Evidence of meeting #51 for Government Operations and Estimates in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was bdc.
A video is available from Parliament.
Bloc
Julie Vignola Bloc Beauport—Limoilou, QC
Thank you.
Very briefly, what process do you follow to check that the government doesn't already have the required expertise internally?
For example, when comparative analyses need to be done and the requirements of the work call for a knowledge of quantitative methods, how do you make sure that this expertise is not available in-house?
President of the Treasury Board
As you might imagine, I'm not the one who personally does this work. Public servants determine things like that when they evaluate their needs. Among other things, it's worth examining how the public servants reached the decision to bring in additional external expertise.
Conservative
NDP
Gord Johns NDP Courtenay—Alberni, BC
Thank you.
Minister, it's good to have you here.
First, we're concerned, obviously, about the overreliance on outsourcing. That's because it so often fails to deliver value for money. It also hurts the ability of the government to recruit the professionals it needs.
I'm going to ask you some quick yes-or-no questions. These aren't complicated.
The Treasury Board is responsible for approving regulations and supervising the quality of financial reporting in government. It's also responsible for government accountability and ethics. Is that a fair assessment?
NDP
Gord Johns NDP Courtenay—Alberni, BC
The Treasury Board Secretariat makes recommendations to the Treasury Board on government regulations and spending, and ensures that our tax dollars are spent productively. Is that a fair assessment?
President of the Treasury Board
Yes. You also have to know that the policies direct the authorities that departments have. It depends on which department, so I don't want to generalize that everybody has the same amount. We have policies, as you know—
NDP
Gord Johns NDP Courtenay—Alberni, BC
But your role is to ensure that it's spent productively.
Now, your role is to take the policies and programs approved by cabinet, implement them and make sure that departments have the resources they need to do their work. Is that right?
President of the Treasury Board
My role is to set a policy to enable the departments to be able to do their work.
NDP
Gord Johns NDP Courtenay—Alberni, BC
Yes. You have guidelines. I mean, the NDP, as you know, put forward a motion also to the Auditor General to conduct a performance audit to ensure that your Treasury Board guidelines to the departments are developing credible cost estimates as well. That's something you're aware of.
Your home page states some really important objectives, which I'll focus my questions on today. Those are open government, innovation in the public service and government-wide reporting on spending. I'm sure you're well aware of the concerns we have raised about the more than $600 million and the consulting firms that are.... It's literally a runaway train. Their share of outsourcing was $50 million in 2011. Now it's over half a billion. I would just point that out.
The impact on the public service is real. It's destroying morale and it's erasing institutional capabilities. I just want to highlight that the $15 billion in outsourcing is actually triple the promise your government made yesterday on the health transfer, so this is significant. It's a lot of money.
The Prime Minister in 2015 made an election promise to actually reduce outsourcing and the use of external consultants. These consultants, these six firms.... It's gone up fourfold since your government took power. It had doubled under the Conservatives.
We know the impact this has on morale. My question to you is this: On the current reliance on outsourcing, do you think it's ethical, do you think it's a problem and do you think it's the best value for Canadians?
President of the Treasury Board
First, I'm going to state that we are consistent with the size of the public service. The amount of contracting that we do is almost the same as it was in 2015.
I think we have to make sure that we focus on the fact that we have, as a government, a very ambitious agenda. We talk about housing, infrastructure and even mental health. Therefore, we have to make sure that we have the programs and services in place. With the public service that we have, the hard-working public service, and the complement of working with professional services, this is how we can best deliver programs to Canadians.
NDP
Gord Johns NDP Courtenay—Alberni, BC
I agree. We have good professionals and they can do the job, but this is hurting morale. I know Minister Jaczek tried to dispute that, but I think that, if you talk to the representatives of the workers, they'll tell you clearly that this is having an impact. The Phoenix system, a sole-source contract that ended up costing hundreds of millions of dollars, started with the Conservatives. It was carried forward with your government. It's demoralized the public service. Outsourcing to companies like this means less transparency, lower accountability and the loss of institutional knowledge. Also, problems arise with the overreliance on this approach—the high cost and lack of competition.
We lose accountability, erode capacity and hurt our ability to retain staff. Mr. Barton called it the “new phenomenon” that's going on in consulting. He said that the new phenomenon is that these big consulting firms are spending record amounts of money on research and development, because they're securing such big contracts that they're creating infrastructure on their own. Do you not see a problem with that?
President of the Treasury Board
First, I will tell you, again, when we started in government in 2015 and with the growth of the public service to today, according to what I've had a chance to discuss with my officials, we are investing the same percentage in outsourcing. We have a consistent investment in professional services contracting.
NDP
Gord Johns NDP Courtenay—Alberni, BC
—increase, this runaway ship. A fourfold increase just to these expensive firms is actually not consistent. It wasn't like that 20 years ago. It's becoming consistent. This is one of the recommendations that certainly the NDP is going to make—to stop the runaway train. This is hard for morale, but it's also a high cost to taxpayers. It's not the same as 20 years ago. They're literally embedded now in government. We hear of consultants working side by side with public servants.
I guess my question to you is this: Are you going to stop the runaway train, or are you going to invest in public servants to do the job?
President of the Treasury Board
I am investing, actually, in public servants. I'm going to ask Catherine Luelo to share our IT ambition right now, which is a great example of how we have to make sure that our IT is serving Canadians appropriately and how we are working with the public service and also strengthening the training and expertise.
Please, Catherine, go ahead.
Conservative
The Chair Conservative Kelly McCauley
I'm afraid we're not going to have time for that—perhaps in another round.
Mr. Paul-Hus, again, welcome back to your natural home at OGGO.
You have five minutes, please.
Conservative
Pierre Paul-Hus Conservative Charlesbourg—Haute-Saint-Charles, QC
Thank you, Mr. Chair.
Good afternoon, Minister, and good afternoon to everyone.
As you know, Minister, we are studying expenses incurred for the period from 2011 to 2021. From 2011 to 2013, several hundreds of thousands of dollars were invested at McKinsey by the former Conservative government. In 2014 and 2015, no contracts were awarded to McKinsey & Company. On October 19, 2015, there was a new government, and there was a dramatic increase in the number of contracts awarded to that company.
Can you tell me, from memory, whether there were any guidelines from the Prime Minister's Office encouraging departments to do business with McKinsey & Company?
President of the Treasury Board
No, my understanding of this is that we ask departments and public servants to establish their needs. After that, a competition is held to find firms that can meet these needs.
Conservative
Pierre Paul-Hus Conservative Charlesbourg—Haute-Saint-Charles, QC
When you say "we", are you talking about cabinet or about you yourself, as President of the Treasury Board?
President of the Treasury Board
When I talk about our policies, I am alluding to the Treasury Board Directive on the Management of Procurement. That directive, among other things, enables public servants…
Conservative
Pierre Paul-Hus Conservative Charlesbourg—Haute-Saint-Charles, QC
Okay.
Minister, as I mentioned, in 2014 and 2015, no contracts were awarded to McKinsey & Company. Your government took office and all of a sudden there was an explosion of contracts beginning in 2016. In 2021, contracts worth a total of $32 million were awarded.
Where did the directive to do business with McKinsey come from?
President of the Treasury Board
We have the government procurement management directive, which establishes how the government can award contracts.
Conservative
Pierre Paul-Hus Conservative Charlesbourg—Haute-Saint-Charles, QC
That's fine, minister, but who encouraged the departments to do business with McKinsey?