The House of Commons government operations committee continued its study of contracts awarded to multinational consulting firm McKinsey on Feb. 6, with testimony from the head of a crown corporation inspired in part by the former head of McKinsey and who is also himself a former McKinsey partner.
Ehren Cory, CEO of the Canadian Infrastructure Bank (CIB), took questions from MPs about the links between his outfit and McKinsey.
The CIB was the brainchild of the Advisory Council on Economic Growth, a body created by the Trudeau government in 2016 which was chaired by Dominic Barton, who was at the helm of McKinsey at the time.
Cory worked as a partner for McKinsey from 2001 to 2012, before becoming CEO of Infrastructure Ontario, a provincial crown corporation.
He said he had been hired through a headhunter and primarily because of his work at Infrastructure Ontario.
While at McKinsey, Cory worked in the public sector and capital projects practices.
The CIB had awarded McKinsey three contracts before Cory’s time at the helm, for a total value of $1.43 million.
Cory sought to put this figure in context, telling the committee it represents under 5 percent of the CIB’s total expenditures for professional services.
Other former McKinsey personnel include Cory’s executive assistant and a director working on portfolio strategy who Cory says was hired through a competitive process.
Conservative MP Leslyn Lewis asked Cory whether the contracts given to McKinsey followed a fair process given the firm was “stacking their loyalists on the infrastructure bank.”
“The fact of the matter is, since the time that any former McKinsey employees have worked at the CIB, McKinsey hasn’t been hired to do $1 of work,” Cory answered.
Cory said he was aware, but he noted the testimony leading to the report had occurred a year earlier and that since then progress had been made on several projects.
The CEO said 27 projects have reached financial close and 19 of those are currently under construction.
The CIB has been criticized for not attracting significant private sector investment.
Minister Testifies
Minister of Public Services and Procurement Helena Jaczek also testified at the government operations committee on Feb. 6, but she deferred to her deputy Paul Thompson for many questions asked by MPs.Jaczek took over the department in August, swapping roles with Filomena Tassi who became the Minister responsible for the Federal Economic Development Agency for Southern Ontario.
The Commons committee is trying to understand how the contracts were awarded and to scope out the influence of McKinsey in government operations.
NDP MP Gord Johns asked what are the disqualifying factors that would lead the government to not hire a contractor, given McKinsey’s involvement in controversies.
“This is a company that’s riddled in scandal after scandal, and Canadian taxpayers deserve to know what that threshold is,” Johns said.
“We certainly carefully monitor the situation, the allegations, the activities that the member has mentioned, as the Minister noted, these activities have not triggered our integrity regime,” Thompson said, noting there have been no criminal convictions.
Johns raised the US$573 million lawsuit McKinsey settled with U.S. states for helping to promote opioids. He said this wasn’t a conviction but that it counted “in terms of the court of public opinion.”
On the general question of outsourcing to consulting firms, Jaczek said she agreed with Johns’ concerns.
“I think we need to look at who we’re hiring and where there are opportunities to ensure that we have sufficient internal staff with the qualifications, the skills that we need to perform the tasks in front of us,” she said.
Conservatives had called on the Auditor General to review the McKinsey contracts earlier on Feb. 6.
“We don’t believe that Liberals can be trusted to investigate other Liberals,” said MP Garnett Genuis, in reference to Prime Minister Justin Trudeau asking Jaczek and Treasury Board President Mona Fortier to look into the matter.
