Government Operations Committee on Feb. 1st, 2023

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

Bluntly, sir, I just don't believe you. I cannot believe that you led this company as the managing partner for a decade, worked for multiple different opioid manufacturers and worked for Purdue for 15 years, and that nobody said in passing.... It's on the record that dozens of partners were working on these files, and you had no idea they were a client. What does it mean to run the company, then?

[Dominic Barton]

There are 2,700 partners in McKinsey & Company, 2,700 partners. A managing partner can't know—

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

Even if you were following the news, you would have known that McKinsey did work for Purdue. It was publicly reported on while you were leading McKinsey.

[Dominic Barton]

Well, I would suggest that you come, take a look and see how McKinsey and other consulting firms work, because I don't think you understand how the process works—

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

I will just say in closing that however friendly you are or aren't with the Prime Minister, one thing you have in common with him, sir, is that you don't seem to claim responsibility for anything that happens under you.

[The Chair, Conservative, Kelly McCauley]

That is our time.

Mr. Kusmierczyk, you have five minutes.

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

Thank you, Mr. Chair and Mr. Barton.

I want to pick up on a comment by the colleague beside me and an observation he brought forward about the comparative value of contracts that McKinsey has with the Government of Canada.

In your last full year as the head of McKinsey in 2018, the value of federal contracts with McKinsey was $3 million. Again, compare that to the $10 billion that McKinsey brings in globally.

The Library of Parliament, in its report analysis, looked at consulting contracts for the big six consulting companies: Ernst & Young, KPMG, Accenture, PricewaterhouseCoopers and Deloitte. When you look at the value of the contracts from 2005 to 2022, the value of the McKinsey contracts is about 3%, so the value of the McKinsey contracts is dwarfed by the contracts that are provided to Deloitte, Accenture and PricewaterhouseCoopers.

Can you speak to why that is and why, for example, other consulting companies are providing services on a much greater scale than McKinsey?

[Dominic Barton]

I don't know about that. It's maybe more fundamental to their practice. It's critical to what they do. The public sector practice, when I was at McKinsey, was 5% to 7% of a practice, and in some countries it was nothing.

If I might say so, working with the government is difficult. It's more difficult than working with the private sector, and that's not about the people. It's just a very complicated process, for good reason, in where it is. We have fewer...we have to think about the focus of the time and so forth.

It's a good question, though. I think it's a very good question for the committee to ask, and it gets to your point, if I might say so, which is to broaden it. There are other institutions that are doing well, growing, or however you want to say it. Why, and how does that work?

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

To your point, Mr. Barton, admittedly there has been a rise in consulting contracts for government, especially in 2020 and 2021. That's when you saw the contracts increase, but they increased across the board for all consulting firms, whether it's Deloitte, KPMG, PwC, Ernst and Young or McKinsey & Company, and I would even say that in the real raw numbers the increases we saw were greater for those companies than in McKinsey.

Can you speak to why you think there was such an increase in consulting services to the federal government in 2020 and 2021? What are some of those forces that the government was trying to deal with?

[Dominic Barton]

Again, I'm just coming at it from what I saw, but one is COVID. The amount of effort that had to go into dealing with the problem on the health care front.... It was just like a nuclear bomb went off in terms of the scale of what was happening, so I think that has to be a chunk of it.

I saw a piece of it, just with the PPE supply chain that we had to build up from zero. It was a huge effort to get airplanes to be able to—

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

At the end of the day it was to keep Canadians safe.

[Dominic Barton]

Yes, and then I mentioned the digitization. This is a new phenomenon whereby organizations are digitizing themselves. That's a complex, heavy-duty piece of work that has to occur. That's also happening. COVID accelerated that, because people couldn't communicate, so you had a big advance on that side.

The other issue is the geopolitics and the supply chains. I think, actually, with the war you have all sorts of challenges relating to food security, supply chains, friend-shoring—whatever you want to call it—and that's a different landscape from what we've had before.

Those are just three things I could see. I'm sure there are more. As I said, again, the repatriation of 60,000 Canadians doesn't cost nothing, and there aren't resources to be able to do that. I remember on that one getting phone calls asking me to figure out who was the CEO of Air India, how we were going to be able to get people here on the cruise ships and how that works. These weren't relationships that consular affairs would typically have.

It wasn't in the playbook, so there were new playbooks that had to be built quickly and at scale, and I think that's when you ask for help. The organization I worked with, when it was Deloitte—and again it's not to make an advertisement for Deloitte—was very helpful. I'm glad they were in the PSPC, because they helped organize all the different suppliers that we were looking at and made sure we had our quality—

[The Chair, Conservative, Kelly McCauley]

Thank you, Mr. Barton. I'm sorry.

We're approaching our final round now.

It's back to you, Mr. Genuis, please, for five.

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

Thank you, Chair.

I want to just start by clarifying the interactions involving Mr. Pickersgill.

Mr. Pickersgill accompanied you to meetings with the Prime Minister and with various officials, and he was responsible for coordinating the research associated with the work of the growth council.

Is that correct?

[Dominic Barton]

No, it's not correct. He did not come to meetings with the Prime Minister. The meetings with the Prime Minister were very few and far between, and they involved Mr. Morneau, Bill Morneau—

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

From the McKinsey side, though, I'm asking.

[Dominic Barton]

The McKinsey side was me. There were no McKinsey people coming into the meetings with the Prime Minister.

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

Mr. Pickersgill was supporting you in terms of the research and analysis, although you're saying he wasn't attending meetings.

[Dominic Barton]

He wasn't supporting.... The Prime Minister was not in any of the growth council meetings, not one, just as Prime Minister Harper, by the way, was not in any—

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

Mr. Pickersgill was supporting the work of the growth council.

[Dominic Barton]

Mr. Pickersgill was saying that we, the committee—the whole committee, the 14 people—needed support with data.

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

That's right. He was supplying that.

[Dominic Barton]

No. He provided people who supplied it.

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

I have emails that I referred to earlier, where he is in the process of pitching the government on work that McKinsey could do for the government, citing his work in supplying people and in otherwise supporting you for the growth council.

That is consistent, I think, with your testimony, although you said he wasn't physically present at the meetings.

[Dominic Barton]

It's not consistent with my testimony. What I said was that I don't know what he was doing on that side.