Evidence of meeting #70 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 mckinsey.
A recording is available from Parliament.
Former Global Managing Director of McKinsey & Co, As an Individual
This is June 23.
Conservative
Garnett Genuis Conservative Sherwood Park—Fort Saskatchewan, AB
Okay.
In particular, we have an email from Zak Cutler, who is a partner at McKinsey. In reference to the meeting, he noted that you were going to be there. He said, “Dom's calendar has been pretty tight, so looks like this is the only time we could get him.”
If Zak Cutler, who is a partner at McKinsey, has intimate awareness of your schedule.... If he's not talking to you directly, then presumably someone at McKinsey is talking to your executive assistant or the person responsible for your schedule. Is that a reasonable conclusion to draw?
Former Global Managing Director of McKinsey & Co, As an Individual
No, it's not a reasonable conclusion to draw, because I had a request from Michael Sabia, and maybe they talked to Michael Sabia, or his assistant had called. I have no idea what the background—
Conservative
Garnett Genuis Conservative Sherwood Park—Fort Saskatchewan, AB
Okay, so the way this could have happened, by your account, is Michael Sabia is talking to you about your schedule, relaying the information back to McKinsey and then inviting McKinsey to join a call with you. Throughout this whole time, you have no idea that McKinsey is present in the meeting, while Michael Sabia is relaying information between you and McKinsey about specific details of your availability and schedule.
You want us to believe that at no point was someone from McKinsey talking directly to you or your executive assistant. It was just a complete surprise to you that McKinsey was on the call.
Former Global Managing Director of McKinsey & Co, As an Individual
I wasn't aware of that.
Again, what I would say, differently, is that maybe it was Michael Sabia's secretary who was trying to set up the call and told the McKinsey people. I don't know. That's a very valid outcome. The point is—
Conservative
Garnett Genuis Conservative Sherwood Park—Fort Saskatchewan, AB
That's just not plausible, sir, because Annie Ropar from the Infrastructure Bank is communicating with Zak Cutler and Antonino Piazza at McKinsey, and they're discussing your schedule and events they're going to put together, at which you're going to participate, along with McKinsey and various others. Either you're not telling the committee the truth, or you routinely take meetings where you have no idea who's going to be there, either before or after.
Even if we believe your account that you were totally ignorant to these things, that doesn't sound like a very effective ethical screen. If you say there's an ethical screen that's supposed to keep you from interacting with McKinsey, but McKinsey can show up at meetings and you're not aware they're there, and you're fine to share your advice not knowing who's on the call—
Conservative
Garnett Genuis Conservative Sherwood Park—Fort Saskatchewan, AB
—at best, isn't that highly negligent?
Former Global Managing Director of McKinsey & Co, As an Individual
Neither of those things are correct.
Conservative
Liberal
The Chair Liberal Peter Schiefke
Thank you, Mr. Barton, and thank you, Mr. Genuis.
Next we have Mr. Rogers.
Mr. Rogers, the floor is yours. You have five minutes, sir.
Liberal
Churence Rogers Liberal Bonavista—Burin—Trinity, NL
Thank you, Chair.
Welcome to our witnesses today.
It's unfortunate we lost Mr. Morneau because of technology problems. I'll skip the questions for him and go directly to Mr. Barton.
Mr. Barton, as you've alluded to today, the $27 billon available for investment through CIB is, of course, great for infrastructure programs across this country. A lot of work is being done in many areas that desperately need that funding, like the broadband programs, for instance, that are being developed in rural Canada. This work wouldn't happen without the support of the bank.
I want to ask you, for the benefit of the committee, if you can please tell us about your role on the advisory committee of the council on growth. What were your contributions to the conversations surrounding the creation of the Canada Infrastructure Bank?
Former Global Managing Director of McKinsey & Co, As an Individual
As I mentioned in the opening statement, there was a range of different areas that we were looking at to try to get more growth in the Canadian economy and to improve median incomes. That was the target we were aiming towards for 2030, and infrastructure was a core element of it. We found, from other countries' work, that this can be a multiplier in productivity improvement and growth, so we knew that would be a core piece. As I mentioned, there was re-skilling and there was unleashing some sectors we thought were important, like agriculture, health care and so forth. There were 13 recommendations in total.
On the infrastructure side, the way I tried to do it on the growth council—because we had 14 people with these different initiatives, if you will—was by dividing the group up to look in more detail, and then there was the discussion with the broader group. On the infrastructure piece, the key drivers were Mark Wiseman and Michael Sabia. Ken Courtis also played an important role in that. They were the ones who were driving the thinking and looking at what was happening in other countries to come up with recommendations that we would then debate.
What I was trying to do—because there were pretty strong-minded individuals in the group—was ensure that we could get to a conclusion. There were very robust views in that group; there were no wilting lilies in there. My job was to make sure we were covering the right areas and that we were able to get specific and actionable programs the government could review and, as I said, decide to take or reject. They didn't accept everything we'd recommended because it was up to them to decide what they wanted to do.
That, really, was the approach. I don't know if there's any more information I can provide.
Liberal
Churence Rogers Liberal Bonavista—Burin—Trinity, NL
Given that you have a history of involvement with the former Conservative government, of course, and with the current Liberal government, can you please tell the committee why you feel it's important for all political parties at all levels of government to support getting infrastructure projects built for Canadians?
Former Global Managing Director of McKinsey & Co, As an Individual
Whether it relates to commuter transportation between key cities and within cities; being able to get our products to market, as I mentioned, on the agricultural side; or the entire renewable energy side, which is going to be one of the largest capital reallocations in human history—we have a ton of opportunity in Canada to do that—I believe that having infrastructure will have long-term benefits for Canadians. While Canadians are benefiting through all the benefits that infrastructure provides, projects themselves also contribute a lot, so it's a very important part, I think, of Canada's achieving prosperity.
Liberal
Churence Rogers Liberal Bonavista—Burin—Trinity, NL
Thank you very much.
Ms. Fukakusa, can you please tell us about your career in finance and how that helped prepare you for your role of inaugural chairperson of the CIB board of directors?
Liberal
Inaugural Board Chair of the Canadian Infrastructure Bank, As an Individual
My career in finance was extensive. I worked for RBC for 31 years in various divisions, including financing of infrastructure. It was everything from that to setting up governance to risk management to work around investment approvals, those sorts of thing. I think given where I sat and given my familiarity with financial institutions, I had a good background to take on the role of chair.
Liberal
The Chair Liberal Peter Schiefke
Thank you very much, Ms. Fukakusa, and thank you, Mr. Rogers.
Mr. Barsalou-Duval, you have two and a half minutes.
Bloc
Xavier Barsalou-Duval Bloc Pierre-Boucher—Les Patriotes—Verchères, QC
Thank you, Mr. Chair.
Mr. Barton, I will begin by reminding you that the title of our committee's study today is the role of McKinsey & Company in the creation and the beginnings of the Canada Infrastructure Bank.
Since your opening statement, you have seemed to claim that McKinsey had nothing to do with this and exerted no clout whatsoever. Who recommended that the Canada Infrastructure Bank be created? It was the Advisory Council on Economic Growth, which was chaired by you—McKinsey's global managing director. The secretariat of the same council that recommended the infrastructure bank be created was made up of McKinsey employees.
When the infrastructure bank was subsequently set up, to whom did the bank give consulting contracts to help it get started? McKinsey. In fact, a bunch of the Canada Infrastructure Bank's board members and senior management came from McKinsey. What's more, McKinsey clients have won millions of dollars in contracts from the Canada Infrastructure Bank. This bank has become such a creature of McKinsey that a former McKinsey partner is now its CEO.
Mr. Barton, did all of that happen by chance? Is it really a coincidence?
Former Global Managing Director of McKinsey & Co, As an Individual
You made a number of points on this.
Number one, the Infrastructure Bank was part of Liberal Party policy in 2015. To suggest that McKinsey has come up with that is false.
Number two, it was the growth council that was actually coming up with recommendations, not McKinsey. I mention again that the lead people on that were Michael Sabia and Mark Wiseman.
Bloc
Xavier Barsalou-Duval Bloc Pierre-Boucher—Les Patriotes—Verchères, QC
Mr. Barton, I understand what you're telling me: the idea of an infrastructure bank didn't come from McKinsey—
Former Global Managing Director of McKinsey & Co, As an Individual
Can I answer your question?
