44th Parl. 1st Sess.
February 6, 2023 11:00AM
- Feb/6/23 3:30:09 p.m.
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I rise today to speak to the House about the ongoing Liberal-McKinsey scandal. This is the affair through which the government gave over $100 million in contracts to its friends at McKinsey & Company.
The Liberals' response to this scandal has been to say not to not worry, that they will have the ministers responsible for the Treasury Board and procurement investigate what happened in the context of Treasury Board and procurement. In other words, they are not only having Liberals investigate Liberals, but precisely having the Liberal cabinet ministers responsible for this issue in the first place investigating themselves.
The Prime Minister thinks that an appropriate response to waste and corruption within his own government is to have the ministers responsible for that waste and corruption investigating themselves. The Conservatives do not think that is an appropriate response to scandal, and that is why we are moving this motion today to call for an independent investigation by Canada's non-partisan Auditor General.
Of course, we have seen in the House the Auditor General attacked by the Minister of National Revenue. The Conservatives have faith in our independent officers of Parliament, and that is why we want to bring in the Auditor General and ask her to investigate the waste and corruption we are seeing under the Liberal government.
The Liberal-McKinsey affair has three main elements to it. We can speak about corruption, about control and about character.
The Liberals have given over $100 million that we know of so far in contracts to McKinsey & Company. At the same time as McKinsey was selling its services to the Liberal government, Dominic Barton, who was the managing partner of McKinsey, was leading the Prime Minister's own growth council. Although Dominic Barton has said that he is not friends with the Prime Minister, that he barely knows these people and that he did not recognize the Prime Minister in an elevator the first time he saw him, we have the Deputy Prime Minister talking about how close Dominic Barton was to the Prime Minister, how accessible he was and how they had a relationship of being able to contact each other any time, which was build up over time.
On the word of the Deputy Prime Minister, there is a close relationship between the managing director of McKinsey at the time and the Prime Minister. Analysts at McKinsey are doing analytical work for the Prime Minister's growth council at the same time as McKinsey is selling its consulting services to the government. It is no surprise under those circumstances, when we have these clear conflicts of interest and close relationships, that there was a significant spike with respect to the volume of contracts McKinsey was getting from the government. We have conflicts of interest driven by these relationships.
Let us talk as well about control, because Canadians are asking who is pulling the strings, who is making the decisions and who is really deciding the direction of the government. What has been happening with the government is that it has been bringing in high-priced outside consultants, who have been both selling to the government and also making very significant policy decisions. They have been doing work that the public service has said it could be doing itself. We do not know what these consultants are doing, but the consultants are playing a very significant role in setting policy and direction, and they are not subject to the same kinds of transparency requirements as the public service.
If Canadians want to know what discussions were happening within the public service, they can use the transparency and accountability tools that are available to them. However, if Canadians want to know about decisions that are made at McKinsey that are in fact shaping what happens in government, they are not able to access that information. In fact, up until now, McKinsey has not even been willing to provide its client list and that is a huge problem, because McKinsey has a history of working on both sides of the same issue.
In the United States, we had instances where McKinsey was working for the FDA, which is responsible for approving drugs, and it was working for pharmaceutical companies at the same time. It is working for the approval body as well as for the companies that are seeking that approval. In fact, the New York Times revealed instances where the same individual was working for both the FDA and those making the applications.
Is that same thing happening in Canada? Do we have decisions being made by McKinsey while it is also working for clients who benefit from those decisions? The reality is that we do not know, because McKinsey will not disclose its client list. Therefore, there is a lack of transparency and there is influence and control coming from these high-priced consultants who are being hired by the government.
Therefore, there are issues of corruption and control. However, there are also issues of character.
Who is this company? Who is McKinsey, and what has it done around the world? Most notably for the impact it is having here in Canada, McKinsey worked for Purdue Pharma. This is the company that invented OxyContin and was responsible for driving the opioid crisis that has devastated our communities.
In 2007, Purdue pleaded guilty to criminal misbranding of its products and downplaying the addiction risk to market these opioids to people. It did this so that it could make money with total disregard for the suffering caused. After 2007, McKinsey continued to work for Purdue Pharma even though it had pleaded guilty. McKinsey put together proposals with a number of recommendations aimed at helping Purdue Pharma supercharge its opioid sales.
Those recommendations included, incredibly, paying bonuses to pharmacists in instances of overdose deaths. In cases where traditional pharmacies were trying to put in place mechanisms to prevent over-prescription, McKinsey proposed that one could have a mail-in process for people to order opioids without needing to go to traditional pharmacies, allowing them to circumvent the checks that existed.
McKinsey was doing this kind of work for Purdue with no regard for basic ethical or moral norms. That was when Dominic Barton was leading McKinsey. I asked him about this at committee last week, and Mr. Barton said he had no idea that McKinsey was doing this work for Purdue. It was a client for 10 years, and the managing director claimed he had no idea.
McKinsey has done other work around the world. It has worked with Russian state-owned and affiliated companies. It has worked with a Chinese state-affiliated company that is building militarized islands in the South China Sea.
These points speak to the character of this company. If we want to talk about conflict of interest, we have a company that is doing work for the Department of National Defence here in Canada while working with Russian and Chinese state-owned and state-affiliated companies.
McKinsey did a report for the Saudi government in which it identified influential dissidents who were driving criticism of Saudi economic policy. Not surprisingly, after those accounts were identified, these dissidents were subject to various forms of harassment. One of them actually lives in Canada and was subject to harassment on Canadian soil.
We have corruption. We have conflict of interest. We have control. We have a lack of character from this company. This is the company that the Prime Minister keeps. This is the company that has gotten over $100 million in contracts.
While Canadians are suffering, well-connected Liberal insiders have never had it so good, especially the well-connected Liberal insiders at McKinsey.
In the context of this scandal, the government's response is that it is going to have the cabinet ministers responsible for procurement and for the Treasury Board do their own investigation. That is clearly not good enough.
The Liberals have made a complete mess of governance. They are wasting taxpayers' dollars and giving money to their friends. The public service is growing, and they are giving more and more money to outside consultants. We cannot trust the Liberals, who are responsible for these scandals, to then come in and say that they are going to investigate themselves.
That is why, as an urgent matter, it is time to ask the Auditor General to come in and get to the bottom of what happened here. We need the resources and the ingenuity of the Auditor General to find out what is happening and assess value for money.
There are many different aspects to this scandal. Canadians need to decide, at a basic character level, if this is the kind of company that they want to see their prime minister doing business with. The Auditor General is well positioned to assess value for money, to say, “What did we actually get for this $100 million-plus?”
How much money was actually spent, by the way? We cannot get a straight answer from the government on this. Moreover, was there value for money? Many public servants have told the media that they do not know what work was done. They brought in PowerPoint slides and said that they were going to change everything, but nothing got done.
It is time to bring in the Auditor General. Conservatives want this motion adopted so that the Auditor General will help all of us get to the bottom of what happened between the Liberals and McKinsey.
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- Feb/6/23 3:40:55 p.m.
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Mr. Speaker, in fact the motion that is before the House asks for those records from 2011, so we are quite open to the Auditor General's doing that work as well. My understanding of the record is that there were very small volumes in that earlier period and that there has been dramatic, 50-fold growth under the current government.
I would just say that some of the ethical scandals I have mentioned, including the collaboration with state-owned and affiliated companies around the world, the work with the Government of Saudi Arabia and the work with Purdue Pharma, have come out subsequently.
The government has been in power for eight years. We have seen what the Liberals have done, including dramatically increasing spending on outside consultants and McKinsey in particular. The government has to be accountable for its record.
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- Feb/6/23 3:42:54 p.m.
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Mr. Speaker, certainly on this side of the House, we are prepared to work with any individuals and any parties that want to help us get to the bottom of these scandals that we have seen under the current government. There has been a ceding of control by Liberals to outside consultants. There has been a waste of money in duplication of efforts. There have been conflicts of interest.
There are significant concerns about what McKinsey is up to around the world and the conflicts of interest that exist where they are working for both sides of the same issue. For instance, they are working for the Canadian Department of National Defence while working for hostile interests around the world. These are all issues that we need to get to the bottom of. I hope that this House will support the value-for-money audit that we need to see happen from the Auditor General, as well as some of the other ongoing work that is required to get to the bottom of this Liberal-McKinsey scandal.
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- Feb/6/23 3:45:43 p.m.
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Mr. Speaker, I thank my colleague from Sherwood Park—Fort Saskatchewan for sharing his time with me.
Today we are debating concurrence in the fifth report of the Standing Committee on Government Operations and Estimates. The motion asks that the Auditor General be called upon to conduct, as soon as possible, a performance and value-for-money audit of the contracts awarded to McKinsey & Company since January 1, 2011, by any department, agency or Crown corporation.
How did it come to this? Right now, millions of Canadians are struggling financially. The cost of living has gone up. Everything is expensive. People do not have enough money. Meanwhile, contracts are going to multinational corporations like McKinsey.
Since 2016, McKinsey has been awarded over $120 million worth of contracts for studies and proposals on matters relating to immigration, national defence, the Canada Border Services Agency and public services. It has received millions of dollars to make recommendations. However, we cannot get any information about the real purpose of the studies that were commissioned.
The Prime Minister is not saying a word. We are being told that two ministers, the President of the Treasury Board and the Minister of Public Services and Procurement, are going to get answers. The members opposite must think we are not very bright.
We all know nobody wants to say it even though everybody knows it. That is the crux of the problem with the McKinsey file right now. There is deep secrecy around what the firm has done for Canada.
Our motion asks for an audit dating back to 2011, when we were in power, because we know that we have nothing to hide. The contracts awarded back then were for consulting services on very specific topics. The value of the contracts was not exorbitant. In 2014 and 2015, no contracts were awarded. All of a sudden, in 2016, the contracts ballooned. It was as though, suddenly, no one in the departments knew what to do. Suddenly, no one knew what to do about national defence, immigration and border services, so contracts worth tens of millions of dollars had to be awarded to McKinsey to get the answers. I will repeat once again that we have not been able to determine what was proposed.
This is the eighth year of a government that has been implicated in a number of conflicts of interest. We went through the SNC-Lavalin affair. On several separate occasions, the Conflict of Interest and Ethics Commissioner prepared reports on the Prime Minister. Today, we are again in a situation where it is abundantly clear that there is some type of conflict of interest.
Dominic Barton was the global managing director at McKinsey when the Liberal government took power in 2015. He defended himself in committee by saying that he had not done anything, that he was not aware of anything and that he did not know anything.
In one of the questions that I asked him before the Standing Committee on Government Operations and Estimates, I told him that he was fascinating. In looking at him, I realized that he has a real talent for not answering questions and for pretending that this is not happening and that it is all made up. However, the facts speak for themselves. As soon as the government took power, it started following Mr. Barton's advice. He told the government to hire his firm so that it could give the government the tools it needed to know what to do, because the government did not know what to do.
That is where we are at now. There is even an ethical issue here. That being said, our motion has one main objective. We want the Auditor General, an independent officer of Parliament, to conduct an audit and report to Parliament on what happened with the various contracts that have been awarded to McKinsey since 2011. Taxpayers are the ones footing the bill, so they have the right to know.
As I said, over the past eight years, the government has completely lost control of public finances. Everyone knows that Canada's debt has doubled. We are going to have to pay interest on the debt, which will cost $40 billion a year. We are going to have to take money that was allocated for operating expenditures and use it to pay the interest to the banks because of the $15 billion in contracts awarded to subcontractors, including McKinsey. This raises questions, and that is why the Auditor General must investigate to tell us what we got for $120 million.
Were the contracts awarded properly? Was the information necessary? Were public servants capable of answering these questions?
There are so many unanswered questions.
The Business Development Bank of Canada is another example. The government appointed a new president. The first thing she did was take $4.9 million and give it to McKinsey so they could tell her what the strategic direction of the Bank of Canada is. Internally, people saw a president come in who, instead of consulting them to develop the long-term strategic plan for the Bank of Canada, brought in McKinsey. Why?
These are the kinds of questions that need to be answered. At some point, there is a reason that it is in the news and everyone is asking questions. We know there is something wrong.
One of the problems with McKinsey is the company's history. McKinsey has been involved in a number of activities involving questionable countries, secret contracts, previous involvement with opioids, influencing pharmaceutical companies. On the one hand, McKinsey was telling pharmaceutical companies how to keep selling products and, on the other hand, advising governments to try and solve the problem. That makes no sense. This company certainly raises a lot of ethical issues.
McKinsey is also known to have worked with Chinese state-owned enterprises, including one that builds militarized islands in the South China Sea. It hosted a corporate retreat on the road to a concentration camp in China's Uighur region. It has worked with companies affiliated with the Russian state, long after the 2014 Russian invasion of Ukraine.
This is public, known information; however, eventually, a decision has to be made. Once the government has that information, what does it do with it? Will contracts continue to be awarded to conduct studies, provide information and tell our public service how to handle various strategic issues, such as defence or immigration? The influence of the McKinsey reports was clear, in relation to the Century Initiative, when the Minister of Immigration announced Canada's new immigration targets before Christmas, in November. The plan is to bring in 500,000 people per year starting in 2025, to increase Canada's population to 100 million by 2100. However, whenever we ask questions, the answers come from elsewhere, because the minister never even bothered to absorb the information himself. People come and give numbers, without considering the francophonie, for example, or our accommodation capacity. We are talking about 12 million people in greater Montreal; I will give the leader of the Bloc Québécois credit for talking about this. As a result, eventually, people start to wonder where this information is coming from and how we got to the point where our own government essentially has no idea what to do and turns to McKinsey for answers. It simply executes the plan only to realize later that it does not work.
Our motion is simple. We hope the government will support it and understand that we need the Auditor General of Canada to get to the bottom of all this so we can find out what really happened, especially considering the tough economic times we are in. Canadian taxpayers want the government to manage their money properly. All we have been seeing for the past eight years is waste.
Once again, we are seeing the government award contracts to its friends for advice about things that should cost a lot less; I could call them something other than contracts, but I will refrain. We need to know what the offer was, the bid, so we can see if it makes sense and move forward. That is the point of consultants. If they have good ideas, we use those ideas. However, when we do not know what the idea is and then the government comes out with some kind of vague policy, obviously there is something fishy going on.
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- Feb/6/23 3:58:35 p.m.
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Mr. Speaker, I thank my colleague for her question. That is exactly what I said at the beginning of my speech. These are hard times. People are working hard for their money, and many of them do not have enough to live on because inflation is making everything more expensive.
We have here a government that is freely squandering taxpayers' money. These questions deserve answers. That is why, today, we are asking that the Auditor General of Canada investigate the contracts awarded to McKinsey.
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- Feb/6/23 5:19:44 p.m.
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Mr. Speaker, this does not happen often, so let the Hansard reflect that I rise to agree with the hon. parliamentary secretary to the government House leader on one point. This needs to be expanded. I will also go on the record to agree with the comments that have been made by the opposition sides: I do not necessarily have faith that the government is equipped to run an investigation that is fulsome enough to provide the answers that Canadians need.
This is why it is important to acknowledge that, in this House, we cannot direct the Auditor General. Let us be clear that their role is independent, and we can ask them to undertake an audit. That audit needs to happen, and it needs to be expanded to include the five other pigs at the trough.
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- Feb/6/23 5:21:44 p.m.
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Mr. Speaker, that is scintillating indeed, but again, it appears to me that members are a little gun-shy on the Conservative side to include consultancies like Deloitte. Deloitte would make McKinsey look insignificant in comparison, when we look at how Deloitte went from $17 million, in 2015, to $173 million. Let us look at where that waste goes. Let us expand to allow the Auditor General to do this.
I am not here to be entertained at committee. I often work closely with members of the opposition side. I would remind the member that I remain firmly as an opposition member. I work very closely with opposition members at every committee I am on, including Conservative members and Bloc members, to hold the government accountable. However, I would challenge them to stand up and name the five other pigs at the trough. I would challenge them to go back to 2011, where they are also culpable, where their cuts to the public sector and squeezing of public sector wages resulted in these gross taxpayer expenditures on private sector outsourcing.
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- Feb/6/23 6:20:16 p.m.
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Madam Speaker, it is apparent that they are not being followed, because even public servants are coming forward and expressing their discontent with the implication of McKinsey & Company in policy decisions, outcomes, policy directions and execution of policies within the government. They are clearly not being followed.
The fact that the government would propose that it investigate these policies, which it has not itself followed, is really quite ridiculous. That is the reason we are here today with this motion asking to bring in an objective third party, the Auditor General, to do a thorough verification.
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