Public Accounts Committee on June 6th, 2024

[Troy Crosby]

We don't go and pursue what other business they have. It's a large multinational. We ensure that they have the right terms for our contracts.

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

Okay, so I guess this is a policy question, and it comes back to you, Minister, since you are responsible for the direction here.

McKinsey has done particularly well from this government, but overwhelmingly from National Defence, with 13 non-competitive contracts. We've seen in the Auditor General's report that McKinsey has been favoured by this government significantly.

At the same time, we know—in a limited way, not fully—that McKinsey is engaged actively with our strategic adversaries around the world. That doesn't mean that it's sharing specific privileged information, but it's learning things from us that those same associates are applying in their interactions with foreign militaries. At a policy level, do you think that it is good policy to not make these inquiries?

[Bill Blair, Liberal, Scarborough Southwest, ON]

I think it's very good policy that anyone contracting with the Canadian government and the Department of National Defence, either in a competitive process or through standing offers, be subject to and meet the rigorous security standards that we put in place—

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

Should those include inquiries into who else they're working for at the same time?

[Bill Blair, Liberal, Scarborough Southwest, ON]

Well, frankly, if there is any indication in that security review and screening that is put in place that this is a concern, my expectation is that this would be brought to light.

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

I think that's a fundamental concern, but I'll move.... I think we've heard your position, and you've heard mine.

[Bill Blair, Liberal, Scarborough Southwest, ON]

Yes.

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

It's a policy disagreement, and Canadians can make their judgment about whether that's a problem.

This committee has heard from Mr. Yeo, an employee at National Defence at the same time as his company was getting contracts from the government.

Our view is that, aside from the particular problems of his case, we don't think it makes sense to have someone who is an employee of the government also be contracted out to for certain work. The purpose of contracting out is that the skills to do that activity don't exist within government, so why would you contract out to someone who's also a government employee?

That is why we put forward a motion to this committee—which was passed, although opposed by the Liberal members—calling on the government to end these double-dipping arrangements whereby a government employee is also a recipient of government contracts. Do you believe the Department of National Defence should end all instances of double dipping?

[Bill Blair, Liberal, Scarborough Southwest, ON]

Perhaps you're not aware that a significant number of members of the Canadian Armed Forces are reservists. By the very definition of their work, they are also employed in other occupations. Some of them are police officers or firemen. Some of them are electricians—

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

Let's set aside the reservist question, because I think there's a particular situation here.

[Bill Blair, Liberal, Scarborough Southwest, ON]

That's a situation where they are both employed by the Government of Canada and—

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

Yes. Let's set that aside. I have limited time. I understand there's a particular case for reservists.

People who are full-time employees of your department and also beneficiaries of contracts.... Do we think we should end all double-dipping in those cases?

[Bill Blair, Liberal, Scarborough Southwest, ON]

Well, what we should do is ensure that all of the rules with respect to the declaration of a conflict of interest are clearly articulated and that appropriate measures are put in place to eliminate those conflicts.

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

If you make a declaration and the conflict of interest persists.... Declaring something doesn't change that there's a conflict of interest, if a conflict of interest persists. Why don't we just end the conflict of interest by ending double-dipping?

[Bill Blair, Liberal, Scarborough Southwest, ON]

Respectfully, there's a spectrum of potential conflicts of interest. Some of those risks can be mitigated. Some of them require a full screen. Some of them would be an absolute prohibition from engaging regarding any contracts with the department. It's a range. It depends on the position the person holds and the services they may be providing. There is an appropriate response.

I am absolutely concerned that, in this case, the individual did not meet those screening requirements. We've put some very rigorous steps in place in direct response to the recommendations of the Auditor General, in order to make sure this does not happen again. When—

[The Chair, Conservative, John Williamson]

Thank you, Minister. I'm afraid that is the time. I allowed extra time for your answer.

[Bill Blair, Liberal, Scarborough Southwest, ON]

Thank you, Mr. Chair.

[The Chair, Conservative, John Williamson]

I'll turn now to Ms. Khalid.

You have the floor for six minutes.

[Iqra Khalid, Liberal, Mississauga—Erin Mills, ON]

Thank you, Chair.

Thank you to our witnesses today.

Just to clarify, Mr. Crosby, how many contracts do you have with McKinsey, currently?

[Troy Crosby]

We have no active contracts with McKinsey at this time.

[Iqra Khalid, Liberal, Mississauga—Erin Mills, ON]

Thank you. I appreciate that.

Minister Blair, thank you so much for taking the time to be here today.

I realize you were not the minister during the active dates we're discussing today.

Minister, during his testimony, card-carrying Conservative member Mr. Yeo had a lot of interesting stories about what he did, both as a member of the Canadian Armed Forces and when he was a contractor, while he was flashing his Conservative badge to all of us here.

To the best of your knowledge, can you please clarify exactly what he did during his time at National Defence?

[Bill Blair, Liberal, Scarborough Southwest, ON]

If I may clarify one point, I was, in fact, the Minister of Defence.

When the Auditor General report came to light, and through the work of parliamentary committees.... Within 24 hours of that information becoming known, Mr. Yeo was suspended and steps were taken to deal with his employment. He resigned before that could be completed. He was suspended and out of the building within 24 hours of that information coming to light. I was, in fact, the minister at that time.

[Iqra Khalid, Liberal, Mississauga—Erin Mills, ON]

To clarify, when you became aware of the accusations made against Mr. Yeo, you took steps right away.

[Bill Blair, Liberal, Scarborough Southwest, ON]

Well, in fairness, the deputy minister took the steps. Deputy Minister Matthews took those immediate steps at the time. He was the department head and was responsible for those actions. I was advised of the actions he took. I certainly supported them. They didn't require my authority.

The deputy minister acted very quickly and appropriately in this case.

[Iqra Khalid, Liberal, Mississauga—Erin Mills, ON]

Thank you for that.

I think we can all agree at this table that the specific case of Mr. Yeo should not have happened at all.

Since that incident happened, have there been any steps you or your deputy minister have taken to prevent these types of actions from happening in the future?