Government Operations Committee on Feb. 6th, 2023

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

Is there any pro bono work being done for PSPC at this time by McKinsey?

[Paul Thompson]

There is no pro bono work.

[The Chair, Conservative, Kelly McCauley]

That's our time.

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

Thank you.

[The Chair, Conservative, Kelly McCauley]

Thank you, Mrs. Block.

Ms. Thompson, you have five minutes, please.

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

Thank you, Mr. Chair.

Welcome, Minister. It's good to see both of your co-workers and department heads.

I'd like to begin by asking you if you could tell us why there is procurement of professional services and why McKinsey would be used.

Thank you.

[Helena Jaczek, Liberal, Markham—Stouffville, ON]

Thank you, Ms. Thompson.

Well, I think this is the question that we're all asking. Obviously there are times when there is specific expertise that is required. The deputy has referred to some of the benchmarking projects that do require data and that in this case McKinsey holds, and therefore this is very useful for us to know how we're doing compared to other jurisdictions.

In terms of fluctuation in terms of workload, there are times when there are specific projects that require additional staff, and it is not considered reasonable to necessarily increase our staff complement, which obviously costs a certain amount of money, if there is a time-limited project. Therefore, the use of a consultant could really fit what is needed at that particular time.

Certainly from my perspective, I want to ensure value for money for Canadians. I want quality services and quality products, because of course we also contract for products, not just management services. This is the case we're looking at today. That is absolutely paramount, from my perspective, and I have certainly ensured that public officials within PSPC are very aware of my feelings on that matter.

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

Thank you.

To follow up on the benchmarking you referenced, Mr. Thompson, could you explain what benchmarking services are and explain that in relation to what McKinsey has to offer?

[Paul Thompson]

Thank you for that question.

I mentioned that there are a range of companies with whom we have arrangements for benchmarking services. They each hold different proprietary tools and instruments that would be used to compare different aspects of government activity.

Whether it's an internal corporate service function or a client- or citizen-facing service, it would be datasets that would compare the cost structure, for example, of that activity to those of other organizations and give a guide to some continuous improvement work that a department might be doing. It could also be helpful, if there's a deeper business transformation under way, to know where our current service posture is relative to other comparable entities.

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

How would McKinsey fit into that understanding of benchmarking in terms of their contracts?

[Paul Thompson]

McKinsey, as I understand it, has nine techniques or data analytic tools they deploy in circumstances like this. Again, other companies would have different tool kits. They would have areas of specialization when it comes to IT systems versus business models and strategies. It would be up to departments to choose which benchmarking approach and tool would be best for the circumstances in question.

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

Thank you.

Minister, I'm not sure if you're the best one to answer this or if it goes to Ms. Royds or Mr. Thompson again, but in terms of the contracts as COVID became the reality in the global space—contracts that the government initiated at that time and during the period of lockdown—could you speak about the processes around having to procure such a large amount of supports in such a short period of time?

[Helena Jaczek, Liberal, Markham—Stouffville, ON]

I think I should turn to officials. Clearly, I was not in the role, so perhaps Mr. Thompson could help.

[Paul Thompson]

Thank you, Minister.

I would start by indicating that these instruments that we spoke of before—standing offers or supply arrangements—are ways of facilitating procurements that can be very complex, as the minister noted. These instruments allow some of that work to be done ahead of time, such as pre-qualifying suppliers so that there are fewer steps needed to complete an actual contract when there's a defined need for the services.

I don't know, Mollie, if you want to add anything in the COVID context on how these instruments work.

[Mollie Royds]

In the COVID context, I would add to what the deputy said that we would have assessed each requirement that was brought forward to us for what the appropriate mechanisms would be. Given the urgency of the situation, we would have employed a range of tools, based on our policies and guidelines, and made a decision in order to deliver as quickly as possible on behalf of the government.

We would have employed a range of tools in those circumstances. Some would have been done in the supply arrangements—

[The Chair, Conservative, Kelly McCauley]

I'm sorry. I'm afraid I have to interrupt you. That's our time.

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

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

Thank you, Mr. Chair.

I will address you again, Mr. Thompson.

Earlier, you talked about contracts awarded for surveys, for which McKinsey collects data. You said that those data were then used to design other tools, complete other analyses and so on.

Can you explain to me why we pay to have surveys conducted, but we don't pay for the data collected, which belongs to our constituents and the public service, to be considered the property of the Government of Canada rather than McKinsey's?

Right now, it's as if McKinsey is trying to influence Canada to get contracts by saying that the methods they use belong to them. After all, they are quantitative methods.

It's also an attempt to suggest that the public service is in the Stone Age. That's what we heard on our committee last week. I can't believe that no one in the public service is capable of using quantitative methods and compiling and analyzing data. I've been trying to figure it out since earlier, but I can't get my head around it.

[Paul Thompson]

Thanks again for the question.

When I was talking about data, I wasn't talking about data on the Government of Canada's activities. I meant data related to other organizations, such as the provinces or other countries, the United States or European nations, for example. The data is used to compare the government's activities to that of other organizations.

So I wasn't talking about data on the Government of Canada; in this case, we're supplying the data.

We provide this information to a firm like McKinsey, which would then use their datasets of information that they've gathered from around the world and from other private sector partners to make comparisons and analyses.

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

Typically, McKinsey shouldn't have the right to use non-public data it has on other countries to apply its comparison methods and make recommendations to a third party, like Canada or China.

How can we be sure that our own data collected by McKinsey isn't being used to make cookie-cutter recommendations for countries that are not necessarily buddy-buddy with Canada?

[The Chair, Conservative, Kelly McCauley]

I'm afraid I have to interrupt. It was an excellent question.

Maybe, Minister and Mr. Thompson, you can provide that answer in writing to the committee, please.

[Helena Jaczek, Liberal, Markham—Stouffville, ON]

Yes, we will.

[The Chair, Conservative, Kelly McCauley]

We'll go to Mr. Johns, please, for two and a half minutes.

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

Minister, we believe that the companies doing business with Canada should be behaving ethically, both here in Canada and abroad, and that they should always be held to the highest standard when it comes to responsible business conduct. They should be held to account when they fail to meet those standards.

We heard from Mr. Thompson that McKinsey wasn't convicted of a crime, but they settled a $600-million lawsuit for their role. I guess it might not have passed your integrity test in terms of shutting them down.

What would it take to meet that test and to exclude a company? Could you table the integrity data that allows McKinsey to bid? Could you do that for this committee?

[Helena Jaczek, Liberal, Markham—Stouffville, ON]

We can certainly give you the process that the integrity regime currently includes.

Mr. Deputy, would you...? Yes.

[The Chair, Conservative, Kelly McCauley]

Great.

I'm going to interrupt for two seconds, Mr. Johns.

Do we have the will of the committee that the department table this to the committee? I see no nays.

Please do. Thank you.

I'm sorry, Mr. Johns.