Government Operations Committee on March 20th, 2023

[The Chair, Conservative, Kelly McCauley]

You have 25 seconds.

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

Thank you again for your service.

[The Chair, Conservative, Kelly McCauley]

Thank you.

Mrs. Block, you have five minutes, please.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much, Mr. Chair.

I echo the comments of my colleagues in welcoming you here and thanking you very much for your service to our country.

Madam Minister, given your adamant defence of the need for and your choice of McKinsey, and given the insistence that the information you were sharing with McKinsey was not sensitive, that it was simply HR benchmarking or not sensitive subject matter in the contracts because it was not highly secretive, I want to show you one of the pages that we received as a committee. It's blank. That's because it's been redacted. This committee was very clear in its order for unredacted documents. However, many departments have made the decision and have taken it upon themselves to determine that they have the right to limit the powers of the House of Commons.

Minister, we received a letter from your department about the redactions made. I just showed you one page. I have more. They were made or done in the name of security, yet you have just stated here that these were not security matters. I'm wondering if you could explain why many of the redactions included the number of weeks McKinsey worked, their weekly pricing and descriptions of the services they offered. Who ordered these redactions? If it wasn't you, who was it and why?

[Anita Anand, Liberal, Oakville, ON]

We have made every effort while respecting disclosure requirements. I will say that the contract is between McKinsey and the Government of Canada. We are both, as contracting parties, required to comply with the confidentiality provisions in that contract. On the other hand, we don't have that same contract with you or Parm or any other member on the committee. We are respecting the terms of the contract and complying with the disclosure requirements to the best of our ability.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

In so doing, Minister, you are impeding the work of a standing committee of the Parliament of Canada and the work of the House of Commons. It may have served you better if you had confirmed your story with your cabinet colleagues. In the documents from PSPC, they did not redact these weekly breakdowns. Perhaps this is because DND was paying exorbitant prices, much higher than PSPC.

Again I will ask you why you felt that you could override the rights of Parliament and redact the weekly prices paid for services from McKinsey.

[Anita Anand, Liberal, Oakville, ON]

As mentioned, I was not the minister at the time. I will ask my deputy minister if he can elaborate on that question.

[Bill Matthews]

Certainly. I'll be very quick on this.

The test we are using in terms of redactions is built around the same test used for access to information. That would include commercially confidential information. We are trying our best to align with other departments in terms of consistent approaches, but given the timelines and the volume of documents, there are a number of inconsistencies, I'm sure. We're doing our best to work through that process.

Specifically around the weeks and prices, etc., the answer is that it's commercially confidential information.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Yet it was provided through PSPC....

We heard from McKinsey that government clients asked them to make redactions from the documents they were providing to this committee. Did you or any of your staff or those of your office or your department, or an organization under the supervision of your department, ask McKinsey to make these redactions?

[Bill Matthews]

I am not aware of and I certainly have not made any specific requests, but I am happy to take that back and check with the department to see if there have been such requests. The consistency in interpretation around the contract itself is important, but I will take that back and see if I can provide a better explanation.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much.

I have one last question.

For the services provided by McKinsey, most of the descriptions have been redacted. This means that there has been millions of dollars of spending on outside consultants and we don't know why.

Madam Minister, you stated at the beginning of one of your interventions that you take the work of OGGO very seriously. I am sure you can understand that it is our duty to be monitoring the spending of government and to be asking these questions. I really believe that the redaction of this kind of information is egregious to this committee. I would ask that the information we've been calling for be provided to this committee.

[The Chair, Conservative, Kelly McCauley]

That is our time, Ms. Block.

We have Ms. Thompson for five minutes, please.

[Joanne Thompson, Liberal, St. John's East, NL]

Thank you, Mr. Chair.

Welcome, Minister, to the committee, and certainly thank you to all of the witnesses for the work you do. We're very grateful for it.

Minister, I will begin with you. I realize that you've already spoken to this, but if there's anything in addition that you would like to add surrounding the challenges that resulted in the implementation of the McKinsey contract, and what a culture change that is and the extent of the culture change that you're trying to address within the military entails, please do. What benefits, if any, are you beginning to realize? I do know this is quite a long time frame in terms of turning this around. Are you starting to see any opportunities from the McKinsey work to really influence the shift in culture?

[Anita Anand, Liberal, Oakville, ON]

First, I want to respond with regard to some of the previous questions. The value of the contracts awarded to McKinsey in 2021-22 of approximately $17 million represented 0.07% of our overall expenditures that year. The idea embedded in this figure is that it's a very low amount of our overall expenditures.

In terms of your question, the third party expertise allows us to ensure that we have practices that are consistent with those of our allies in terms of our defence team, especially in the area of culture change, where we are embarking on urgent systemic change. The third party expertise serves as an enabling function to support our people. It constitutes a very small amount of our defence budget, as I mentioned.

I also want to focus on the importance of moving quickly in this era. Without that expertise that was done on a very rapid basis, we wouldn't have as many of the road maps in place that we currently do.

I will ask General Carignan if she would like to elaborate with the details.

[LGen Jennie Carignan]

Thank you, Madam Minister.

When we kick-started our culture change two years ago, there were three main things that we needed to address very quickly. These were informed by the consultations that we had with defence team members, with marginalized groups and with affected members. The consultations took place, and then we were immediately able to identify priorities.

One of them was on the complaint system, where the feedback we got from victims was that putting in a complaint was more harmful than the harm caused by the source of the complaint itself. We immediately set forward initiatives to address our complaint system, which is extremely complex. We needed to consult to get to the root cause of the issues and then, finally, we needed to consolidate the 500-plus recommendations we had within our system that were spread between 19 different reports so that we could track, consolidate and understand which ones were duplicates, which ones were repetitive and which ones were contradictions of another, in order to conduct all of that analysis. This is why we immediately set forth these three specific initiatives when we kick-started the culture change in 2021.

As we move into 2022-23, CPCC's reliance on contracts is already smaller than it was in the first year of CPCC's getting settled. Furthermore, we are not relying strictly on McKinsey, as we have five other firms with whom we are consulting on various other types of projects.

[Joanne Thompson, Liberal, St. John's East, NL]

Thank you.

I quickly want to follow up on that. I realize it's very early days in this—

[The Chair, Conservative, Kelly McCauley]

Thanks. That is our time.

[Joanne Thompson, Liberal, St. John's East, NL]

I'm sorry. Thank you.

[The Chair, Conservative, Kelly McCauley]

We'll go to Ms. Vignola for two and a half minutes, please.

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

Thank you very much, Mr. Chair.

Minister, in 2015, before the increase in the number of contracts awarded to McKinsey, the government had decided against Lockheed Martin's F‑35 aircraft. However, that company's return to the good graces of the government corresponds with the increased number of contracts awarded to McKinsey, one of whose clients is Lockheed Martin.

What influence might McKinsey have had on the government's decision to return to Lockheed Martin? How can you be sure there was none?

[Anita Anand, Liberal, Oakville, ON]

There is no link between the two suppliers. As you may be aware, the Lockheed Martin decision was the outcome of an independent process carried out by Public Services and Procurement Canada. It's a very important procurement for the Canadian Armed Forces, as well as for our country and its security.

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

Thank you. In a document we received about a contract, McKinsey specified that its advice was not personalized, but rather based on its lengthy experience.

How can the Department of National Defence make sure that it is receiving advice based on Canada's requirements and the needs of Canadian Armed Forces members, rather than just generic advice that could be applicable to more than one country?

[Anita Anand, Liberal, Oakville, ON]

That's dealt with in our supplier contracts. We make sure that our contracts specify the objectives to be met and the supplier cannot go beyond the scope of these objectives.

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

I'd like to very briefly return to the two studies conducted by McKinsey, on the internal culture of your department, and Ms. Arbour's study. I'd like to know why it was essential to have a separate study performed by McKinsey as compared to Ms. Arbour's, and why it had to be done within approximately the same time span.

[The Chair, Conservative, Kelly McCauley]

I'm afraid that is our time. Perhaps you can get back to the committee with a response.

We'll go to Mr. Johns for two and a half minutes, please.