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 3:42:54 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 4:42:20 p.m.
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Mr. Speaker, my colleague points out a difference: For procurement there is a certain something being received, but the McKinsey situation is about advice. We have some of the best public service members in the world, and when they were questioned about this, they said they could not even find what was offered to the Canadian population by these contracts.
I am wondering if the member could comment on the issue of accountability, because obviously the government gave out these contracts. What does he think we can do to help improve confidence in this situation? I am really worried that Canadians are losing trust in our institutions with each scandal that comes from the Liberal government. What can we do to regain that trust in our institutions?
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- Feb/6/23 4:44:15 p.m.
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Mr. Speaker, I want to thank my colleague for the points he raised in the House.
As I mentioned, back home, ordinary people are having a tough time because of the cost of living and inflation. We see that taxpayers money, Quebeckers' and Canadians' money, is being used by the Liberals to help their friends, their contacts, those who have power or hidden power.
Could my colleague share his thoughts on what an injustice this scandal is to Canadians?
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- Feb/6/23 5:23:08 p.m.
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Mr. Speaker, I am listening to this debate and there is so much I could say.
Actually, I am listening to the other parties speak. On one side, we have a Liberal government that does not seem to understand that voters gave it a minority mandate. During the first scandal involving the WE Charity, it prorogued Parliament and sent us into a federal election with the same outcome. Then, it signed contracts with private companies to replace public servants. It was influenced by a private firm. Ultimately, these policies allowed the government to do business with the private sector and not respect its own public service.
On the other, we now have the Century Initiative scandal, which apparently started under Brian Mulroney. If the public service ended up being slashed, it is because the Conservatives pursued an austerity policy.
Then, there is the NDP, which often proposes major expenditures. I am trying to find a balance here. If greater care is not taken, expenditures will go up, and, at some point, similar cuts will be made. In the meantime, there will be countless debates on public finances through countless democratic cycles.
Finally, on the question of the importance of respecting the public purse to avoid going through the austerity and cuts we saw under a Conservative government, as well as the importance of seeking clarity in this debate, we need to know whether the Century Initiative that began with Brian Mulroney continued under Mr. Harper.
We can see that there are still a lot of loose ends in this whole scandal. What does my colleague think?
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- Feb/6/23 6:09:34 p.m.
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Madam Speaker, that was an incredible speech from my incredible leader. It is certainly an honour to serve with the member for Carleton, and it is always very difficult to follow his speeches, but that is what I am going to have to do here today.
The bottom line is that the main reason we have brought forward this concurrence motion today is for one reason and one reason alone, and that is that we do not trust the government to audit itself. I say to call in the auditors. That is what I say.
Why should we have any faith in the government to audit itself after the horrific things that we have seen in the time that the Prime Minister and the government have been in office? We have seen things such as SNC-Lavalin, which was a terrible scandal. We have seen things such as the WE Charity, where millions and millions of dollars were spent without any idea as to where it was going.
As a woman, I find especially offensive all of the women who have been thrown under the bus, such as the former justice minister, for example, or the former health minister. We have seen Celina Caesar-Chavannes, who has now said that she was not treated well by the government or the Prime Minister and, sadly, most recently the former minister of sport, who had to take a leave of absence in an effort to deal with the government. Conservatives do not trust the government to be ethical or to audit itself, so I say to call in the auditors.
Liberals will not admit to how much money they have spent. On January 4, CBC published an article showing the Liberal government has spent over 30 times more in contracts with McKinsey & Company than previous government, but on January 17, The Globe and Mail published an article stating the actual value of the government contracts with McKinsey since 2015 amounted to $101.4 million, much higher than previously reported. However, it did not stop there.
On January 31, The Globe and Mail published another article based on documents in a court case in Puerto Rico. Federal contracts awarded to McKinsey are now estimated to be at least $116.8 million. We have asked the Prime Minister several times in the House to tell us the amount he has spent on McKinsey & Company. The Liberals will not even admit to how much they spent. It is time to call in the auditors.
Major policy decisions are being made by McKinsey & Company and not public servants. We have seen the influence of McKinsey & Company throughout the government, for example, specifically with immigration. We have seen Dominic Barton's influence on the immigration project, along with his new century initiative. This is influencing immigration policy within our country, in addition to other policies.
I just came from the government operations committee, where the current CEO of the Infrastructure Bank admitted to one of our fantastic members, the member of Parliament for Haldimand—Norfolk, that the Canada Infrastructure Bank was actually a product of Dominic Barton and McKinsey. He actually admitted to that, and it is not surprising because if we look at the Order Paper questions that we received, the outline of McKinsey's goal was consulting advice and recommendations on “decision criteria to screen and evaluate potential investments, including objectives, terms and principles [and] benchmarking review of these criteria with other infrastructure banks around the world”, based on its mandate.
It does not stop there. Other projects McKinsey was hired for by the Infrastructure Bank included, “Consulting advice and recommendations on strategy-related matters to advance the CIB's mandate and increase in public impact”. It sounds like it was hired to try to convince the public it was a good thing. It goes on to say, “Facilitating expert adviser workshops and recommendations to advance the CIB's mandate and increase the public mandate.“
Once again, we cannot trust the government because its major policy decisions are being made by McKinsey and not by public servants. We have to call in the auditors. There is a consistent lack of transparency and accountability that we have seen by the government.
When we had Mr. Barton at the government operations committee last week, he tried to create the illusion of no relationship, no friendship, between himself and the Prime Minister. However, good friends embrace when they greet each other. Good friends have friends over for dinner, as we saw Dominic Barton do with the current finance minister. He was over at her house for dinner with other influential people.
In addition to all the other things I previously mentioned, there is a clear lack of transparency and accountability with this government and its relationship with McKinsey & Company. We have also seen it from the former finance minister, Bill Morneau, who actually makes reference to it in his book. We have seen the glowing welcome that the Prime Minister gave Dominic Barton at Davos at the World Economic Forum, and in 2016. There is a clear lack of transparency and accountability, and there is the proximity of the relationship between the government, the Prime Minister and McKinsey & Company. Do members know what we need to do? We need to call in the auditors.
A government should not be doing business with a company with such low ethical standards. I would not even know where to begin there. I could start with the campaign financing in France that we have seen. We could talk about McKinsey's contributions in the opioid crisis with Purdue Pharma. We could talk about the criminal charges for insider trading, which its former employees have been implicated in. We could talk about the consulting work that it did for the U.S. immigration, ICE, and creating terrible conditions for refugees. We could talk about McKinsey's strategizing for Russian missile producers.
We could talk about McKinsey's implication in China. I thought it was public knowledge, but unfortunately the minister for procurement and public services had never heard of this. The company's retreat in China in 2018 took place only seven kilometres from an internment camp holding thousands of ethnic Uighurs. This was just a week after a United Nations committee had denounced the mass detentions and urged China to stop. McKinsey also consulted for China Communications Construction, which has built militarized islands in the South China Sea in violation of international law.
Of course, there are ties with the Russian bank. In August 2018, the VEB bank, which is owned by the Russian state and known to be intertwined with Russian intelligence and under United States sanctions, hired McKinsey to develop its business strategy.
Once again, a government, the Canadian government in particular, where we have such high ethical and moral standards across our country with our citizens, should not be doing business with a consulting firm with such low ethical standards. We need to call in the auditors.
Finally, it is not producing good value for money. It has been reported that McKinsey has, in fact, increased its contracts by up to 193% over market value. With this government alone, we saw that 20 out of 23 contracts were not placed in competitive bid environments. Many of them were sole-sourced, in fact. That is 20 out of 23, which once again makes us question the influence. We have seen the bad use of money, as in the example coming out of the Business Development Bank of Canada, where we saw lavish events and chauffeurs being flown to the other side of the country. We see public servants who are completely demoralized as a result of not being consulted on these projects and all of the authority being handed over to McKinsey.
I think we need to simply look at everything. The evidence shows that we should not trust the government to audit itself. We do not know how much it has spent or how it has made its major policy decisions, with a lack of transparency and accountability, working with a company that has no strong ethical values or moral standards and not producing good value for money. What do we need to do? We need to call in the auditors.
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