Evidence of meeting #68 for Transport, Infrastructure and Communities in the 44th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was cib.
A recording is available from Parliament.
Liberal
The Chair Liberal Peter Schiefke
We'll go one more round with one question per party. We'll begin that line of questioning with Dr. Lewis, followed by Ms. O'Connell, followed by Mr. Barsalou-Duval and Mr. Bachrach.
Dr. Lewis, the floor is yours for one question.
Conservative
Leslyn Lewis Conservative Haldimand—Norfolk, ON
The bank's creation is recommended by Dominic Barton while he is CEO of McKinsey. McKinsey strikes an advisory council and works for free to help the CIB set up. The CIB is stacked with McKinsey executives. In fact, McKinsey recommends which consultants CIB should hire. McKinsey receives what looks like five contracts—they say it's three, and there's a dispute about that—totalling $1.6 million. McKinsey informs the CIB about the $10-billion growth fund. Then McKinsey brags about the special knowledge it has of the CIB.
Why should Canadians believe that McKinsey is independent of the CIB?
Senior Partner, McKinsey & Company
I'll start.
McKinsey did not create the Canada Infrastructure Bank nor the concept. That was an act of government and a part of the Liberal Party's election promise in 2015. Our work formally started after we followed procurement rules and were asked for expertise on specialized topics with respect to infrastructure, which ran through a procurement process that, as we heard the other day from Mr. Cory, was competitive.
We've done no work since 2020, and the fact that we have some former colleagues who used to work at McKinsey more than 10 years ago has no real relevance to us. Our work is focused on three engagements in 2018 and 2020, work we're proud of and work that we believe was procured properly.
That's our role at the Canada Infrastructure Bank.
Liberal
The Chair Liberal Peter Schiefke
Thank you very much, Dr. Lewis.
Thank you, Mr. Pickersgill.
Next we have Ms. O'Connell.
Ms. O'Connell, the floor is yours.
Liberal
Jennifer O'Connell Liberal Pickering—Uxbridge, ON
Thank you, Mr. Chair.
Just following up on that summary, it's the Canada Infrastructure Bank and not the Government of Canada that engaged with McKinsey. Is that correct?
Senior Partner, Office Managing Partner for Canada, McKinsey & Company
That's correct.
Liberal
Jennifer O'Connell Liberal Pickering—Uxbridge, ON
Did you have any involvement with the Government of Canada in your role and work on those three contracts with the Infrastructure Bank?
Liberal
Jennifer O'Connell Liberal Pickering—Uxbridge, ON
To summarize, you were asked to provide names of potential employees for the Infrastructure Bank. You provided those, but they were not hired. You had three contracts with the Infrastructure Bank that were engaged by the bank through their own procurement processes with the board.
Current CIB employees who had previous employment with McKinsey have never engaged with McKinsey while working at the Infrastructure Bank. Is that correct?
Senior Partner, Office Managing Partner for Canada, McKinsey & Company
That's correct.
Liberal
Jennifer O'Connell Liberal Pickering—Uxbridge, ON
We've heard this testimony over and over, but as you can see from the opposition, there seems to be an attempt to discredit your organization, and I don't understand the reason. We even heard testimony that, to my understanding, McKinsey did work with the Canadian government under previous governments as well. Is that correct?
Senior Partner, Office Managing Partner for Canada, McKinsey & Company
That's correct.
Liberal
Senior Partner, Office Managing Partner for Canada, McKinsey & Company
Yes.
Liberal
The Chair Liberal Peter Schiefke
We'll end it there. Thank you, Ms. O'Connell.
Monsieur Barsalou-Duval, go ahead.
Bloc
Xavier Barsalou-Duval Bloc Pierre-Boucher—Les Patriotes—Verchères, QC
Thank you, Mr. Chair.
When we look at the use of consulting firms by the Canadian government, we see that it is exploding, especially since the Liberals came to power. In the case of McKinsey alone, contracts went from zero dollars in 2015 to over $32 million in contracts in 2021.
How do you explain the fact that, all of a sudden, your services have become essential for the federal government when it did without them for so long?
Senior Partner, Office Managing Partner for Canada, McKinsey & Company
In response to the question, I'll refer to a number of the points I made in my OGGO testimony at the end of March.
McKinsey's work with the federal government came about as a response to RFPs the federal government asked us to respond to. Those were competitively offered, procured and evaluated independently by the government.
As I said at OGGO, the complexity of the challenges facing the government grows every single year, and the government is looking for global expertise on how others have dealt with those challenges. We are able to bring that expertise to support the government in fulfilling its agenda.
Liberal
The Chair Liberal Peter Schiefke
Thank you very much, Mr. Palter.
Thank you, Mr. Barsalou‑Duval.
Finally, we have Mr. Bachrach.
Mr. Bachrach, the floor is yours for one question.
NDP
Taylor Bachrach NDP Skeena—Bulkley Valley, BC
Thank you, Mr. Chair.
Mr. Cartwright, we've heard several times this assertion that there simply isn't enough public money to invest in all the infrastructure that we need. That is never really contested, and I'm interested in your thoughts on that. Obviously there are limits, but we don't talk about what those limits are. We know that the federal government can provide financing at much more affordable rates than private capital has access to.
My question is around the fact that not only are we talking about privatizing types of infrastructure that have traditionally been public but also how there are cases in which the federal government is investing vast sums of money in infrastructure that has traditionally been private. I'm thinking specifically of $30 billion being invested in an oil pipeline that the Auditor General has said isn't going to make us any money. In fact, it's going to result in the government leaving a lot of money on the table and losing money on that investment.
Is there an opportunity cost involved there? Could that $30 billion be better spent on resolving the infrastructure deficit that so many communities across the country face?
Chairperson, Council of Canadians
Absolutely. That purchase of a pipeline was such a grossly wrong decision.
Listen, it's been repeated here time and time again that somehow this is going to ease the burden on the taxpayer, this P3 model. This is complete nonsense. If there's a billion-dollar project and you have a P3 model where the private guy is expecting 10% to 15%, the taxpayer has to find another $100 million to $150 million to pay those people for their role. That is a talking point that has been developed as part of this corporate capture of public policy-making.
We need to assert that the public good is only served when public assets are kept in our hands and are publicly accountable. Where the Infrastructure Bank can invest directly in those things in municipalities and with indigenous people, that's great. Giving money to companies that are making billions across the world is a terrible waste.
If we simply reverse some of the corporate tax cuts that have been brought in by this government, and previous governments in the last 20 years, we'd have over $80 billion extra a year to invest in public infrastructure. Those are the solutions.
Liberal
The Chair Liberal Peter Schiefke
Thank you very much, Mr. Cartwright and Mr. Bachrach.
That will conclude our line of questioning for today.
On behalf of all members, I want to thank our witnesses who joined us in person or virtually.
With that, this meeting is adjourned.