Government Operations Committee on Feb. 8th, 2023

[Catherine Luelo]

Yes, I've had discussions with McKinsey. Simply, in my involvement in the Canadian ecosystem, McKinsey is a vendor that I dealt with in the private sector. I had one conversation when I started and it was part of the Phoenix discussion with McKinsey when they presented their outcomes.

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

Was it you or someone from McKinsey who requested this conversation?

[Catherine Luelo]

Concerning the discussion related to Phoenix, I was invited. The discussion with them when I first started was an email exchange. It very well could have been initiated by me, but I'd reached out to all of the partners that I'd worked with within the Canadian marketplace.

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

When you receive a request like this, do you always check to see whether the company is on the lobbyists list?

[Catherine Luelo]

My office does that check.

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

Okay.

Ms. Fortier, Were any policies, objectives or regulations created or changed further to recommendations made by McKinsey or by any of its members sitting on the board of directors for an economic lobby group or on any other boards of directors?

[Mona Fortier]

The Treasury Board has not made any commitments to McKinsey & Company. The answer is therefore no.

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

How about more generally in the government?

[Mona Fortier]

I am not aware of every kind of approaches that may have been made by McKinsey to the departments. You would have to ask the departments that received services from the company.

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

Thank you.

[The Chair, Conservative, Kelly McCauley]

Thank you.

We have Mr. Johns for two and a half minutes, please.

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

Thank you.

We know that a consultant's job is to make sure that they have work and that they're going to create jobs for themselves in the future.

The public service is there to hold truth to power. It's important. One of the consequences of outsourcing that's been brought up by other experts in their testimony at this committee is the profit margin that these consultants make. The result is that Canadians pay more for services than less.

Has the Treasury Board Secretariat made any attempts to calculate or estimate the total value lost due to outsourcing contracts, and if so, what was the amount reached? I guess I'm specifically talking about the profit margin consultants take and the fees charged by middlemen who subcontract the responsibilities away.

[Mona Fortier]

Again, I might bring you back to the fact that deputy ministers are responsible for ensuring the careful, responsible stewardship of public funds and that the departments have the tools to assess the performance of the contracts. Also, as you probably know, the lowest price is not always the best value, so it's important that it's—

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

Okay—

[Mona Fortier]

It's important for you to know that it is through the deputy ministers.

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

I don't think that answer gives a lot of confidence, given what's going on with the amount of subcontracting. We've seen example after example. I'm concerned that the Prime Minister's commitment in 2015 has totally fallen off the chart and that both you and Minister Jaczek feel confident about the course you're taking and that the morale of the public service is fine. That's not what we're hearing.

The public service, we know, is mired in excessive rules and oversight, which makes it difficult for public servants to move quickly and be innovative. This is part of a government obsession with risk aversion, and it makes it incredibly difficult to do anything at all. A public servant in 2021 needed to produce 45 different documents, almost 40,000 words, just for a simple four-page website listing of government services.

Why don't you trust public servants to use their judgment and exercise their creativity and innovation, but you trust consulting companies to do both?

[Mona Fortier]

First off—

[The Chair, Conservative, Kelly McCauley]

Give a short answer, please.

[Mona Fortier]

—I would really like to state the fact that the public service has the talent and the expertise. We have just been through difficult times, and they have delivered. I cannot start saying how we can complement the work the public service is doing to make sure that we drive and we deliver our very ambitious agenda.

[The Chair, Conservative, Kelly McCauley]

Thank you, Minister.

Mr. Genuis, go ahead, please.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Thank you.

Minister, McKinsey worked for Purdue Pharma for 15 years. In the course of that time, McKinsey provided advice to Purdue Pharma on how to turbocharge the opioid crisis. That advice included offering bonuses to pharmacists for overdoses. McKinsey had to pay over half a billion dollars in compensation in the United States for that. They've paid no compensation thus far in Canada. They have also done work for Russian and Chinese state-owned companies, including ones under sanctions.

I've asked you this several times. You haven't answered it. I will ask you one more time and give you 60 seconds of uninterrupted time to answer.

Do you believe that McKinsey is an ethical company, yes or no? I'll go over to you.

[Mona Fortier]

Again, I will respond in the same way that I have since the beginning. We've had an integrity regime since 2015 that was voted in by the previous government. We are utilizing this integrity regime to make sure that it holds the suppliers accountable for their misconduct. We know that it also encourages co-operation with legal authorities and the taking of corrective actions if necessary.

Under the integrity regime, as you know, a supplier that has in the past three years been convicted of an offence listed in the ineligibility and suspension policy will be declared ineligible for a period of 10 years. That's what we have in our directive. At this time, McKinsey is not deemed to be an ineligible supplier under the integrity regime.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Thank you, Minister. That was the 60 seconds.

Now, I think it's pretty clear that you did not answer the question about whether you think McKinsey is an ethical company. We have to evaluate here whether this integrity regime you're talking about is actually working. I would put it to you that if a company like McKinsey, with all they've done—fuelling the opioid crisis, advising Chinese and Russian state-affiliated companies—passes your integrity regime, then we have a problem with the integrity regime.

Do you think the integrity regime as it presently exists is working well, yes or no?

[Mona Fortier]

I believe that the integrity regime that was put in place by the previous government and continued with this government.... If we want to look at it again, that is something you might want to recommend in your committee's report. I will welcome that.

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

In your view, though, is it working well?