Government Operations Committee on Feb. 6th, 2023

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

Perhaps you could explain the standing offer piece and the supply arrangement piece, Mr. Deputy.

[Paul Thompson]

Absolutely. Thank you for that question.

As the minister noted in her remarks, we have a national master—

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

I'm sorry to interrupt you, Mr. Thompson, but that doesn't answer my question.

Why does McKinsey have exclusive rights to certain bid solicitations?

I don't need a definition of standing offer, request for standing offer, contract or bid solicitation.

Why does McKinsey have exclusive rights?

[Paul Thompson]

We established that instrument.

It's a national master standing offer for benchmarking services.

We have four similar arrangements with other companies. These arrangements contain proprietary information. Each one of these companies has a service that involves proprietary methods, tools and analytical models, and they are used to compare an organization within the Government of Canada to a peer organization, a comparable organization in the private sector or in another country or order of government.

That's the nature of the work. It's sole-sourced in relation to these proprietary models and datasets that these companies own.

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

If I understand correctly, those businesses have exclusive rights because they sold tools and work methods to Canada, and under the agreement, our public servants didn't have the opportunity to apply those tools and methods themselves. We're therefore dependent on what we have purchased.

[Paul Thompson]

That's exactly right. These businesses, McKinsey and others, conduct surveys and the data they collect are their property.

It's these datasets that are used to do the analysis and comparisons between government operations and those of other entities.

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

Is there absolutely no one in the federal government among all public servants who is able to do surveys and analytical programming for their own government? Do we not have that expertise within our public service?

[Paul Thompson]

In this case, it's partly about the expertise, but it's mostly about the data that these companies have from previous surveys that they have at their disposal to do the comparisons. We don't own datasets like that, datasets that would show productivity and levels of cost structure of different organizations around the world.

[The Chair, Conservative, Kelly McCauley]

Thank you, Mr. Thompson and Ms. Vignola.

Mr. Johns, go ahead, please, for six minutes.

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

Minister, you're aware that McKinsey recently settled a huge lawsuit in the United States for their role in advising clients on how to boost sales of opioids like OxyContin. Here in Canada, you've heard me speak repeatedly about the toxic drug supply and how it's killing thousands of people.

Do you think it's appropriate that the Government of Canada is rewarding companies like McKinsey with million-dollar contracts, given their previous involvement in contributing to the ongoing toxic drug crisis in this country?

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

Mr. Johns, we have an integrity process in terms of analyzing whether companies should continue to do business with the Government of Canada. My understanding is that notwithstanding what I've heard through the media, McKinsey was not excluded from doing business with the Government of Canada.

Mr. Thompson has had some thoughts about our integrity regime as it currently exists. Perhaps he could address how it works, and maybe how it should work, or other thoughts about change.

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

I think if he's going to do that, I'd like to hear Mr. Thompson talk about what the threshold is. What are the disqualifying characteristics of a company like this to make them ineligible? Clearly, they have had problems in South Africa and in France. This is a company that's riddled with scandal after scandal. Canadian taxpayers deserve to know what that threshold is.

[Paul Thompson]

Thank you for that question.

Certainly, we carefully monitor the situation and the allegations and activities that the member has mentioned. As the minister noted, these activities have not triggered our integrity regime, in the sense that there have been no criminal convictions of an affiliate, which would be the trigger for our integrity—

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

Right. They settled a $600-million lawsuit. They may not have been convicted, but clearly this says a lot in the court of public opinion. I imagine that most Canadians would be pretty concerned about this.

As well, what do you say to the health care workers? We all agree around this table that our health workers were heroes in the pandemic. They're burned out. They're on the front line of this toxic drug crisis. What do you say to them when they know that a for-profit company created medical advice that was counter to the needs of the public health system? What do you say to those workers?

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

I would say, Mr. Johns, that I appreciate your comments and certainly the sentiments that accompany them. This is precisely why the deputy approached me a couple of months ago, I believe, in terms of looking again at our integrity regime. We certainly are committed to doing that.

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

I'm looking at outsourcing. Right now your advertising agent, Cossette Media, has been locking out their workers, the ACTRA union. You've talked about passing anti-scab legislation. Are you serious about it?

Right now we're seeing one of your contractors locking out workers. Do you think it's appropriate for the Government of Canada to provide contracts to companies that are hiring scab workers to replace unionized workers?

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

Mr. Johns, I have no knowledge of anything you have just said. I am not aware of any contract and who you're talking about.

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

Okay. Well, I'm hoping you'll look into it, because I think it comes down to integrity when it comes to procurement.

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

Just to understand your question, is this a contract that PSPC has with a certain company?

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

Yes. Cossette Media does most of your advertising. ACTRA is one of the suppliers. They're locked out right now, and this isn't okay.

I think when we get back to the bigger issue.... You've heard me talk about the bigger issue, which is the six companies that have been in the hundred-million-dollar procurement club over the last decade. We've seen Public Services and Procurement double the outsourcing to these “big six”, as I'm going to call them, over the Conservative regime, or fourfold under your government. This is despite the Prime Minister making a campaign promise in 2015 to cut back, actually, on outsourcing. He put forward a platform to free up $3 billion a year through a spending review that would include, and I quote, “reducing the use of external consultants”. That hasn't happened. It's actually become a runaway ship.

Can you explain why so much outsourcing is necessary under your government, knowing full well that the government can hire, train and employ full-time workers within the Government of Canada's workforce?

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

Mr. Johns, I agree with you that the numbers speak for themselves. They certainly have grown, as you've stated—

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

They haven't just grown; there's been a tenfold increase. It's 10 times more, just with the big six. It was $50 million a year in 2011 and now it's over half a billion dollars. This is a runaway train. It's out of control.

I guess this is what I'm needing to hear from you and hoping to hear from you today: What are you going to do to stop it and live up to the promise made by the Prime Minister?

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

Let's put it this way: This is precisely why this review is taking place. This is why I acknowledged in my opening remarks that this committee is undertaking a very serious and important study, and—

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

Do you plan on increasing or decreasing the amount of outsourcing? What's your plan?

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

We want to look at every possible way to give value for Canadians, and we will do that in a comprehensive and systematic way with the assistance of the procurement ombudsman.