McKinsey & Company has pocketed more than $66-million in less than seven years under the Liberals.LIONEL BONAVENTURE/AFP/Getty Images
Business schools across the country would do well to undertake a case study on McKinsey & Co.’s remarkable success in winning contracts from the federal government since Justin Trudeau’s Liberals took power. There, they’ll find insights into how Ottawa really works.
McKinsey, the pedigreed consulting firm that has been plagued by a series of conflict-of-interest scandals spanning several countries, has been practically wedded at the hip to Mr. Trudeau’s government since the firm’s then-global managing partner, Dominic Barton, was picked to head up Ottawa’s advisory council on economic growth in 2016.
Out of the supposed generosity of its heart, McKinsey provided pro bono research support to the council. We are told that this had absolutely no influence on the Trudeau government’s subsequent awarding of a string of multimillion-dollar contracts to the firm, including, as The Globe and Mail reported last year, a $24.8-million deal to advise the Department of Immigration, Refugees and Citizenship Canada (IRCC) on “transformation strategies,” whatever that means.
This week, Radio-Canada arrived at its own tally of federal contracts awarded to McKinsey since Mr. Trudeau’s government was first elected in 2015: While the firm earned a mere $2.2-million in federal government work when Stephen Harper’s Conservatives were in power between 2006 and 2015, it has pocketed more than $66-million in less than seven years under the Liberals.
And even that sum, Radio-Canada conceded, does not provide a complete picture, since it leaves out contracts awarded by Crown corporations such as the Business Development Bank of Canada and Export Development Canada. The government’s response to an order paper question submitted by Conservative MP Tako Van Popta included $84-million in federal payments to McKinsey in the 18 months up to November on various contracts. That total includes payments to BDC and EDC.
Bloc Québécois MP Alexis Brunelle-Duceppe asked Immigration Minister Sean Fraser to provide the details of McKinsey’s IRCC contracts at a meeting of the House of Commons immigration committee in November. Mr. Fraser referred the question to his deputy minister, Christiane Fox, who in turn asked assistant deputy minister Hughes St-Pierre to answer, though not before adding: “I’d like to point out that one of the contracts that McKinsey was awarded in the past was to deliver a training program for our Black employees wanting to move into a leadership position within the department.” As if diversity, equity and inclusion (DEI) initiatives justify everything.
Mr. St-Pierre was equally unhelpful. “It was to advise us on how to transform the department,” was all he said of the largest and most recent contract the department handed to McKinsey.
The advisory council Mr. Barton headed called for a 50-per-cent increase in the number of permanent residents Canada accepts annually, from 300,000 in 2016 to 450,000 in 2021, to boost economic growth and reduce the old-age dependency ratio. The Trudeau government has gone even further than the council recommended, announcing plans in November to boost immigration numbers to 500,000 newcomers by 2025.
How Canada’s chronically backlogged immigration system can handle this surge is anyone’s guess. Whether McKinsey’s advice is worth the taxpayer money paid to the firm is equally impossible to discern. Ottawa refuses to provide a full accounting of the work McKinsey performed, or to make public any report the firm produced.
The chronology of McKinsey’s ever deepening business relationship with the federal government will not surprise anyone who has studied the strategies the firm has employed in any of the 65 countries in which it operates.
“Wedge yourself in and spread like an amoeba,” a senior McKinsey partner once said in explaining to young recruits how to win business from potential clients. “Once in, you should spread yourself in the organization and do everything.” The quote is included in When McKinsey Comes to Town, a recent book about McKinsey’s global activities by Walt Bogdanich and Michael Forsythe that examines the firm’s underbelly.
Can you draw a straight line between Mr. Barton’s cozy relationship with the Liberal government – Mr. Trudeau named him as Canada’s ambassador to China shortly after he stepped down from the top job at McKinsey – and the firm’s ability to win contracts in Ottawa? Is it just a coincidence that McKinsey landed a juicy deal to provide advice on how to transform the immigration department just after the advisory council Mr. Barton headed recommended transforming Canada’s immigration system?
These are not banal questions. Similar ones are swirling around French President Emmanuel Macron, whose government has also awarded countless contracts to McKinsey in recent years. French authorities have opened an investigation into the potential illegal financing of Mr. Macron’s 2017 and 2022 election campaigns. Among other things, the authorities are probing whether McKinsey associates worked on Mr. Macron’s campaigns for free as a networking opportunity that subsequently yielded lucrative paid contracts.
Wedge yourself in and spread like an amoeba, indeed.
Konrad Yakabuski