, Kelly McCauley]

We'll go to Mrs. Vignola.

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

Thank you very much, Mr. Chair.

Ms. Hogan, I'd like to come back to two aspects you mentioned earlier. You said that we sometimes need people from the private sector to do a good comparative analysis. However, many of the 340,000 federal public servants come from the private sector. Why aren't we using their expertise?

You also said that government has a great opportunity to learn. But this isn't your first report on procurement issues, and others have submitted some as well. Moreover, Canada's contracting history goes back a long way.

Why, over the years and decades, has Canada failed to resolve recurring problems concerning procurement, such as those related to the justification of decisions leading to the awarding of a contract?

It amazes me that, after all these years and given all this experience, the government is still at the point where it doesn't justify its decisions.

Could you explain this to us?

[Karen Hogan]

I, too, am a bit puzzled by this. In my opinion, these are basic rules, and they should be followed in contracting.

As for not using the expertise that exists in the public service, I think this is a pertinent question and the answer varies from one department or agency to another. Some follow the rules well, others not so well. Examining just 97 contracts probably doesn't give a good picture of the situation with regard to all of the decisions made by the government.

There are many rules, and staff turnover is such that there should always be training. At my office, training is given to anyone who has to draw up a contract if they don't do it every day.

In fact, I encourage government departments and agencies to do so too. You have to be on top of the rules, and you have to follow them every day.

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

Thank you.

[The Chair, Conservative, Kelly McCauley]

Thanks very much.

Mr. Bachrach, go ahead, please.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you, Mr. Chair.

Ms. Hogan, in the four of the 28 contracts in which the process appeared to be designed and implemented to favour McKinsey, I'm wondering if your office could provide the committee with some direction as to whom we might call before the committee to ask about the reasons for those decisions.

[Karen Hogan]

I guess we could give you the names of the departments that were involved in those and then....

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

It requires a bit of forensic work on our part to figure out which individuals were actually involved. I think getting to the bottom of the motivation is really a key step in order to fix it.

Are all four of them McKinsey alum? Do any of the four of them actually understand the rules that they were supposed to be following?

These are all questions that are probably relevant to trying to plug the hole in the ship.

Is that information that your office can provide?

[Karen Hogan]

Mr. Chair, we can provide the departments involved in those four contracts and the dates of those four contracts.

One of my previous comments was that there are 97 here and there are probably 97 unique differences. That's something to bear in mind as you go through this. Every contract has some uniqueness or some story around it.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

You made a comment about having a checklist, essentially, and having each individual who's responsible for the procurement process go through a checklist and make an attestation that they followed all the required steps.

It seems like such a simple fix. I find it a bit bewildering that these individuals, some of whom are paid hundreds of thousands of dollars to ensure that the public gets value for money and that all the rules are followed, need a checklist to make sure they didn't skip any steps. It seems like they're not even aware the steps exist.

If the fix is so simple as a checklist, why wasn't this done years ago?