MPs launch study into federal McKinsey contracts, seeking documents and minister testimony

A House of Commons committee has agreed to study the federal government’s contracts with the consulting firm McKinsey and Company, and will be seeking considerable documentation from both the firm and federal officials.

The House of Commons Government Operations and Estimates Committee met Wednesday and agreed to dig into the matter, after a surge in McKinsey’s federal contract earnings under the Liberals came to light.

The federal government confirmed this week that since 2015, Public Services and Procurement Canada (PSPC) has awarded McKinsey 23 contracts for a total of $101.4 million, up from the $2.2 million spent under Stephen Harper’s Conservatives. 

• Capital Dispatch: Sign up for in-depth political coverage of Parliament Hill

Voicing concerns about the consulting company’s influence on government policies, scrutiny the firm has faced over its actions abroad, and criticisms the government was wasting federal funds by contracting out what could be accomplished by the public service, opposition MPs forced Wednesday's meeting.

Prime Minister Justin Trudeau has already asked Public Services and Procurement Minister Helena Jaczek and Treasury Board President Mona Fortier to “look into” the contracts issued since 2015 when the Liberals came to power to ensure the rules were followed.

However, the committee has elected to dig in much more extensively.

During the hearing it was agreed— after some back and forth— that the committee will look into consulting contracts awarded to McKinsey by the federal government or any Crown corporation dating back to January 2011, to examine their "effectiveness, management, and operation, including the value and service received by the government."

As part of this work, the committee will be looking to hear from seven cabinet ministers including the two ministers Trudeau has tapped to examine the contracts, as well as Deputy Prime Minister and Finance Minister Chrystia Freeland, Defence Minister Anita Anand, Immigration Minister Sean Fraser, Health Minister Jean-Yves Duclos, and Public Safety Minister Marco Mendicino. MPs also want to hear from current McKinsey executives, as well as former McKinsey global managing director Dominic Barton, who until the end of 2021 was Canada’s ambassador to China.

The committee is also seeking access to a series of documents including: any federal contracts entered into, all correspondence ranging from emails and texts to handwritten notes, records of all payments to McKinsey, the hourly and daily rates McKinsey charged, and the complete client list of all organizations the firm has worked with during the period in question.

Ahead of the meeting, Trudeau said he welcomed the work of the committee, “to make sure that, indeed, Canadians are getting proper value for money.”

“I think people can understand that a professional public service needs to make sure that it's doing the things the best way, to well serve Canadians, and regularly draws on outside expertise to do that,” the prime minister told reporters during a media availability in Shawinigan, Que. on Wednesday morning.

According to a statement from Jaczek’s office, three of the contracts granted by the Liberals, valued at $55.8 million, were “awarded through open, competitive solicitations;” 18 contracts, valued at $45.6 million, were “call-ups" against a national standing offer, and two were much lower value sole-source contracts.

In making their case during Wednesday's meeting for why this study was needed, opposition MPs raised concerns about wasteful government spending broadly, and spoke about their desire to ensure taxpayers' money is being used appropriately.

"This is not a single department issue. This is coming from the top with its tentacles permeating through out government," said Conservative MP and committee member Stephanie Kusie.

Liberal MP and committee member Anthony Housefather was the one to propose that the study stretch back into the previous Conservative government, given the comparisons being made, to get some context on what those contracts entailed.

"I don't think it would be much more work to be able to deliver this information then what's already requested, which is pretty voluminous," he said.

While not set in stone yet who will make the committee's final witness list, Bloc Quebecois and NDP MPs voiced interest in making sure the most senior McKinsey officials, past and present, are asked to appear.

MPs will have until next Tuesday to decide on their initial batch of witnesses, with meetings starting as part of this study during the week of Jan. 30, when the House of Commons begins its 2023 sitting.

McKinsey said in a statement last week the company follows procurement laws and its work with the Canadian government is “entirely non-partisan in nature and focuses on core management topics, such as digitization and operations improvement.”

The company's statement added that the firm “does not make policy recommendations” on any topic, and that it "welcomes" the opportunity to work with committee.

In a fundraising email sent Wednesday ahead of the hearing, the Conservative Party pitched supporters to "chip in" to help them "stop the flow of taxpayer dollars to Liberal insiders."

"When you have qualified public servants, you should not be contracting out their work to high-priced consultants, costing taxpayers millions more. But the Liberal government has made a habit of it… We must get to the bottom of this. All information and communication the Liberals have had with McKinsey since taking office must be provided to Canadians," reads the email.

In also voicing his support for the study—including looking back to Harper-era contracts— NDP Leader Jagmeet Singh suggested on Wednesday that the more than $100 million spent by the Liberals could have instead been used to hire an additional 1,000 nurses to work on the front-lines of the health care crisis in the last year.

“We all know that government after government has pulled the same nonsense. When Conservatives are in power, they give their insiders contracts. When the Liberals are in power, their friends get contracts,” Singh said, speaking to his caucus on Wednesday morning in Ottawa.

The work MPs will be embarking on as part of this study will also be incorporated into a broader review the committee has underway scrutinizing the federal government's overall outsourcing of contracts.

With files from CTV News' Spencer Van Dyk