Government Operations Committee on Feb. 6th, 2023

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

Yes.

[The Chair, Conservative, Kelly McCauley]

—and I will express my great concern that we are falling back on him, but we're not actually committing to that. I'll leave that be.

Mr. Thompson, Mr. Johns, Mr. Barrett and the minister as well brought up repeatedly this integrity test. A simple Google, putting in three words, “KPMG convictions fraud” or “Deloitte convictions fraud” or “Accenture convictions fraud” comes up with multiple pages of fraudulent activity around the world. McKinsey is not an affiliate; it is a sole company. I just ask that you provide to this committee real black and white information on how this so-called integrity test is put into effect for these companies.

We've asked repeatedly over the years at OGGO. It's very clear. I'm aghast to hear that you were not aware of the McKinsey stuff. I was well aware, even though it wasn't part of our study, and well aware of all the issues with KPMG and Accenture. It's not that I'm doubting the honesty of what was said today, but I find it extremely concerning that a simple Google check that shows a massive number of concerns with these companies somehow doesn't stop them from receiving massive contracts from taxpayers.

I'll leave it at that. I appreciate your time.

We're going to suspend very quickly for about five minutes as we bring in our new witness.

[The Chair, Conservative, Kelly McCauley]

Colleagues, we're going to get going, because we are tight on time.

I would like to welcome Mr. Cory for opening comments of five minutes.

Before he starts, I want to assure everyone that we have tested his microphone and the audio with our interpreters and that we are good to go.

Mr. Cory, go ahead for five minutes, please.

[Ehren Cory, Chief Executive Officer, Canada Infrastructure Bank]

Thank you, Mr. Chair and members of the committee.

As introduced, my name is Ehren Cory. I am the chief executive officer at the Canada Infrastructure Bank, or CIB. I'm pleased to be with you today and to accept the invitation to act as a witness in your study of federal government consulting contracts awarded to McKinsey & Company.

The Canada Infrastructure Bank is a federal Crown corporation that reports to Parliament through the Minister of Infrastructure and Communities. We were created to invest in revenue-generating infrastructure projects in Canada to benefit Canadians. We do this by working with governments, indigenous communities, the private sector and institutional investors to provide investment in projects that support economic growth, connect communities and contribute to Canada's transition to a low-carbon economy.

We work on investment opportunities from coast to coast to coast that reflect priority sectors for investment—public transit, broadband, green infrastructure, clean power and trade and transportation. We invest in projects across each of those sectors that, in particular, reduce infrastructure gaps in indigenous communities across the country. I cannot overstate the critical importance of infrastructure investment to our ability to meet climate goals, enhance productivity and protect our quality of life.

The CIB was created when the Canada Infrastructure Bank Act was passed in June 2017. An inaugural board of directors was appointed in November 2017. Since then, we have been steadily building the institution and accelerating the pace of investment activity.

The CIB got off to a slow start as it worked to establish the guardrails for projects that it should or should not invest in; build relationships with infrastructure owners across the provinces, territories, municipalities, indigenous communities and the private sector; and establish clear governance that allowed it to act decisively and independently in making investment decisions while ensuring close alignment with government policy and good transparency.

The launch of the CIB's growth plan in the fall of 2020 marked a significant turning point for our organization, with a clearer definition of priority investment areas, concrete investment goals and clarified investment decision-making processes. Since then, the CIB's investment activities have rapidly accelerated.

That's why I am particularly proud to report that as at December 31, 2022, the CIB has now made investment commitments of $8.6 billion across 43 projects with a total capital cost of almost $25 billion. These are investments that will result in annual greenhouse gas emissions reductions of more than 4.5 million tonnes; nearly 300,000 new homes connected to broadband; nearly 175,000 new transit riders every day; more than $60 million in agricultural value being added to the economy; and improvements across infrastructure in 26 indigenous communities.

This has real impact for Canadians—in new broadband in southern Manitoba, electric buses on the road in Edmonton, new district energy systems powering Richmond, B.C., reliable energy storage in rural Ontario and rail expansion in northern Quebec and Labrador.

Over the course of the CIB's work, to exercise due to diligence in our investment decisions and to ensure maximum return for Canadian taxpayers, the CIB does rely from time to time on the help of experts from external firms. These are accountants, lawyers, engineering and technical firms, and other consultants.

The CIB has received the motion adopted by this committee on January 18 with respect to contracts with McKinsey & Company. We are currently preparing our response, which will be provided to the committee within the prescribed timeline.

As we've previously reported to Parliament in response to Order Paper questions, I can confirm that since our inception in 2017, the CIB has entered into three contracts with McKinsey & Company, all prior to my joining the CIB in November 2020. Two of the contracts were undertaken as part of the CIB start-up activities in 2018. The final project was undertaken and completed in July 2020. The scope of this work included providing advice on the initial development of the CIB's criteria for investments and risk management governance and policies, and the later work was in assessing new strategic opportunities.

In total, the value of the contracts awarded by the CIB to McKinsey & Company was $1.43 million. To put that in context, it represents just under 5% of our total expenditure on professional service fees and about 1% of our total operating expenses. All of our expenses, of course, including these professional fees, are reported annually to Parliament in our audited financial statements.

Now, as honourable members of the committee may be aware, prior to my joining the CIB I was the president and CEO of Infrastructure Ontario, a provincial Crown agency responsible for building the province's infrastructure and real estate assets. Before that, I worked at McKinsey & Company, between 2001 and 2012. As is clear in the timeline I have outlined, the CIB has not hired McKinsey & Company since I joined the organization in November 2020.

With that being said, I would like to thank the chair and members of the committee for the opportunity to speak. I am looking forward to the discussion.

[The Chair, Conservative, Kelly McCauley]

Thank you very much.

Colleagues, we'll do a very short second round of six minutes. We'll do a shorter second round because of the late time.

We will start with Mr. Paul-Hus for six minutes, please.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Thank you, Mr. Chair.

I'd like to confirm with you, Mr. Cory, that the idea or concept behind the Canada Infrastructure Bank, its structure and its implementation are McKinsey creations? Is that right?

[Ehren Cory]

Thank you for the question.

The creation of the CIB predates my joining. As I mentioned, I joined in November 2020. My understanding—

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

I'd like to know if it was McKinsey who developed the implementation plan for the Canada Infrastructure Bank.

[Ehren Cory]

I don't have an awareness of that. I'm sorry.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

I can tell you that the answer is yes.

You held a position at McKinsey from 2001 to 2012. Steven Robins, who is head of strategy at the Canada Infrastructure Bank, is also a McKinsey alumnus, as is Aneil Jaswal.

Can you confirm for me that all three of you are former McKinsey employees and that you now hold executive positions at the Canada Infrastructure Bank?

[Ehren Cory]

Yes, that's correct.

[Pierre Paul-Hus, Conservative, Charlesbourg—Haute-Saint-Charles, QC]

Thank you.

I have no further questions.

I'd like to give the rest of my speaking time to Ms. Lewis.

[Leslyn Lewis, Conservative, Haldimand—Norfolk, ON]

Thank you for your question.

Thank you, Mr. Cory, for your attendance here today.

Did you personally hire Mr. Robins or Mr. Jaswal?

[Ehren Cory]

Thanks for the question, Ms. Lewis.

Yes, I did hire Mr. Robins. He previously worked at Infrastructure Ontario as well. He had left McKinsey on or about, I think, 2014, had gone back to school, and worked at Infrastructure Ontario. I was part of hiring him.

Mr. Jaswal joined us through an open competitive process through our HR department. He applied. I didn't know Mr. Jaswal prior to his application. He went through the process, and I met him once he joined.

[Leslyn Lewis, Conservative, Haldimand—Norfolk, ON]

But it was an open competitive process that happened to hire Mr. Jaswal, who formerly worked at McKinsey with you.

[Ehren Cory]

I'm sorry, but no, he didn't work at McKinsey with me. I left McKinsey in 2012. I believe he was there from 2016 to 2018. We didn't know each other at all.

[Leslyn Lewis, Conservative, Haldimand—Norfolk, ON]

He didn't work at McKinsey with you, but you both worked at McKinsey.

[Ehren Cory]

That's correct, at different times.

[Leslyn Lewis, Conservative, Haldimand—Norfolk, ON]

Mr. Robins worked at McKinsey. The chair of the finance minister's Advisory Council on Economic Growth was Dominic Barton, who recommended the creation of the Infrastructure Bank. Is that correct?

[Ehren Cory]

That's my understanding. That was part of the work of the committee, yes.

[Leslyn Lewis, Conservative, Haldimand—Norfolk, ON]

How many former McKinsey employees have worked at the Infrastructure Bank since its inception, or currently work there?

[Ehren Cory]

There are four of us, to my knowledge—the three the member mentioned previously, and also my executive assistant.

[Leslyn Lewis, Conservative, Haldimand—Norfolk, ON]

Okay. Other than your executive assistant, are those all high-level executive positions, management positions?

[Ehren Cory]

No. Mr. Robins, who's the head of strategy, is in an executive position. He helps us identify investment priorities and the portfolios of investments we should make. Mr. Jaswal leads our work on portfolio strategy, on how much money to allocate across different investment goals, but that's not an executive position. He's a director in our company.

[Leslyn Lewis, Conservative, Haldimand—Norfolk, ON]

He's a director. Thank you.

I understand that McKinsey & Company was awarded at least four consulting positions with the Infrastructure Bank. Is that correct?