Government Operations Committee on Jan. 30th, 2023

[Prof. Amanda Clarke]

I can't, no.

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

Thank you.

Mr. Boots, I'm really interested in your comments around transparency and data quality. I agree. I think it's incredibly important, again, to the outsourcing study. I think it's something that we obviously have to look at in great depth.

For this study, can you speak to transparency and data quality in relation to the McKinsey contracts?

[Sean Boots]

I can't speak specifically to the McKinsey contracts.

The only thing I think I would note is that, to the credit of the open data team that publishes the proactive disclosure of contracts data, the quality of data included in the dataset really increases around 2017-18, and that's why that was the early boundary of the time period that we looked at in our research. There's scattered historical data from before that point, but it's hard for us to analyze that. Given that's when the data gets good, that's where we started.

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

Right, but I'm trying not to duplicate the study.

In relation to McKinsey, is there anything specific around the McKinsey contracts on transparency or data quality?

[Sean Boots]

No, there's nothing specific to McKinsey in our research.

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

Thank you.

Mr. Chair, I'll pass on the rest of my time. Thank you.

[The Chair, Conservative, Kelly McCauley]

Thanks very much, Ms. Thompson.

Ms. Vignola, you have two and a half minutes, please.

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

Thank you very much, Mr. Chair.

Mr. Boots, one of the provisions pertaining to awarding sole‑source contracts indicates that the firm will have exclusive rights.

Does it happen often that a company has exclusive rights over services to the public?

[Sean Boots]

It’s a good question.

The database contains information showing whether the intellectual property belongs to the firm or the government. However, this information has only been added to the database over the past few years, and it is therefore difficult to have an overall picture. That being said, in most professional services contracts, the intellectual property belongs to the company. Departments must follow an exemption process to be able to own the intellectual property, but there are elements that make this very difficult.

This is addressed in one of the recommendations Ms. Clarke and I presented in our little report.

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

Earlier I mentioned a contract awarded to McKinsey & Company that is open until 2100. It’s contract number EN537‑05IT01/233/EI‑001.

When you go on Buyandsell.gc.ca to see how much the contract is costing taxpayers, you just see zero dollars.

It’s great to take a long view of things. That is the goal of a government staff member. Nevertheless, the contract is for zero dollars.

Is this a problem?

If so, what can we do to make sure taxpayers know how much this contract is actually going to cost them in the end?

[Sean Boots]

It’s an excellent question.

[The Chair, Conservative, Kelly McCauley]

I'm sorry, Mr. Boots, we are out of time. Would you be able to provide that in writing to the committee? Thanks very much.

Mr. Johns, you have two and a half minutes.

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

Thank you.

Ms. Clarke, to get back to the issue of intellectual property and sharing knowledge and resources between departments, can you talk about what has been happening with the federal government paying to use or develop a service and then having to pay for it over and over again, whether that's for leasing or for another agency to use it, whatever it might be? It sounds like a whole lot of taxpayers' dollars being thrown out the window.

What would happen differently if that service were developed for and by the public service?

[Prof. Amanda Clarke]

There are a few things there.

One is that, in particular, whenever firms are contracted in to develop digital systems or any kind of citizen-facing digital interface, there is always opportunity for lots of data to be collected that, in some cases, would have privacy questions but also have a lot of value to potentially improve the policy process, make government work more smartly, etc.

There have been cases—and I don't know how much this happens across the federal government but it can happen—that in these contracts you don't specify that the data that's produced is then owned by government. There have been instances of governments buying this back. That's one issue.

On the second point you raised around basically being able to repurpose a service that you procure, we would all assume that's happening. If you were running your own business and you paid for some piece of advice or some service that you could use in different lines of your business, you would do that.

It doesn't happen often in government for a few reasons. One is that the contract might specify that it can't, but more often I think it's because departments aren't talking to each other. It's quite likely, and I have heard anecdotally, that if we had more data on what these contracts were, I think we'd see that in many cases departments and units within the same department are paying for the same thing over and over from the same firms.

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

It sounds outrageous to me.

Can you also talk about the risk to Canadians' privacy when government outsources IT work that involves very personal data?

[Prof. Amanda Clarke]

In some cases the firms you're working with will have best-in-practice security and privacy measures in place, so it's not necessarily a problem. This has long-standing been a challenge of government relying on non-governmental players for its work. Just by virtue of developing a product or a service or a strategy, you end up learning a lot about the nature of that program, the users of that program and what impact it has. I think this is where we start to see the gutting of the state's knowledge. The more your relationship with service users or with stakeholders or with your program is mediated by a contracted party, the less you know about your own operations. Governments are actually becoming dumber the more they contract, which has this vicious cycle of meaning you contract more because you don't have the knowledge.

It's a genuine concern. It exists in the IT space especially because there's a lot of data and information, but it's always been a reality of government outsourcing, whether that's with management consultants or non-profits. It's always a real challenge, how you close the loop on making sure that any information that is produced through that program you're outsourcing goes back to the policy-making—

[The Chair, Conservative, Kelly McCauley]

I'm afraid I have to cut you off again, Professor Clarke.

Thanks, Mr. Johns.

We're suspending at 4:31, so we're going to do two and a half minutes with Ms. Block and then two and a half minutes with Mr. Housefather.

Go ahead, Ms. Block.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much, Mr. Chair.

I want to echo my colleagues' comments and welcome both of you here today.

I truly appreciated the testimony you provided to us in the past. I think what's important about the testimony we're hearing yet again, today, is that it provides us, as a committee, with a backdrop to understand not only the issue around outsourcing but also, as you pointed out, the policy debates we need to have when we have a flashpoint like McKinsey—when it's in the news that this company's contracts with the government have increased fiftyfold, as my colleagues have said.

Even if Canadians aren't paying attention, we certainly need to. We need to dig into that and find out what is embedded in the rules around procurement and contracting that allows for this reliance on contracting out to management consulting companies, and what gaps and holes there are in that system, which allow us to contract with companies like McKinsey and see that kind of growth happen so quickly.

Obviously, we've had reports about that. Public servants have also stated publicly, albeit on background, that they were concerned about the work being done. They're not sure what was gained in the department by the work done by these consulting firms. They didn't know what they brought to the table. It's also concerning to us when public servants start to question why this outsourcing is happening.

I heard from you that you think significant reform of contracting rules needs to be undertaken, without necessarily growing the number of rules and making that more onerous. You also commented on the fact that there are numerous models, internationally, for what we might do and where we might look to start trying to get this in hand.

I'm wondering if you could give us some examples of jurisdictions we could look at.

[The Chair, Conservative, Kelly McCauley]

I'm afraid that's time. We'll have to ask Mr. Boots to provide that in writing to the committee.

Mr. Housefather has 30 seconds.

[Anthony Housefather, Liberal, Mount Royal, QC]

I have two and a half minutes, Mr. Chair, and I'm taking them.

First of all, thank you for being here again.

Mr. Barrett threw some remarks and assumptions into his question. Mrs. Clarke, did you know the Prime Minister is close personal friends with Dominic Barton? Do you have any personal knowledge of that?

[Prof. Amanda Clarke]

Yes, I know that, but it's not personal. I haven't hung out with them.

[Anthony Housefather, Liberal, Mount Royal, QC]

Do you know who's going to be here on Wednesday? It's Dominic Barton. We could ask him that question.

You're not the one who knows what the relationship is, but you do know that, in the procurement system, the Prime Minister is not the one who awards contracts.

[Prof. Amanda Clarke]

I don't know what happened in those cases.

No, as the rules are written and as I've understood the process, it doesn't seem to be something most ministers—let alone prime ministers—pay attention to.

[Anthony Housefather, Liberal, Mount Royal, QC]

When we talk about increasing by fifty times.... If I had a contract with a company for $100, and the next year I had a contract with them for $5,000, what would the percentage increase be?

[Prof. Amanda Clarke]

I'm sorry. Are you marrying the question to the McKinsey contract?