Government Operations Committee on Feb. 8th, 2023

[Isabelle Hudon]

I cannot compare, as I joined in 2021, but as I referred to in my opening statement, BDC Capital was able.... The vision around BDC Capital 11 years ago is very much comparable to the quality of what was delivered in 2021. The secret is how you deliver on the strategy.

[Parm Bains, Liberal, Steveston—Richmond East, BC]

You indicated you're quite new. You are the first woman CEO of BDC. How have you been working to support women-led businesses, and what are your goals for the future?

[Isabelle Hudon]

I think I'm known and renowned to be passionate about gender parity and seeing more women in key roles having success and reaching success.

For now, we have a bit more than 10% of our portfolio that is supporting underserved clientele, including women. You have probably seen in the last year that we have announced a Thrive platform. It's half a billion dollars totally dedicated to women entrepreneurs. It is there as a development bank to make a real difference for our women entrepreneurs in Canada.

[Parm Bains, Liberal, Steveston—Richmond East, BC]

The clean technology sector is also growing and becoming increasingly important, as we all know. How is BDC contributing to the development of the clean technology sector in Canada?

[Isabelle Hudon]

That's another big success for BDC. BDC Capital launched the first clean-tech fund five years ago. We have just renewed a second fund, the climate fund, with $400 million. We have now invested up to $1 billion in the clean-tech sector in Canada.

[Parm Bains, Liberal, Steveston—Richmond East, BC]

How does BDC determine whether it's going to develop projects in-house or contract them out?

[Isabelle Hudon]

We look at our capacity internally, and I have to say, when it's up to delivering projects, it's done internally. When we feel we need to bring extra expertise to the table, that's when we think about bringing in consulting firms.

[Parm Bains, Liberal, Steveston—Richmond East, BC]

Those are all of the questions I have. Thank you.

[The Chair, Conservative, Kelly McCauley]

Thanks, Mr. Bains.

We have Ms. Vignola, please, for six minutes.

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

Thank you very much, Mr. Chair.

Thank you, Ms. Hudon, for being here with us this evening.

You spoke earlier about needing to call upon the services of McKinsey and Company or another consulting firm to develop an action plan for the future. Among other things, it was to be able to respond more effectively to what the SMEs were asking for.

Which of the existing practices were obsolete?

[Isabelle Hudon]

Thank you for the question.

The purpose of the strategic exercise was not to address any particular weaknesses in the organization. As we had always been there to serve Canadian SMEs for the past 78 years, and as we were just coming out of a pandemic and the working environment had completely changed, we wanted our development bank to be extremely efficient. And we still want to be. I place an emphasis on the word "development", which is part of our name, the Business Development Bank of Canada.

We wanted to look into the future and ask what might have happened in the SME sector as a result of the pandemic, and we wanted to determine what we could do differently or what more we could do for SMEs. The first task, which proved highly useful, was to understand the BDC's part of the market.

Our mandate is to work in tandem with private sector financial institutions. Our role is definitely complementary and we have to understand our part of the market. Not only do we have to quantify it, but also qualify it…

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

Thank you very much.

I can understand that there were areas that needed to be clarified after the kind of upheaval that results from a pandemic. At McKinsey and other consulting firms, how many people had already experienced a pandemic and help to deal with the impacts of a crisis of that kind?

[Isabelle Hudon]

To be honest, very few people around the world have gone though anything like that.

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

Thank you.

My idea of the role to be played by someone in a leadership position, as the head of a company, is precisely to come up with development strategies. I'm hearing consultants being described as specialists, but there are no specialists in pandemics. I think the only specialists in that area are probably historians and epidemiologists.

From among your 400 colleagues and the members of the management team, was there no one who could identify the goals BDC should set, and the extent to which they could achieve them?

Was it really necessary to compare yourselves to others without really knowing what was involved, because McKinsey doesn't disclose information about its clients? It could be information about countries that we are not exactly friendly with, and us being compared to them to determine what we should be doing and how we want to help our own people.

Why not use BDC specialists?

[Isabelle Hudon]

First of all, much of the information that led to the strategic review came from inside. What we received from McKinsey was not advice on pandemic management but rather economic advice about SMEs.

McKinsey provided us with comparable international data and data from other development banks. We were also able to increase our team's ability to properly understand data and correctly target areas where we should be doing better and hence do more for our SMEs.

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

Could you just remind me of when you joined BDC?

[Isabelle Hudon]

It was the summer of 2021.

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

How many former McKinsey employees are there on the BDC management team?

[Isabelle Hudon]

One.

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

Who might that person be?

[Isabelle Hudon]

It's Ms. Véronique Dorval.

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

Okay.

When was she hired?

[Isabelle Hudon]

She was hired less than six months ago.

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

All right.

When was the contract awarded to McKinsey & Company?

[Isabelle Hudon]

I'd like to clarify something. She left McKinsey nine years ago.