Government Operations Committee on Feb. 13th, 2023

[David Hutton]

I think it's strange that public servants would be counselled in that way. I think public servants are very reluctant to do anything or say anything that will end up in publicity. Whistle-blowers who are coming forward with serious problems that could even be life-threatening almost never go to the media; they go up the chain of command. They don't go outside the organization.

Research indicates that perhaps 1% or 2% of all whistle-blowers—

[The Chair, Conservative, Kelly McCauley]

I'm sorry. Is there a translation problem again?

[Jean-Denis Garon, Bloc, Mirabel, QC]

Yes.

Would it be possible to adjust the time? There has been no interpretation for a few seconds, make that about fifteen seconds. I did not understand anything.

[The Chair, Conservative, Kelly McCauley]

Madam Clerk, my French is not good enough to follow Mr. Garon.

Bear with us for one minute, please.

Go ahead, Mr. Garon. We'll try again. We'll see if there's less of a gap.

[Jean-Denis Garon, Bloc, Mirabel, QC]

You can continue, Mr. Hutton.

I was asking if our whistleblowers are adequately protected.

[David Hutton]

No. They are not adequately protected, and people in this committee are mostly very clear about that.

On your point about public servants being worried about bad publicity or saying anything that might get out into the media, we've seen some examples of that happening. Those are really desperate situations when people feel that they have to go that far. Even for people who are dealing with serious issues and whistle-blowers are coming forward, research indicates—

[Jean-Denis Garon, Bloc, Mirabel, QC]

Please tell me in concise terms, because time is getting on, if changes could be made to the legislation to better protect public servants who make disclosures.

[David Hutton]

Absolutely, yes. Lots of other countries are doing this. We know what works and what doesn't. It's a simple matter, really, to change the legislation to make this system work better.

[Jean-Denis Garon, Bloc, Mirabel, QC]

Thank you.

Public servants who go on to work in the private sector are bound by strict ethical standards.

What should we think about firms that are doing pro bono work for the federal government and afterwards go on to do business with the government? Shouldn't some sort of arm's length be imposed? Should we accept this? Is this ethical?

[David Hutton]

That question is I think a really good one, and it's one I haven't thought about a lot, so I'm not sure I can give you a good answer.

I would say that it's a real issue and that you'd have to look at the situation. I'm sure the people around you can provide good answers as to what kinds of standards and limitations should be applied in that situation. It's not something you can ignore.

[The Chair, Conservative, Kelly McCauley]

Thank you, Mr. Garon.

Thanks, Mr. Hutton.

Dr. Thomas and Professor Duguay, maybe you could answer in writing if you have a written response to Mr. Garon's question.

Mr. Johns, I haven't forgotten about you. You have two and a half minutes, please.

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

Mr. Hutton, maybe you can speak about how McKinsey maintains and exploits its prestigious status, which we've heard about from both of you. Maybe you could speak about whether this is typical of the bigger firms and the other consulting firms like Deloitte and PricewaterhouseCoopers. Should we be concerned about it?

[David Hutton]

All big consulting firms have to be very effective at marketing their services. They have thousands of people and need a constant revenue stream in keeping all these folks busy.

McKinsey kind of stands out as being extremely prestigious and having created this kind of top-dog situation that they're able to exploit to maintain that status. They have, as I've indicated, very close relationships with all kinds of senior people and decision-makers and with governments and corporations around the world. They have a very active and effective alumni system, whereby anyone who has ever been a McKinsey employee is now in this ecosytem, this massive network that's extraordinarily well connected, and who, because of that, is also on a kind of escalator towards other senior positions, because that network is used actively by headhunters and so on.

It's the kind of situation where the guy at the top of the hill is able to stand off everybody else and use their position to maintain that.

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

You also talked at the opening about giving advice or suggestions you had for the committee regarding the direction of this study, and maybe some advice on how we can improve contracting oversight and reduce the government's use of outsourcing.

[David Hutton]

Yes, and I've partly answered that question already.

Obviously whistle-blowing is not the answer to everything, but it's a tool that can act as a last resort when everything else has failed to expose things that are going wrong. It's not necessarily to do with deliberate wrongdoing—it can be just incompetence or whatever—but if there's public harm, then the employees involved are often the last resource you have available, and research also indicates that it is by far the most effective way of uncovering these situations.

The other mechanisms we have—the audits, the external reviews and so on—just don't work nearly as well and are actually quite ineffective unless they're complemented by whistle-blower protection.

I think it is one of the tools that we really badly need, and we're really at the back of the bus in Canada and far behind the rest of the world.

[The Chair, Conservative, Kelly McCauley]

Thanks, Mr. Hutton. Thank you, Mr. Johns.

Colleagues, we're running a bit long, so the final two interventions will be three minutes.

We'll go to Mr. Barrett, and then there will be three minutes for Mr. Kusmierczyk.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

Thanks, Chair.

Mr. Hutton, do you find it odd that McKinsey would have zero registrations or would appear zero times in the lobbyist registry?

[David Hutton]

I don't know enough about that registry and how it works to say whether they should be registering.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

We've seen emails from McKinsey—it's a giant company—pitching their business to the government. I think that if you asked someone on the street if that sounded like a lobbying effort and if it looked like a lobbying effort, they would probably say that it's a lobbying effort.

Knowing that they are pitching their business to the Government of Canada—that's established—do you find that this creates a problematic circumstance?

[David Hutton]

I agree that it doesn't look good.

I would say that from the little I do know about lobbying systems, I think it's yet another weak system that's put in place supposedly to provide some limitations and control over lobbying but probably really doesn't work very well.

[Michael Barrett, Conservative, Leeds—Grenville—Thousand Islands and Rideau Lakes, ON]

During a previous exchange with another member, there were questions about whistle-blowers and what that has to do with this particular company.

The issue of the massive contracts and the rapid expansion of those contracts with McKinsey, particularly at IRCC, came to light because public servants blew the whistle. They talked about the perceived lack of value for money that Canadians were getting. They were really unclear on what was being done in the department, but they were clear that in their view, McKinsey was shaping departmental policy.

Isn't that exactly what whistle-blowers do? They speak out about this.

[David Hutton]

Yes, it is.

The point I was trying to make earlier, perhaps not very eloquently, was that it's just the tip of the iceberg. Those people who went “external”, if you like, and went to the media are taking a tremendous risk. It's a last resort. Research indicates that only 1% or 2% of whistle-blowers resort to going out to the media, even when everything else has failed.

For every story you read in the media, you can say there are probably another 50 that are similar that we'll never hear anything about because the whistle-blowers get crushed into silence.

[The Chair, Conservative, Kelly McCauley]

Thanks, Mr. Barrett.

Mr. Kusmierczyk, you have three minutes.

[Irek Kusmierczyk, Liberal, Windsor—Tecumseh, ON]

Thank you, Mr. Chair.

Professor Duguay, we heard in previous testimony that McKinsey has over 10,000 clients and cases that they deal with in any one year around the world. Here in Canada, a very tiny fraction of their portfolio is actually the Government of Canada. Most of their work is private sector, not-for-profit and elsewhere.

Does a company like McKinsey bring value to customers? Would they have such a large portfolio around the world if they did not bring value to their customers?

[Dr. Benoit Duguay]

They would certainly not be in the position they are if they did not provide value. However, providing value by working with two parties with opposing interests, for me, is not very ethical. They do provide value in every instance, or else they would not be in business.

There are such things as ethics, in my mind. I would not behave in such a manner.