Government Operations Committee on March 29th, 2023

[Robert Palter]

Yes.

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

Very well.

So it’s data collected worldwide, which is used to perform a thorough analysis of a local situation, such as Canada, as well as to follow a process that belongs to you and has been proven by your global experience.

[Robert Palter]

Yes. I'd like to offer an example to explore this. This is a great question.

For example, McKinsey has a tool called Digital Quotient. It's part of the national master standing offer. Digital Quotient is a dataset in which McKinsey has collected benchmarks on best practices, processes and structures in digital organizations. We have brought those to bear, and the federal government can get best practices benchmarking on that sort of topic.

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

Thank you.

So this is a process you could apply not just in Canada, but just about anywhere in the world.

Then how can we be sure you’re using a process that’s not identical to one that’s being used in another country?

[Robert Palter]

I think we should separate the ideas of benchmarks and a process. A benchmark is a benchmark. Data has to be anonymized and it has to be secure. We respect that significantly and we have dedicated resources to ensuring that benchmarks that use proprietary data respect the proprietary nature of the data.

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

To create the process, you used milestones, which are generalized data.

How do you ensure that the processes created from this data are not the same throughout the world?

Please provide me with a written response since my time is up.

[Robert Palter]

Sure.

A benchmarking tool is a diagnostic tool. It helps identify where processes need to be changed. Then it's our job, in consultation with our client—in this case, the civil service—to take the diagnostic delivered by the benchmark and to work to customize the process around those elements for the environment in which we're working, for the people or for whatever the situation may be.

I'll give you an example. With agile execution, there is a certain way in which a core agile execution happens, but it has to be customized for the department you're working in and the country you're working in. However, agile at its core is a particular model.

[The Chair, Conservative, Kelly McCauley]

Colleagues, we're going to skip the last round, but I'm going to let everyone on this round go a bit longer.

Mrs. Vignola, you have about 30 seconds.

Mr. Johns, you'll have about three and a half minutes.

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

Thank you very much.

Earlier, we talked about your clients. Would it be possible to provide the Committee with a list of those clients?

Naturally, we could agree not to disclose it, so as to meet your confidentiality requirements.

[Robert Palter]

Mr. Chair, we take client confidences very seriously and are bound, in many cases—or in all cases—by legal obligations.

I'm here to comply and work with the committee. I'm happy to take that away and figure out how to think about that question.

[The Chair, Conservative, Kelly McCauley]

Thank you.

Mr. Johns, go ahead.

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

I really appreciate, Mr. Palter, your sharing with us that you're less than 1% of the overall outsourcing that's taking place in Canada. I'll just say, for everyday Canadians, that your company had $642,000 in consulting contracts with Canada in 2011 and now you're at $32 million. When we look at it overall, the big six outsourcing companies have gone from $54 million to over half a billion dollars in a decade. That's unbelievable growth.

You run a really sophisticated consulting company. You're a highly paid consultant. What advice would you give to Canada to curb this, because this is clearly growing at an extraordinary rate?

[Robert Palter]

I think this is great question. It's an important question. This is kind of the guts of what we're getting at.

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

It's why we're here as New Democrats. We're not on a “gotcha” or witch hunt. We actually want to solve this.

[Robert Palter]

Look, consultants can add a ton of value when used appropriately: when the scope is clear, the distinctive capabilities are complementary to what the federal government needs or what any client needs, there's a clear work plan, and there are clear deliverables.

I would say that the government should ask where those situations are where they really need that expertise that we can bring to complement and stand up the civil service.

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

I guess my concern is that you have a thousand employees doing a lot of work outside of the public service, so for good reason people are saying there's a shadow public service in operation right now. How do we get those jobs and that expertise back in the public service? That's where we want to go.

Mr. Bains asked a good question around accountability and transparency. Where can you improve on that, in that area? Where do you believe that McKinsey, in your relationship with Canada and the Canadian taxpayers, can improve for better transparency and accountability?

[Robert Palter]

I believe the procurement process that is run by the government—at least in McKinsey's case—puts an awful lot of requirements on us to ensure value for money, to ensure performance, to ensure skill improvement and to ensure all the deliverables that we commit to.

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

I appreciate that, but I'm not really getting an answer to the question.

I have just one last question. Have you given any advice on real estate and the government's ownership of buildings and lands to potentially sell them or use them differently?

[Robert Palter]

No.

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

Okay, thank you.

[The Chair, Conservative, Kelly McCauley]

Are you fine, Mr. Johns?

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

Oh, I can go on for quite a while.

[Voices]

Oh, oh!

[The Chair, Conservative, Kelly McCauley]

We'll give you another minute.

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

Okay.

Concerns have been shared, obviously, about McKinsey's role in the toxic drug crisis, in the marketing. I know you weren't there, but this is a huge issue for us in our country, as you know. We have people dying every day. McKinsey played a role in that in terms of the promotion of toxic opioids.

How do you decide when you're going to decline to do business for a potential client? I mean, this is when it comes down to the ethics of it. Your company promoted a product that went against government policy. Clearly, there was a breach in ethics and values.