Government Operations Committee on April 24th, 2023

[The Chair, Conservative, Kelly McCauley]

Colleagues, we'll get started. I call this meeting to order.

Welcome to meeting number 62 of the House of Commons Standing Committee on Government Operations and Estimates. Pursuant to the motion adopted by the committee on Wednesday, January 18, 2023, the committee is meeting on the study of federal government consulting contracts awarded to McKinsey & Company.

Colleagues, to start off, I apologize. There is a bit of a change to the original schedule. Ms. Bonin will be sharing the beginning time with Mr. Wernick. We will not be splitting the time into one hour and one hour. We will have two opening statements.

We'll start with Mr. Wernick, please, for five minutes.

[Michael Wernick, Jarislowsky Chair in Public Sector Management, University of Ottawa, As an Individual]

Thank you, Mr. Chair.

Thanks to the committee for the opportunity to come to have an exchange today. I'm very pleased to be invited. I hope to be helpful to your study and will come at it with three perspectives.

First, I am now working part time at the University of Ottawa on public sector management issues, not on “what” government does but “how” it does it. You can find a series of articles, podcasts and interviews on my LinkedIn feed, if you're curious.

Second, unlike my fellow academics in the field, I was an executive in the public service for 28 years, a deputy minister for 17 and head of the public service for three. I have some experience in getting work done and with the issues associated with using external contractors and, indeed, managing public servants.

Third, I have done a handful of small consulting gigs over the past three years since I left government. I have a little bit of exposure to the world of consulting firms and the perspectives of suppliers.

I sent the committee clerk a while ago two articles I wrote earlier this year. I hope you've had them. One was on February 7 in Policy Options about the use of outside contractors. The other was on February 11 in The Globe and Mail. It made some suggestions on how to strengthen public sector capacity. In the interest of your time, I won't go over my Policy Options article in any detail. I'm happy to take questions. The short takeaway is that the issue is not whether to use outside suppliers of services but how to use them for best effect.

One thing I do want to say on the record is that you're not bystanders to this. Some of the demand for the use of consultants comes from elected politicians, and always will. I worked with several ministers over the years from both sides who were instinctively skeptical of public service advice, or their delivery skills, and wanted validation from an outside perspective. I don't see that ever changing, and there's nothing wrong with it. No elected politicians will ever want to be completely dependent on the public service, and nor should they be. They would always want outside perspective from time to time.

In the discussion that broke out earlier this year, concerns have been raised about the public sector's potential dependency on outside help. That's a valid concern. Concerns about getting value for money for taxpayers are valid. Concerns about the ongoing capability of the public sector are valid, and I wish drew more sustained and consistent attention.

Personally, I don't buy the gloom and doom diagnostic that's been running over the last few months, at least not in full, but if you choose to buy into that diagnostic, a question arises: What will you do about it? You're people with influence as members of the government and members of the government in waiting.

I made a number of suggestions in the piece I wrote for the Globe and Mail, and I have more if you're interested. First, we do not need a one-off royal commission on the public service. We need a more robust supply chain and a variety of sources of ideas and innovation, not just about policy but especially about management.

The committee could, and I encourage you to, endorse any or all of the five measures I proposed in my Globe and Mail piece. Create a new House-Senate committee on the public service. Recreate the advisory committee to the Prime Minister that existed in the past. Ramp up interchanges between the public service and other sectors to at least 100 people in each direction each year. Create a better government fund of about $20 million a year to generate ideas and a safe place for debating them in universities, think tanks and foundations. Finally, use the Council of the Federation and other fora to bring together federal, provincial, municipal and indigenous governments on common work plans and agendas for a more effective public sector for Canada.

Here's another one that's my reaction to the recent budget. It isn't good enough to just set a target to spend less on consultants. That's a classic half measure. The other half that is missing is a commitment to double the annual investment in training and leadership development within the public service. I would like to see a commitment to protect training and leadership development budgets when the operating budgets are cut by 3% in the coming years. You should ask the government for that commitment. You could ask the parliamentary budget office to provide you with a thorough baseline study of what the government spends on training and leadership development, both in-house and external suppliers. What does it spend to reinvest in and recapitalize its most important asset—its labour force?

My recommendation to you as a committee is that the next big study you take on should be about the capability of the public service, how to sustain it and how to improve it. Instead of always looking back, look forward. Think about future-proofing. Call witnesses, make implementable recommendations and call for a government response.

I would like to see all political parties make at least three specific implementable commitments in their platforms in the coming election that speak to how they would improve public sector capacity—not generalities, but specific commitments.

You can believe in big government, limited government, a more expansive role for the federal government in the federation or a more limited role for the federal government in the federation, but I hope you will all agree that Canadians want good government.

Thank you, Mr. Chair.

I'll be happy to take your questions later.

[The Chair, Conservative, Kelly McCauley]

Thank you, Mr. Wernick.

We have Ms. Bonin, please, for five minutes.

[Geneviève Bonin, Managing Director and Partner, As an Individual]

Mr. Chair and committee members, thank you for inviting me to contribute to your work.

I'm a fellow-certified management consultant and a professional engineer, and from 2018 to mid-2022, I was the leader of the social, health care, public and education sector at McKinsey Canada. I recently joined the Boston Consulting Group as a managing director and partner, and I am in my first year of orientation with the firm.

I am happy to provide you with background information relating to my work for the Government of Canada during my time at McKinsey.

First, however, I would like to tell the committee about my professional career and my history.

[The Chair, Conservative, Kelly McCauley]

I'm sorry, our interpretation does not seem to be working.

Okay, we're working again.

Please go ahead.

[Geneviève Bonin]

I should have warned you that I was going to speak in French, Mr. Chair.

Before I entered the consulting world, I was a member of the Canadian Armed Forces. I was commissioned in June 1988 at the age of 16.

I was educated at the Royal Military College of Canada, graduating with a Bachelor of Chemical and Materials Engineering, and I trained as a naval engineering officer. I served on multiple training deployments at sea as a naval engineering officer. I was one of the first females to serve as a commissioned officer in a combat role on our Canadian ships. I was also educated at the Royal Naval Engineering College of the British navy at a time when they had no women serving as engineering officers.

My service to my country remains among my proudest achievements to this day. During my time with the Canadian Armed Forces, I experienced first-hand the sacrifices that our serving members and their families have to make for the benefit of all Canadians. In particular, many other incredible women have done the hard work of carving out an equal space for all genders in the Canadian Armed Forces over long and admirable careers. I'm so proud to have played a small role this early in my professional life.

After I left the military, I continued my public service in different ways, and currently serve on the boards of the True Patriot Love Foundation, the Invictus Games 2025, and the Royal Ottawa Hospital's Institute of Mental Health Research.

I have always viewed my role as a consultant as an extension of my desire to serve. The modern challenges our society faces are complex and sometimes require expertise and capacity that might not exist in the public service. This is why it is important to have consulting organizations that are able to step in and assist the public service when necessary.

It is every consultant's duty to know when value can really be created. It is also equally important for us as consultant to transfer our skills and capabilities in order for the public sector to be sustainable on its own. This has been and remains a top priority for all the consulting engagements I have been involved with.

I was hired by McKinsey in 2018 to focus on the public sector. I had already been working in public sector consulting for over 22 years and had established myself as an expert in diversity, equity and inclusion. McKinsey was already serving public sector clients, and the firm thought that our Canadian government might benefit from McKinsey's global expertise in certain sector areas.

When a rapid response was needed to the issues occurring within the military's internal culture, for example, McKinsey was able to provide the tools needed to assist. As a female who had previously been in the armed forces, I had first-hand experience with Defence's internal culture. Both McKinsey's global qualified experts and I have training and experience in conducting trauma-informed investigations and interviews.

We led or participated in a series of consultations with quite a few people from a wide range of defence and armed forces personnel. Many of these interview subjects were impacted by gender or racially based discrimination and harassment. As such, it was important that we gather their important perspectives in an independent, external and trauma-informed manner. Through this collection of data and expert analysis, concrete recommendations on how to improve the culture were made for the benefit of not only our military but all Canadians.

It is my firm view that the work I performed as a partner at McKinsey with the Government of Canada was a valuable and ethical contribution.

I look forward to answering your questions today, and I hope to assist the committee in its work.

Thank you, Mr. Chair. I am prepared to answer questions from the committee.

[The Chair, Conservative, Kelly McCauley]

Thank you very much. I appreciate that both of you changed your schedules a bit to accommodate our committee.

We have Ms. Kusie for six minutes, please.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Thank you, Mr. Chair.

Thanks to the witnesses for being here today.

Congratulations on your achievements, Ms. Bonin. They are truly incredible. I worked as a diplomat at the Department of Foreign Affairs of Canada for 15 years myself. I know that is not the same as the Department of National Defence, but I still think we have a lot of things in common.

Madame Bonin, how many contracts that McKinsey had with the Government of Canada did you work on?

[Geneviève Bonin]

I don't have that information. Having left McKinsey, as you'll appreciate, I no longer have access to any files or any contracts. I believe you have that answer. You'll have to go back to McKinsey to get that specific information.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

I would love to have that answer in the documents. Unfortunately, we don't have the documentation as of yet.

What was your role specifically in these contracts, Madame Bonin?

[Geneviève Bonin]

There were many different types of roles—sometimes coaching the team, sometimes leading the engagement, sometimes providing expertise.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

How were these particular contracts assigned to you?

[Geneviève Bonin]

All of the contracts awarded to McKinsey were done based on the competitive rules and procurement process of the Government of Canada.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

While employed with McKinsey & Company, did you ever have discussions in writing, in personal phone...or virtually with the staff of the Prime Minister's Office?

[Geneviève Bonin]

No, I did not.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Did you ever have discussions with the chief of staff to the Prime Minister, Katie Telford?

[Geneviève Bonin]

No, I did not.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

In the internal audits conducted on the Government of Canada's contract with McKinsey & Company, there were many irregularities found in the procurement processes. In the contracts with the Department of National Defence, they found that there was no formal justification made for a sole-source contract, and payments were made even before work was completed. Why do you think so many irregularities with the procurement processes were found in contracts with McKinsey?

[Geneviève Bonin]

I saw the audit reports. Unfortunately, I no longer have access to any of those files, so it's hard for me to comment on that. All I can say is that McKinsey, in conducting work with the government, would have strictly abided by the requirements that were put in front of them by the government, whether it is a signature or anything else for that matter.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Do you think that McKinsey gets special treatment with the Government of Canada contracts compared with other consulting firms?

[Geneviève Bonin]

No.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

All right.

While at McKinsey, did you do work for other defence departments around the world?

[Geneviève Bonin]

No, I did not.

[Stephanie Kusie, Conservative, Calgary Midnapore, AB]

Do you have colleagues at McKinsey who worked on these contracts for the Department of National Defence as well as for other national defence departments of other countries?

[Geneviève Bonin]

To my knowledge, and again I don't have access to all of the files and am working from memory...only for allied nations if there was anybody who came to the table and advised the Department of National Defence....