Public Accounts Committee on June 4th, 2024

[Karen Hogan]

That's the percentage of the dollar value.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Oh, I see.

[Karen Hogan]

Yes, if you look, there are two exhibits in our report. There's about $5 billion spent on professional services contracts over the 12-year period, and McKinsey is 0.27% of that.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

That's 0.27% of all dollars awarded to professional services—private, for-profit entities. Is that correct?

[Nicholas Swales]

[Inaudible—Editor]

[Karen Hogan]

He's provided clarification for me.

The Public Accounts of Canada lists many different types of professional services contracts. McKinsey is only in certain buckets. If there have been eight buckets, McKinsey's in six of them, so there is 0.27% of all funds spent in those six buckets out of eight, for professional services. Those are arbitrary numbers.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

However, it paints a picture of the fact that this issue is immense, and I think that's why you pointed this figure out. It's not an issue of McKinsey & Company—which it is in some parts, I believe—but 0.27% of all those funds demonstrate how 99% of professional services dollars is awarded.

The issue you're describing here is that the government failed to guarantee that these certain companies were worthy of receiving contracts, and that Canadians were getting value for their money, which are the overarching or larger concerns here. Is that correct?

[Karen Hogan]

That's why I said that I don't believe that our findings are unique to McKinsey. I believe that we'll likely see that rules weren't paid attention to with other professional services contracts, but even more generally around procurement. We often see that the justification for non-competitive contracts is incredibly weak, and there are a lot of rules to follow in procurement. The frequency of disregard here was in many different aspects, whether it be—

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Why doesn't the government just follow the rules? Why?

[Karen Hogan]

That is exactly why I don't believe this is about more rules but about following existing rules. I think that the government needs to ask itself that. Is it because the rules are so complex that folks try to go around them in order to get contracts out quickly, or is it that rules are so complex and that there are so many of them that you don't know them all and can't apply them?

I really think it's something the public service needs to figure out because they're meant to promote fairness, transparency and good value for Canadians. They really only work if they're used.

[The Chair, Conservative, John Williamson]

Thank you. I'm going to try to give you one last spot, Mr. Desjarlais, so we'll come back to you.

Ms. Kusie, I understand you're splitting the next five minutes with Mr. Caputo.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

That's correct.

[The Chair, Conservative, John Williamson]

Will you hand it off to him or do you want me...?

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

I will hand it off to him.

[The Chair, Conservative, John Williamson]

Very good. You have the floor for five minutes.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you, Chair.

Thank you, Madam Auditor General, again.

I go back to an individual who has been intrinsic to this study, and that is Mr. Dominic Barton. I'm sure you're aware that Mr. Dominic Barton is the former global international leader of McKinsey. Mr. Barton is also the Prime Minister's hand-picked, appointed ambassador to China. Mr. Barton was also chair of his economic advisory committee, so the infiltration of McKinsey in the Liberal government runs deep—and it doesn't stop there.

To go on, Dominic Barton attested himself, in the government operations committee, that he had dinner with the Deputy Prime Minister. We saw the Prime Minister warmly introduce Dominic Barton at an international event. Mr. Barton has also met with Katie Telford as well as Gerald Butts.

As I said, Mr. Dominic Barton, the former international head of McKinsey, is no stranger to the Liberal government. However, on February 1, 2023, Dominic Barton testified, not at this committee but at the government operations committee, and he lied. He lied about attending a strategic meeting with the Canada Infrastructure Bank on June 23, 2020, when he was Canadian ambassador to China. Today it is confirmed in your report that the Canada Infrastructure Bank received not one, not two, but three contracts with McKinsey.

Madam Auditor General, my question to you is this. On what dates were each of these three contracts awarded to McKinsey?

[Karen Hogan]

I have to get back to you on the specifics of the dates. I don't have that level of information on all 97 contracts at my fingertips today.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Please ensure that you do that because determining those dates will be very interesting to corroborate the previous testimony that we have from Mr. Barton. We have seen that he has lied before to a parliamentary committee, and I would not put it past him if we find that these dates corroborate his implication with both McKinsey as well as the Liberal government.

I also think it's important to point out that you mentioned in your report the ESDC and defence wait times of one year. I can't help but wonder if Mr. Barton's implication has something to do with that, as well as the contracting chains.

With that, I'll pass my time over to Mr. Caputo.

[Frank Caputo, Conservative, Kamloops—Thompson—Cariboo, BC]

Thank you, Mrs. Kusie. Thank you for being here.

Madam Auditor General, I want to direct your attention to paragraphs 7.46 and 7.47 of your report speaking about cybercrime.

Specifically, I want to ask you about the fact that it appears that the CRTC had seized devices in relation to an anti-spam investigation, and on those devices was evidence of another offence unrelated to the anti-spam investigation. Am I correct so far?

[Karen Hogan]

Yes, you're correct in that the CRTC seized devices as they were investigating an allegation against the anti-spam legislation. During that investigation, they uncovered that a law enforcement agency had a criminal investigation ongoing. I do not know the nature of that criminal investigation.

[Frank Caputo, Conservative, Kamloops—Thompson—Cariboo, BC]

It was a separate criminal investigation, and the CRTC provided digital evidence to the law enforcement organization. The CRTC was then made aware that the police were going to be applying, or had applied, for a search warrant and that a search warrant would be coming. In the meantime, they stated that the data had been deleted from the devices.

In other words, the CRTC went to the owner of those devices, knowing that a warrant was coming, asked for permission, received permission and then deleted evidence from devices, which the RCMP were going to seize pursuant to a warrant, before the police obtained the warrant. Is that accurate?

[Karen Hogan]

Yes, the CRTC was informed of the possibility of being served with a warrant after they had provided the electronic information to law enforcement.

In an expedited fashion, they did accelerate cleaning the devices or deleting the contents of the devices and returning them. The incorrect information they provided to law enforcement was around the timing. When they told them that the devices had been wiped, that had not yet occurred.

[Frank Caputo, Conservative, Kamloops—Thompson—Cariboo, BC]

Not only were they incorrect or lying; they actually deleted evidence that would be seized.

Can your office please provide this committee with all communications from the CRTC in relation to that, including all individuals and the titles of those who were involved?

[Karen Hogan]

Mr. Chair, we can provide that information.

I believe that Mr. Hayes would like to add.

[The Chair, Conservative, John Williamson]

Yes, go ahead if you want to say a few words.