‘Is There Bureaucratic Oversight?’: Federal Contracts Under Scrutiny

The Confederation Building reflects off the windows of a building in downtown Ottawa on April 7, 2020. The Canadian Press/Sean Kilpatrick

The federal government is spending too much on contracts with too little accountability, say critics, who are calling for changes and reforms.

Contracts to consulting firm McKinsey & Company have drawn special attention from the parliamentary standing committee on government operations in recent weeks. The firm has received $104.6 million from 24 contracts since the Liberals took power in 2015, compared to $2.2 million in contracts under almost 10 years of the Conservative government under Stephen Harper.

However, a Carleton University School of Public Policy and Administration (SPPA) research project found that the $17.1 million given to McKinsey in fiscal 2021–22 placed the company 191st among around 1,848 recipients listed. Brookfield Global Integrated Solutions, which received over $1.14 billion, placed first, as the largest beneficiary of the estimated $22.2 billion in contracts that year.

Ken Coates, a professor at University of Saskatchewan’s Johnson Shoyama Graduate School of Public Policy, said that contracts have their place but that the expenditures deserve attention.

“These are extraordinary times. So a fair amount of consulting work has been done because of COVID, a bunch of crises related to airline travel, and all these other kinds of things. You can’t mobilize the bureaucracy to take on something that is immediate and needs attention in the next three weeks,” Coates said in an interview.

“When you’re dealing with some short-term problem solving, policy development, [contracting out is] very helpful. But I think people are upset by the scale, and by the fact that it’s happening alongside the expansion in the civil service. You have one or the other, you don’t get both.”

The Liberal government has increased the number of civil servants by more than 30 percent since taking power, including 8,570 new federal employees in 2021–22.

“I don’t get a sense we’re on a war footing in Canada, but the government is behaving as though we are. They’re spending lots and lots of money, they’re hiring lots and lots of people, but they’re also doing this contracting stuff,” Coates said.

“The problem with the contracting is that it’s not subject to the same kind of government oversight. You’re asking for advice from people outside the bureaucracy, who are not tied into the long-term vitality of the civil service in the same sort of way. There’s reason to be worried because it just is so much so fast, and subject to so little scrutiny.”

‘Inevitable Dynamic’

Amanda Clarke, an associate professor at Carleton’s SPPA, told the government operations committee on Jan. 30 that high expenditures on management consultants is “not an accident” but rather an “inevitable dynamic” in a public service that fails to invest in talent and recruitment and is bound by “unhelpful oversight and reporting burdens.”

“The demands for error-free government make it very difficult to be creative and innovative in the public service,” she said.

The Epoch Times reached out to a public policy expert with decades of experience to evaluate Clarke’s assessment. He said her comments had “a great deal of truth and value” but requested anonymity to speak in-depth because being named could have repercussions on his parliamentary work involvement.

“The current federal government has increased the dimensions through which it intervenes in the management of lower-level decisions. There are always a myriad of minor contracts to lesser consulting firms,” the expert said.

“Some of this is done because central officials and their advisers don’t have complete confidence in the civil service. While this lack of confidence is sometimes justified and sometimes not, it does tend to create an environment where the regular civil service is not relied on or developed to be better relied on in the future.”

Governments, sometimes under the influences of the vendors themselves, have layered many “slogans and movements” upon bureaucrats, the expert said. The requirement to fulfill these competing but unclear objectives paralyzes action.

“Endless meetings must be held just to develop some idea of how to respond. Here is an area where better development of staff and expertise could be useful. Of course, the problem would be less severe if the accumulation of slogans and directives were not such a problem,” he said.

“There are solutions, but they would have to be undertaken in a coordinated way on a number of fronts simultaneously. It is hard to achieve that in Ottawa, or in most governments for that matter.”

The Epoch Times reached out to the Treasury Board Secretariat and the minister for Public Services and Procurement Canada but did not hear back before publication.

Scrutiny

The House of Commons on Feb. 7 passed a motion sponsored by Conservative MP Garnett Genuis that calls for the auditor general to examine the money given to McKinsey.

Coates believes that assessing value for money is vital for all major government contracts and that parliamentary committees should receive the reports required to assess their merits.

“We’ve been picking on McKinsey now, but Ernst & Young and these other big accounting firms, Deloitte, they have incredible international connections and they bring phenomenal, phenomenal opportunities for Canadians to benefit from that global expertise,” he said.

“But the question is, to whom are they reporting? Does Parliament get to see the work, do they get to see the reports? Is there bureaucratic oversight? Is there a follow-up to see if the money was well-spent and well-used?”