Government Operations Committee on Jan. 30th, 2023

[Prof. Amanda Clarke]

No.

[Anthony Housefather, Liberal, Mount Royal, QC]

Mr. Boots, the same question is for you. Do you have any non-public information regarding the management of those contracts?

[Sean Boots]

No.

[Anthony Housefather, Liberal, Mount Royal, QC]

The motion that we passed—and again, it's not your fault at all—was that we would “undertake a study...regarding government consulting contracts awarded to McKinsey & Company by the Government of Canada, or any Crown corporation, since November 2015, examining their effectiveness, management and operation, including the value and service received by the government”.

It would seem to me that you would be unable—and I would right now—to distinguish the value received from contracts with McKinsey from the value received from contracts with Deloitte or the value of any other management consultant, because you don't have the specifics related to each of those contracts right now.

Would that be correct, Ms. Clarke?

[Prof. Amanda Clarke]

Yes, for sure.

[Anthony Housefather, Liberal, Mount Royal, QC]

Mr. Boots, would that be correct as well?

[Sean Boots]

Same here.

[Anthony Housefather, Liberal, Mount Royal, QC]

Thank you.

While I take your testimony really importantly with respect to our other study, and I think you are very valuable witnesses and I learn a lot from you—with respect to that particularly, as I mentioned to you, Ms. Clarke, that article you wrote was fascinating and really very compelling—I don't think that, in the position you are in today, on this study you're able to actually give anything on what we're really supposed to be looking at related to McKinsey.

Let me ask you one last question. I think you've already stated this in your answer to Ms. Kusie. Do you have any reason to believe that the contracts provided to McKinsey were done in any different way than the contracts of any other management consulting company by the Government of Canada?

[Prof. Amanda Clarke]

No.

[Anthony Housefather, Liberal, Mount Royal, QC]

Thank you.

Mr. Boots.

[Sean Boots]

No.

[Anthony Housefather, Liberal, Mount Royal, QC]

I don't think I have anything more to ask.

I'm going to surrender my time, Mr. Chair. You can go on to the Bloc.

[The Chair, Conservative, Kelly McCauley]

Thanks, Mr. Housefather.

Next is Ms. Vignola.

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

Thank you very much, Mr. Chair.

Ms. Clarke, Mr. Boots, thank you for being with us. I am very aware that you cannot give us details on the McKinsey contracts, as neither you nor I have them yet. We hope to get them soon.

Nevertheless, your clarifications and answers will help provide a better understanding and improve processes within the public service and perhaps help better recognize our public servants’ expertise.

On this point, Ms. Clarke, I was wondering about the following: based on your studies and your research, would you say that public service managers know and recognize the skills people on their teams have? Mr. Boots can answer afterwards.

[Prof. Amanda Clarke]

Do public servants recognize their own competencies in-house? Is that sort of the question?

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

Do senior officials recognize their employees’ skills? Do they, at least, know what they are?

[Prof. Amanda Clarke]

That's a tricky question. It's tricky because obviously I don't want to comment on every manager in the federal government. That would be impossible.

In general, I see two things going on.

A smaller group of public servants is I think more aware of what could be done in-house and would be excited to do it and quite capable and has enabling managers who want to do it, but the system around them makes it very difficult, because we have mired public servants in a literally incomprehensible web of rules and perceived rules. I really do encourage you to spend a bit of time on the Treasury Board suite of policies. It is shocking how deep you can get into layers of bullet points. Of course, this would be disabling to anybody, so there's that.

I think you touch on an important point, though, which is that there's a question of how, over time, we have a generation, perhaps, of public servants who have become so used to leaning on outside players with some of this core public service work, especially in the IT space and I think more broadly, that they see themselves perhaps as more like contract managers than actually doing the work themselves.

I don't think anybody would say they don't think their team is capable of delivering, and I certainly haven't met any public servant who is really excited about the quality of the work they get from a management consultant over what their team could provide, but I think there's a pretty good recognition that it's hard to deliver at the speed that some of the issues of today demand and also to be creative and innovative given the density of rules and processes weighing on a team.

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

You said that when a consultant is hired, from the McKinsey firm or elsewhere, it can be difficult to know whether they are a public servant or an external consultant.

Who ultimately benefits from the expertise developed by external consultants?

[Prof. Amanda Clarke]

The situations where it makes sense to bring in outside expertise are.... Sometimes public servants will say that, for example, for surge capacity. If there's a sudden need for talent and you can't in particular hire them or it might not make sense to build a permanent team, it can be smart to work with outside players. Sometimes there's a very specific expertise you don't have on hand, so leaning on outsiders for that should be encouraged. We don't want an insular public service that presumes to have a monopoly on knowledge.

Where it becomes more problematic is on bigger questions around the strategy of public management or how a program is designed and who it serves. Multi-year transformation strategies are another area where a lot of these firms get really involved. From what I've seen, I don't think they are producing much of substance, but those are the kinds of things that should be treated as core public service work.

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

Thank you.

I have here an open contract, awarded to McKinsey for IT professional services, which began in August 2019 and goes until the end of January 2100.

Tell me, Ms. Clarke, what justifies an open contract for the next 81 years, whether it is with McKinsey, Deloitte or the other firms we talked about?

What justifies a consultant being kept on board instead of hiring our own specialists? I cannot believe that, in 81 years, we wouldn’t be able to find our own specialists.

[Prof. Amanda Clarke]

I don't know this specific contract, but certainly, the idea of having open contracts, in this case, over 81 years seems outrageous. This is when you have to ask what the point of having a civil service is.

Our model is predicated on this idea of a permanent, merit-based and neutral public service, who provides continuity of service and corporate knowledge across different administrations. This is where ministers are supposed to be able to turn for frank advice and loyal implementation. This is at the core of our Westminster model. When you start to see things like this, such as an open contract to dip into external advice as and when needed.... The justification was probably that you want to get that quickly, so if you can create an open contract, then you don't have to keep going back through the process.

I do think you encourage that with how convoluted the process has become. That's another reason why part of fixing this mess is going to be streamlining the rules around how contracts are given. Streamlining is key. It's not adding new rules, because new rules are going to make it even harder and encourage this activity of creating standing offers and having open contracts that are kind of non—

[The Chair, Conservative, Kelly McCauley]

I'm sorry. I must interrupt again. That's our time.

Mr. Johns is next for six minutes, please.

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

I appreciate you both being back here.

Could you give us some history on this? When did outsourcing really take off? We're looking at McKinsey, and you talked about Deloitte. Should we be studying Deloitte? Is it also out of control in terms of outsourcing and getting private contracts?

Can you speak about the history? When did this really get going?

[Prof. Amanda Clarke]

Management consultants have always played a pretty big role in public administrations globally with some variation. Canada has a really interesting history of having worked with management consultants early on in some of the first government reform exercises in the sixties, right around—

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

With McKinsey, we're seeing this exploding amount. Was there a company under the Conservative government that it favoured and took off as well? Was there anything that we should be looking at and examining?