The consensus decision was made without a recorded vote after the opposition agreed to three minor amendments from the Liberals.Sean Kilpatrick/The Canadian Press
A House of Commons committee will launch an in-depth investigation of the more than $100-million in federal contracts with global consulting firm McKinsey & Company after Liberal MPs supported an opposition motion to hold hearings and demand documents.
The consensus decision was made without a recorded vote after the opposition agreed to three minor amendments from the Liberals, including giving departments up to five weeks instead of three weeks to hand over the requested documents.
The parties also agreed to a Liberal request to have the document search date back to 2011 instead of 2015 in order to include the last term of Stephen Harper’s Conservative government.
Conservative MP Stephanie Kusie, who spent nearly 14 years as a foreign service officer, said the increasing use of McKinsey and other consulting firms has created a wasteful “shadow government” inside the public service.
“Coming from a public-service background at Global Affairs, I just recognize how completely unacceptable that is,” she said.
Ms. Kusie also said the review should look at why contracts with McKinsey are on the rise at a time when the company is facing numerous international controversies.
The company agreed to a settlement in 2021 for nearly US$600-million over its role in promoting opioid sales, and France’s financial prosecutor has announced it is investing allegations the company engaged in tax fraud.
The lengthy motion of the government operations committee called for at least seven ministers to appear and for each department that has hired the New York-based consulting firm to provide an extensive list of documents related to the contract work, including hourly and daily rates as well as all e-mails, text messages and handwritten notes related to the contracts and invoices provided by McKinsey.
The committee also agreed to an amendment by the Bloc Québécois that adds a specific request for senior McKinsey officials to appear as witnesses, as well as Dominic Barton, who was the head of McKinsey until 2018.
In the early years of Justin Trudeau’s first term in power, Mr. Barton, while still leading the consulting firm, was the volunteer chair of then-finance minister Bill Morneau’s advisory council on economic growth. The council made numerous major policy recommendations that the government later implemented, such as launching a Canada Infrastructure Bank and significantly increasing Canada’s annual immigration targets.
The Globe and Mail first reported in January, 2022, that the value of outsourcing to McKinsey has climbed steadily under the Liberals. The Globe has also reported that federal outsourcing overall has climbed by 74 per cent, to $14.6-billion, since the Liberals formed government in 2015 on a campaign platform that promised to cut back on the use of external consultants.
Following those reports, the government operations committee launched a study of federal outsourcing. MPs said the new McKinsey study is related to that work, which is continuing.
Federal officials recently provided an update saying Ottawa has awarded 23 contracts to McKinsey since 2015 with a total value of $101.4-million.
Liberal MP Anthony Housefather, who is also the parliamentary secretary to Public Services and Procurement Minister Helena Jaczek, told the committee during its debate that he would support the motion.
“I think that the study on McKinsey is an important part of our oversight role in the context of our study on outsourcing, which is a much broader question of what should be done by the public service – and where is it reasonable, and in some contexts, it is reasonable – to give contracts outside,” he said.
Mr. Housefather said the committee’s work should ultimately lead to guidance for the current and future governments on when outsourcing is appropriate.
At a news conference in Shawinigan, Que., Mr. Trudeau was asked about the McKinsey contracts and his relationship with its former global managing partner, Mr. Barton.
Mr. Trudeau did not respond about his ties to Mr. Barton, who he named as Canadian ambassador to China in 2019, but said the contracts were awarded by non-partisan public servants.
He said the government is reviewing the contracts to “make sure all the rules were followed.” (Mr. Barton’s term as ambassador to China ended in December, 2021.)
McKinsey said that it welcomed the committee’s review of its services to the federal government.
“We are proud of the contributions our firm has had across the public sector and are focused on working with the committee to discuss our impact in detail,” Alley Adams, head of external relations, Canada, said on Wednesday.
NDP MP Matthew Green, who attended Wednesday’s committee meeting, said the “massive” outsourcing contracts with McKinsey and other consulting firms need to be reviewed.
“We as New Democrats believe that there are public-sector workers, professionals, who are currently in this government, who have the ability to provide expert advice to the government, rather than have this outsourcing of leadership, which is essentially what this is. It is an abdication of leadership by the Trudeau government in favour of these well-connected insiders.”
The government operations committee is also in the midst of a study of federal spending on the ArriveCan app, after The Globe first reported that its cost is on pace to exceed $54-million this fiscal year.
With a report from Robert Fife