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.
6:35 p.m.
Conservative
Michael Barrett Conservative Leeds—Grenville—Thousand Islands and Rideau Lakes, ON
It's a super quick question.
Is McKinsey ethical, yes or no?
6:35 p.m.
President and Chief Executive Officer, Business Development Bank of Canada
Again, we've respected our procurement process and we will continue to do so.
6:35 p.m.
Conservative
Michael Barrett Conservative Leeds—Grenville—Thousand Islands and Rideau Lakes, ON
I would say that if you continue to do business with them, then your procurement process is broken.
6:35 p.m.
Conservative
6:35 p.m.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
Thank you, Mr. Chair.
Thank you, Ms. Hudon, for joining us today.
I understand that this was a competitive process and McKinsey was selected. The process was a strategic review based on the challenges that small businesses have faced in the previous two years. Also, it was a process that engaged over 400 members of your organization.
One of the key perspectives that McKinsey seems to have been qualified for was around what other development banks in the world were doing. Is my understanding correct?
6:35 p.m.
President and Chief Executive Officer, Business Development Bank of Canada
Yes.
6:35 p.m.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
Okay. Thank you.
Having said that, can you tell us what other thought leadership McKinsey brought that addressed some of the challenges that small businesses face, especially ones that are part of a start-up and are trying to grow in a very challenging environment?
6:40 p.m.
President and Chief Executive Officer, Business Development Bank of Canada
I have a few comments.
First, we've looked at how we could accelerate the adoption of digital, from both the bank's and the SMEs' perspectives.
Second, one very important output of this strategic review—it was done by both McKinsey and the team internally—was to better understand from a numbers perspective and a qualitative perspective what the market share was that was up for BDC to serve more and better.
It was helpful to take quality time to understand which of the 1.2 million SMEs in Canada are to be served and supported by BDC. We were able to quantify this total addressable market for BDC. We were also able to qualify those clients that today are not receiving the support they should from other financial institutions. It brought us to conclude that if we had started over 10 and 15 years to support some underserved clients, then we need to accelerate this—especially in supporting more women, indigenous, Black and newcomer entrepreneurs, to name only a few.
I will say that this was often discussed internally at the bank. One thing that my new colleagues shared with me when I joined in 2021 was that we would like to keep on being a bank but to put a capital D in BDC, so that we fully play our role as a development bank.
This was a very important outcome of the strategic review. We were able to get there from a number and a qualitative aspect because of the combination of the know-how internally and the expertise we brought in from McKinsey.
6:40 p.m.
Liberal
Majid Jowhari Liberal Richmond Hill, ON
Thank you.
It's clear that the areas of focus for the bank are very much aligned with the area of vulnerability and also opportunity that we saw during the pandemic as it related to small businesses and where it would allow us to grow, such as with Black entrepreneurs, women-led organizations and indigenous organizations.
Now, with about 40 seconds to go, I want to talk about the structure. Was there any recommendation around the existing skill set, any gaps within BDC that this transformation needs to address to ensure that the market you talked about—1.2 million small businesses—could be served better?
February 8th, 2023 / 6:40 p.m.
President and Chief Executive Officer, Business Development Bank of Canada
It did not address this specifically around skills, but we did recognize—and we do recognize today, for example—that to serve those underserved clientele, we need to bring in internally more of those talents so that we learn from them and know how to work and support those clientele. However, it was not specifically addressed.
6:40 p.m.
Conservative
The Chair Conservative Kelly McCauley
Thank you, sir.
We have Ms. Vignola for two and a half minutes and then Mr. Johns for two and a half minutes, please.
6:40 p.m.
Bloc
Julie Vignola Bloc Beauport—Limoilou, QC
The plan submitted to you by McKinsey contained objectives and ways of achieving them.
Is that right?
6:40 p.m.
President and Chief Executive Officer, Business Development Bank of Canada
If I may, Ms. Vignola, the strategic vision that resulted from this review gave us details on the areas we should be focusing on to perform more effectively.
6:40 p.m.
Bloc
Julie Vignola Bloc Beauport—Limoilou, QC
Were you fully in agreement with the details about these areas of focus?
6:40 p.m.
President and Chief Executive Officer, Business Development Bank of Canada
Yes, absolutely, because they reflected our strategic review.
When the management team appeared before the board of directors, it explained the vision that the management team had developed with the support of over 400 internal employees. It wasn't McKinsey that drafted the strategic vision.
6:45 p.m.
Bloc
Julie Vignola Bloc Beauport—Limoilou, QC
Okay.
Would it be possible to see the plan, unredacted, that was submitted to you?
6:45 p.m.
President and Chief Executive Officer, Business Development Bank of Canada
My colleagues have informed me that we are participating fully in the committee's efforts. We will make available to you any documents requested, including those pertaining to the contract.
6:45 p.m.
Bloc
Julie Vignola Bloc Beauport—Limoilou, QC
Are the documents prepared by McKinsey the same as those that were presented to all the BDC teams?
Are there some that have the McKinsey logo on them and others with the BDC logo?
6:45 p.m.
President and Chief Executive Officer, Business Development Bank of Canada
The documents presented were from the BDC, and contained some of the things proposed by McKinsey. Those presented to our Board of Directors had the BDC logo on them.
6:45 p.m.
Bloc
Julie Vignola Bloc Beauport—Limoilou, QC
Okay.
You've been an ambassador, and Mr. Dominic Barton of McKinsey has also been an ambassador. On your management team, there are people who come from McKinsey, like Mr. Barton, who is involved in the Century Initiative and who chaired the Advisory Council on Economic Growth, which recommended the creation of the Canada Infrastructure Bank.
The name of the McKenzie firm pops up just about everywhere in these spheres of activity. Should we be worried about that?
6:45 p.m.
President and Chief Executive Officer, Business Development Bank of Canada
Not at all.
6:45 p.m.
Bloc
Julie Vignola Bloc Beauport—Limoilou, QC
It's perfectly normal. It's only to be expected that people who are, or who have been, with McKinsey should turn up in our infrastructures.
Is that it?
6:45 p.m.
Conservative
The Chair Conservative Kelly McCauley
I'm afraid that's our time, Ms. Vignola.
If you have a further response, maybe you can provide it in writing.
Mr. Johns, you have two and a half minutes, please.
6:45 p.m.
NDP
Gord Johns NDP Courtenay—Alberni, BC
Ms. Hudon, the BDC hired four of your former colleagues. All four worked at Sun Life during your time there between 2010 and 2017.
According to a BDC spokesperson, you had a role in at least two of those hires. For the two that you hired with your involvement, what positions did they have at Sun Life and what positions were they given at BDC?