Government Operations Committee on March 20th, 2023

[Anita Anand, Liberal, Oakville, ON]

This is targeted and time-limited work that is being done in the provision of services.

In terms of the register, I would expect all companies to comply with their obligations under any statute. I would also expect all corporations to hold themselves to the highest ethical standards. That is one of the purposes of our integrity regime operating out of PSPC.

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

So if the companies are not registered lobbyists, they ought to be. However, if they are not, couldn't they be penalized in some way, or simply rapped on the knuckles, before just being told to go and register?

[Anita Anand, Liberal, Oakville, ON]

At the Department of National Defence, which is where I am currently located, the obligation is to ensure that we are receiving the services that were contracted for, using high ethical standards. The integrity regime itself and the management of that regime occurs at Public Services and Procurement Canada.

I believe you already discussed the situation with the minister, Helena Jaczek,

[The Chair, Conservative, Kelly McCauley]

Thank you, Minister.

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

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

Minister, DND entered into a contract with McKinsey related to the digital transformation of the Canadian joint operations command. That contract is to advise and assist in the development of a transformational staffing plan.

McKinsey was contracted to analyze each category of the CJOC personnel, including public servants and contracted employees, to develop recommendations to evolve the workforce. Roles and responsibilities included onboarding and orientation, skills and training, organizational changes and the list goes on.

Did McKinsey make any recommendations regarding the number of federal public servants versus the number of contract employees? Did they make any recommendations regarding the roles and responsibilities of either personnel category?

[Anita Anand, Liberal, Oakville, ON]

That contract was to develop recommendations and proposals for CJOC headquarters' human resources strategy, so that the transformation necessary would occur over a 15-year period.

In terms of your specific question, I'll ask General Eyre if he could comment on it.

[Gen Wayne D. Eyre]

I also have a member of CJOC sitting behind us here. Perhaps in the second session, if there are more detailed questions, we can refer the questions to him.

Basically, over the term of these two contracts, there was assistance given to CJOC in developing a long-term human resources strategy that also helped to codify the terms of reference for each of the key positions, establishing clear roles and responsibilities for the headquarters. Understanding the pace of operations is pretty high, and we put that headquarters through a lot. Gaining greater efficiency and greater value from the staff we have there, that's where the focus was.

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

Okay.

The same contract with McKinsey, they're making recommendations on which elements of CJOC headquarters service delivery are best suited for contractor delivery. One of my biggest concerns throughout this whole study has been that the government is letting consultants develop more and more work for themselves.

Minister, maybe McKinsey, an outside contractor, is developing plans for staffing and contract employees. Does that concern you and do you think there's a conflict of interest here? Do you think that the military and public service personnel, with their inside knowledge, loyalty and service, would be better suited to do this?

[The Chair, Conservative, Kelly McCauley]

I'm afraid that is our time. Perhaps you could get back to us in the next round for Mr. Johns.

We have Mr. Barrett for five minutes, please.

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

Thanks, Chair.

Thanks to you, Minister, and to the rest of the panellists for being here today. I'll echo the comments of my colleagues in thanking you and everyone under your command for their service to our country.

Minister, on your explanation that someone from outside the Canadian Armed Forces needed to be brought in because the Canadian Armed Forces as an organization wasn't credible on certain aspects of improving culture and had systemic issues on culture, I would submit to you that McKinsey isn't that credible party to do that and has demonstrated on the public record, as a matter of public record, their lack of credibility. An organization that advised Purdue Pharma to pay out bonuses to pharmacists who prescribed OxyContin, resulting in overdoses, or, as was mentioned by one of my colleagues, and that held a corporate retreat next to a concentration camp where Uighur Muslims were interned in China, is not the solution. McKinsey is not the solution to culture in our Canadian Forces.

I want to talk about culture and, as Lieutenant-General Carignan described it, the beating heart of our military. I look at the $15 million that was spent on these contracts and I think of how else we could have improved culture in the Canadian Forces. I would use as an example my alma mater, the Canadian Forces School of Communications and Electronics in Kingston. I would like to ask you what you make of the state of accommodations for our troops at CFSCE in Kingston.

[Anita Anand, Liberal, Oakville, ON]

We are always looking to ensure that we provide the equipment, the infrastructure and the resources needed for the Canadian Armed Forces to do their important work on behalf of our country.

In terms of the first part of your intervention, I will say that I agree: Integrity is extremely important. The role I am playing here is to speak to the contracts of McKinsey with the Department of National Defence. I am not here to defend their conduct in any other situation.

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

Okay.

On the state of CFSCE in Kingston, it's reported that the quarters currently comprise four-person rooms with poor HVAC, insufficient personal storage, frequently broken shared facilities, no privacy, no kitchenettes, no cable connections and no private bathrooms or access to bulk storage. Is there anything being done to remedy that, to your knowledge?

[Anita Anand, Liberal, Oakville, ON]

We are very focused on ensuring that the Canadian Armed Forces' living arrangements, resources and equipment capabilities are improved, and we will continue to focus on that. I know that my deputy minister recently visited Kingston with this in mind so that we can continue to do our best for the men and women who serve our country so honourably.

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

Minister, do you know how many single rooms are required to house members who will be training at CFSCE for longer than six months? I can tell you the answer. It's 150. The number of rooms being offered by CFB Kingston is 47.

We were just talking about culture, and I wonder what it does to the culture of our Canadian Forces and to the morale of our members, our non-commissioned members, the beating heart of our military, when they don't have a place to lay their heads during their training. They are exposed to mould, to rodent infestations and to not having adequate bathroom facilities. My assessment of it is that it's egregious, and I just wonder how much effort and how quickly under your leadership you're prepared to remedy that.

[Anita Anand, Liberal, Oakville, ON]

I appreciate the intervention. I think it is extremely important for us to focus on issues relating to housing and the cost of living in terms of the Canadian Armed Forces. I will ask my chief of the defence staff if he could speak to this issue, as it falls directly under his leadership as well.

[The Chair, Conservative, Kelly McCauley]

I am afraid that is our time. Perhaps you could come back to Mr. Barrett and the committee with a written submission, please.

Mr. Bains, you have five minutes, please.

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

Thank you, Mr. Chair.

Thank you, Minister, and to your colleagues for joining us today. I too have a long family history of military service and border service, so I truly appreciate the work you do.

Minister, can you expand on the security processes that ensure that any contractor or outside supplier that works with National Defence does not pose a security risk? We've heard that these contracts are HR and administration contracts. What is the recourse if there is anything untoward in fulfilling these contracts?

[Anita Anand, Liberal, Oakville, ON]

Sure. Let me start with contracts. In them, there are standard clauses that include a number of clauses to protect against conflicts of interest.

Let me give you some examples. Suppliers are required to maintain the confidentiality of all information provided to them in connection with a contract. They can't disclose any such information without the written permission of the Government of Canada. They're also required to follow the applicable security measures in the contract.

Through our contracting process, we maintain the necessary protections in place for confidentiality of information, as well as for ensuring that conflicts of interest are not occurring. We are always looking to do better, and I hope the work of this committee is substantively present to enable us to do that. I'll be following that work with great interest.

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

Thank you.

To Vice-Admiral Topshee, you were finishing a point. Maybe you can expand a little bit more on that.

[VAdm Angus Topshee]

Absolutely.

As I was saying, in the three contracts for McKinsey, the first was to just identify meaningful and tangible things we could do. The second was to begin delivering on what we call the digital parade state, which is operationalizing an HR management tool that is digital and more effective. We realized how useful that was, but we wanted that capability in-house. The third contract was about how we build the teams to be able to keep doing these types of initiatives.

We've had no further contracts with McKinsey, because we now have an in-house app development and digitalization team that has learned a tremendous amount based on the quick start they got from the McKinsey contracts.

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

Just expanding on that, was there a recruitment process that took place for the in-house...or how did you develop that?

[VAdm Angus Topshee]

Some of the work was done by McKinsey in assisting us to identify the right types of talents we needed. I was part of the first contract in my previous role as the assistant chief of naval staff for personnel and training. I did not know the components of a digital team. I did not know the role of a product owner, product manager or scrum master in a digital context, or the notion of sprints and how to go through an app development process.

Once we identified the skill sets that were required and saw the experience types and what sort of innovative approach needed to be done, we were able to identify those people within our organization. The challenge since then has been retaining them. We have some very talented people. Once they become known, they are hired by other companies—not necessarily by McKinsey but by others.

We have a robust team now. We've found that we can actually manage to find this digital talent with the very people who are coming into the Royal Canadian Navy and the Canadian Armed Forces.

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

Thank you.

In regard to the benefit of the defence team looking outside the organization in certain incidences where significant modernization is needed quickly, is there any other area that you think we need to look at?

[VAdm Angus Topshee]

There are a host of areas where we can always improve. Most of that work we do in-house. We have a strong team of people in the navy who are constantly looking at our allies and adversaries around the world and identifying the practices we need to adopt in order to be the best possible maritime force for Canada.

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

Thank you.

How much time do I have?