Government Operations Committee on March 29th, 2023

[The Chair, Conservative, Kelly McCauley]

Thanks.

Mr. Genuis, you have five minutes, please.

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

Thank you.

Mr. Palter, respectfully, I think the company you work for is disgusting. I think your efforts to whitewash its conduct around the world aren't going to fool anybody who's familiar with McKinsey's track record.

These are issues we take very seriously as a committee.

You say McKinsey refuses work sometimes, presumably on the basis of some ethical criteria, but you are a company that literally held a corporate retreat down the road from a concentration camp in Kashgar, and then claimed unfamiliarity with the Uighur genocide, even though reports about it had been all over UN reports and all over the news prior to that.

Specifically, I want to ask you this. You claim that your work is guided by the Economist's democracy index. I'm skeptical about that claim. Can you tell us specifically which Russian state-owned companies McKinsey has worked for since Russia invaded Ukraine in 2014?

Go ahead, please.

[Robert Palter]

Let me start by restating this: McKinsey is an ethical company.

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

Could you actually just answer the question, though? Which Russian state-owned companies has McKinsey worked for since Russia invaded Ukraine in 2014?

[Robert Palter]

McKinsey is an ethical company. I wake up every day knowing it's an ethical company. I know the 1,100 people who work in Canada know it's an ethical company—

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

Yes, and I wake up every day knowing it's not, but can you answer the question I just asked?

Which Russian state-owned companies has McKinsey worked for since Russia invaded Ukraine in 2014?

[Robert Palter]

I'm the managing partner of McKinsey Canada. I have spent 28 years of my life in Canada. The bulk of my work and bulk of my time is leading our operations in Canada.

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

Mr. Chair, can you bring the witness to order and inform him of his obligation to answer questions from committee members?

[The Chair, Conservative, Kelly McCauley]

The member has a point. If you could, get back to the question at hand, Mr. Palter.

[Robert Palter]

I'm trying to answer the question.

I don't know the specifics of what we have done. As I said, we—

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

You don't know which Russian state-owned companies McKinsey has worked for since 2014.

[Robert Palter]

That's correct.

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

Okay.

Are you aware of McKinsey's work for the China Communications Construction Company?

[Robert Palter]

Again, Mr. Chair, I lead the Canadian practice. The bulk of my time is in Canada.

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

You're unaware. Is that what you're telling us?

[Robert Palter]

What I am saying is that I know we have operations in China, and I know the vast majority of our work in China is for multinational corporations.

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

You work extensively for Chinese state-owned and state-affiliated companies. That's already a matter of public record. You just haven't been willing to release the names of the companies.

Are you familiar with China Communications Construction Company?

[Robert Palter]

I am not familiar.

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

It's striking that this is a similar sort of communications tactic to what we saw from Mr. Barton, which is to say he wasn't aware of a lot of things.

It's striking to me that I seem to know more about McKinsey's clients, or at least the names of the clients from media reports, than some of the McKinsey executives or former executives we've had before the committee.

Let me ask you a question I'm fairly sure you can answer, though. Have you personally worked on Government of Canada contracts?

[Robert Palter]

Yes, I have.

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

What's your hourly rate when working on those contracts?

[Robert Palter]

McKinsey doesn't have an hourly rate. We're actually only allowed to charge on firm fixed-price contracts.

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

Approximately, given the amount of time you spent working on Government of Canada projects, what does that equal on a per-week equivalent?

[Robert Palter]

Again, we price on the basis of deliverables and every engagement is different.

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

All right. I think there are a lot of questions about what the deliverables are.

Do you have a fee schedule for your analysts?