Immigration Minister Sean Fraser said Canada’s target of welcoming 500,000 immigrants per year by 2025 has nothing to do with his department’s consulting contracts with McKinsey & Company or past policy advice from Dominic Barton, the former head of the global consulting firm.
Mr. Fraser appeared Wednesday before the House of Commons committee on government operations, which is holding hearings into the federal government’s contracts with McKinsey and other consulting companies.
“As the person who sets these policies, I can tell you that I wasn’t informed by McKinsey’s work and didn’t meet with them in my development of this past year’s immigration levels plan,” he said in response to opposition questions. “The allegation that McKinsey is making decisions around immigration levels policy is false.”
Federal officials have said the total value of federal contracts awarded to McKinsey since 2015 is at least $116.8-million. Mr. Fraser said McKinsey received two contracts from his department between 2018 and 2020, prior to him becoming minister in October, 2021.
He said that work was to assist the department in updating its digital services and did not involve policy advice.
Spending on outsourcing to the company has climbed steadily each year under the Liberal government, prompting criticism on several fronts. Academics have said the increase is part of a much larger rise in federal outsourcing, which rose to $14.6-billion in 2021-2022 from $8.4-billion in the 2015-2016 fiscal year, and warrants closer scrutiny.
Opposition MPs have also questioned whether the growth in outsourcing to McKinsey is tied to the fact that in 2016 and 2017, Mr. Barton worked as both the global managing director of the company and as the chair of an influential economic advisory council to the federal government.
That council recommended in a 2017 report that Canada should increase annual permanent economic immigration from 300,000 to 450,000 over five years.
Bloc Québécois MPs and Conservative MPs from Quebec have raised – including through questions to the minister Wednesday – the fact that the government did follow that advice and the immigration department hired McKinsey after that report was released.
Bloc Leader Yves-François Blanchet has also highlighted Mr. Barton’s past association with the Century Initiative, a group that says Canada should aim to boost its population to 100 million by 2100, up from the current 39.4 million. Mr. Blanchet said this would overwhelm Quebec’s francophone population with non-francophones.
In his recent testimony to the committee, Mr. Barton also said there is no connection between his personal role on the government’s advisory council and the contracts to McKinsey that followed. He also told Mr. Blanchet that he supports bilingualism.
During Wednesday’s hearing, Liberal MP Irek Kusmierczyk quoted a recent opinion piece from former senior Conservative MP John Reynolds, who defended Mr. Barton and wrote that Conservative attacks against him are “baseless.”
On Monday, the committee heard from Procurement Ombudsman Alexander Jeglic, who has been asked by Federal Procurement Minister Helena Jaczek to review federal contracts with McKinsey.
Mr. Jeglic said as part of his office’s regular review work, it has found issues with the awarding of two contracts to McKinsey, including one by the immigration department.
The watchdog said the department awarded a $1.6-million contract to McKinsey for a “service transformation strategy roadmap” after relying on criteria that “was overly restrictive and may have reduced competition.” Mr. Jeglic noted that the department received numerous comments from interested suppliers about the restrictions, but they were not changed and the process resulted in McKinsey being the only bidder and receiving a perfect score in a technical evaluation.
Asked about that finding Wednesday by the Conservatives, Mr. Fraser defended the government’s approach.
“It is not my view that the process was rigged somehow to select a particular outcome,” said Mr. Fraser.
The second contract raised by the ombudsman, for $452,000, was awarded in June, 2020, by the department of Innovation, Science and Economic Development (ISED) for economic analysis services. Mr. Jeglic said the competition generated two bids. After McKinsey was ranked second, officials requested a re-evaluation.
“The response from one of the evaluators stated that he would be ‘happy to delete the financial evaluation e-mail.’” The original top ranked bidder was then deemed non-compliant for not meeting all mandatory criteria.
“The actions taken and ultimate results of this evaluation process leave ISED open to the perception that this contract was not awarded in a fair and transparent manner,” the ombudsman wrote in a report in December, 2022. The report did not name McKinsey at the time, but Mr. Jeglic told MPs this week that that section of the report was in reference to a contract awarded to the company.
Conservative MP Stephanie Kusie told The Globe and Mail that the issues raised by the ombudsman with the two McKinsey contracts show a broader review is warranted.
“I am confident that this is just a small tip of the iceberg of issues involved with the contracts issued to McKinsey,” she said.