The consulting firm McKinsey & Company has seen the amount of money it earns from federal contracts explode since Prime Minister Justin Trudeau came to power — to the point where some suggest it may have a central role in shaping Canada’s immigration policies.
A Radio-Canada investigation also learned the private consulting firm’s influence is raising concerns within the federal public service.
According to public accounts data from Public Services and Procurement Canada (PSPC), the Liberals spent 30 times more money on McKinsey’s services than Stephen Harper’s Conservatives did.
In the nine years of the Harper government, McKinsey was awarded $2.2 million in federal contracts. During Trudeau’s seven years in office, the company has received $66 million from the federal government.
McKinsey, an American firm with 30,000 consultants in 130 offices in 65 countries, provides advice to both private and public entities — which sometimes have conflicting interests — and does not disclose its business ties.
For example, Export Development Canada has paid McKinsey $7.3 million to provide various analyses since last year. The Business Development Bank of Canada paid the company $8.8 million for advice in 2021 and 2022.
Major role in immigration department
Radio-Canada’s analysis shows that Immigration, Refugees and Citizenship Canada (IRCC) has turned to McKinsey the most since 2015, with $24.5 million in contracts for management advice.
IRCC and the Canada Border Services Agency account for 44 per cent of federal compensation issued to the firm.
McKinsey refused to answer Radio-Canada questions regarding its role and agreements with the federal government. The government did not provide copies of the firm’s reports in response to Radio-Canada’s request.
McKinsey’s influence over Canadian immigration policy has grown in recent years without the public’s knowledge, according to two sources within IRCC. Both spoke on the condition of anonymity because they were not authorized to speak publicly.
Immigration, Refugees and Citizenship Canada has been McKinsey and Co.’s best customer within the federal government since 2015. (Ivanoh Demers/CBC)
Both held major roles within the department during the height of the consulting firm’s influence and spoke to Radio-Canada separately.
“It was completely opaque. We asked to collaborate, to share our ideas, but it didn’t work,” said one source with an important position within IRCC.
“McKinsey was an idea from the government. The policy was decided for civil servants. It causes a lot of operational instability,” said the second source.
“These people, these firms forget the public interest, they’re not interested in it. They’re not accountable.”
According to contracts, McKinsey was hired by IRCC to develop and implement various strategies for “transformation.”
An IRCC spokesperson said the consulting firm was tasked with reviewing, developing and implementing digital tools, processes and services.
The department spokesperson said the contract was revised during the pandemic — at an increased cost — to help IRCC respond to pressures related to the pandemic, deal with acute demand and maintain essential services for clients.
A mandate for ‘transformation’
Representatives of McKinsey facilitated or attended about 10 meetings of the IRCC transformation committee, according to documents obtained under access to information law. The documents do not include details of those presentations.
“We had a few presentations on very generic, completely vapid stuff. They arrived with nice colours, nice presentations and said they would revolutionize everything,” one of the sources said.
“In the end, we don’t have any idea what they did,” the source added, referring to “nice marketing” that “isn’t science.”
Before a federal committee hearing in late November, IRCC Deputy Minister Christiane Fox said McKinsey was involved in the transformation and modernization of the department’s systems.
“According to managers and politicians, everything that comes from outside is always better, even if we had enough resources internally,” said one department source.
“[McKinsey] always says they have great expertise, but it doesn’t make sense because we have expertise and we’re completely pushed aside,” said the other.
McKinsey head recommended immigration boost
The IRCC sources are also critical of McKinsey’s possible influence over Canada’s immigration targets.
Ottawa announced a plan this fall to welcome 500,000 new permanent residents each year by 2025, with an emphasis on fostering economic growth.
Then-Finance Minister Bill Morneau (right) looks on as Dominic Barton, chair of the Advisory Council on Economic Growth, speaks at a news conference in 2016. Morneau formed the council during his time as finance minister. (Adrian Wyld/Canadian Press)
The advisory council recommended a gradual increase in permanent immigration to 450,000 people per year to respond to labour market dynamics. At the time, Canada was accepting about 320,000 permanent residents.
John McCallum, the immigration minister at the time, expressed his reservations about the “huge figure” presented in the report.
But one of the sources at IRCC said the department was quickly told that the advisory council’s report was a foundational plan.
‘Telling truth to power’
While Dominic Barton chaired the advisory council from 2016 to 2019, he left McKinsey in July 2018 after a 30-year career with the firm. The next month, the consulting firm started its first contract with IRCC.
Trudeau named Barton Canada’s ambassador to China in 2019 — a post he held for two years before leaving and joining the mining firm Rio Tinto.
“I’m very proud of my career and time in the private sector,” Barton said. “We’re known for telling truth to power.”
Barton is also a co-founder of The Century Initiative, an advocacy group calling for policies that would bring Canada’s population to 100 million by 2100.
Dominic Barton was Canada’s ambassador to China from 2019 to 2021 after 30 years at McKinsey. (Paul Chiasson/Canadian Press)
The group was founded in 2011, while Barton was still at McKinsey, and has an current executive from the firm on its board of executives.
The Century Initiative has been listed on Canada’s lobbyist registry since 2021. It has organized meetings with the immigration minister’s office, the minister’s parliamentary secretary and Conservative and NDP MPs.
Radio-Canada’s questions to Barton about the increase in McKinsey’s contracts have not been answered.
Single-source contracts
Departments other than IRCC also have turned to McKinsey.
Public Services and Procurement Canada used the company for computer services. Innovation, Science and Economic Development Canada hired it for management advice, as well as science and research services.
The Department of National Defence also paid McKinsey several million dollars for leadership development.
Some of these contracts are still in progress and their total cost isn’t known yet.
According to Radio-Canada’s research, PSPC has called upon McKinsey on behalf of various federal entities for 18 contracts since 2021 — contracts worth more than $45 million.
All of those contracts were sole-source, according to documents obtained by Radio-Canada.
The Prime Minister’s Office referred questions to the Treasury Board Secretariat (TBS). In a statement, the TBS said external professional services bring in specific expertise and help to address fluctuations in the civil service workload.
According to TBS spokesperson Martin Potvin, such a contract could help fill shortages in certain work groups or geographic locations.
He said the decision to resort to outside firms rests with individual departments.
‘Shadow government’
Benoit Duguay, a professor at the Université de Québec à Montreal’s School of Management Services, said he’s surprised by McKinsey’s apparent influence.
“How come McKInsey has the skills to do absolutely everything a government does? … It looks like another level of government. Almost a supranational government,” Duguay said in French.
(Duguay is a former consultant himself, though not at McKinsey.)
Isabelle Fortier, professor at the École nationale d’administration publique in Quebec, said the use of firms like McKinsey suggests a break between politics and administration of the state.
She said it supplants the internal expertise of the civil service and operates as a “shadow government” without transparency or legitimacy.
The federal government said it employs consulting firms to provide high-quality services and ensure the best possible value for taxpayers. It said departments are required to award contracts in a fair, open and transparent manner.
Controversy and calls for accountability
McKinsey has advised many national governments on their COVID-19 pandemic response in recent years, including those in the U.S., U.K., Germany and Mexico.
The governments of Quebec and Ontario also hired McKinsey to advise them on their pandemic responses and plan for the economic recovery.
McKinsey and Co. was hired to provide advice to the governments of Ontario, Quebec and several countries on pandemic response and recovery. (AFP via Getty Images)
An investigation by the French Senate accused consulting firms like McKinsey of undermining national sovereignty and making the state dependent on them.
McKinsey also has been under investigation in France over tax filings, the awarding of contracts and its role in President Emmanuel Macron’s 2017 and 2022 election campaigns.
In Canada, some experts are also calling for an inquiry.
Ontario lawyer Lou Janssen Dangzalan, who has been studying IRCC’s digital reforms, said an inquiry could provide transparency on how consulting companies handle government contracts.
Fortier, who studied McKinsey’s record in France, said she supports a public inquiry into the use of consulting firms.
“We must force the black boxes to open,” she said in French.
CHARLESTON, W.Va. (AP) — A linebacker at Division II West Virginia State was fatally shot during what the university said Thursday is being investigated by police as a home invasion.
The body of Jyilek Zyiare Harrington, 21, of Charlotte, North Carolina, was found inside an apartment Wednesday night in Charleston, police Lt. Tony Hazelett said in a statement.
Hazelett said several gunshots were fired during a disturbance in a hallway and inside the apartment. The statement said Harrington had multiple gunshot wounds and was pronounced dead at the scene. Police said they had no information on a possible suspect.
West Virginia State said counselors were available to students and faculty on campus.
“Our thoughts and prayers are with Jyilek’s family as they mourn the loss of this incredible young man,” West Virginia State President Ericke S. Cage said in a letter to students and faculty.
Harrington, a senior, had eight total tackles, including a sack, in a 27-24 win at Barton College last week.
“Jyilek truly embodied what it means to be a student-athlete and was a leader not only on campus but in the community,” West Virginia State Vice President of Intercollegiate Athletics Nate Burton said. “Jyilek was a young man that, during Christmas, would create a GoFundMe to help less fortunate families.”
Burton said donations to a fund established by the athletic department in Harrington’s memory will be distributed to an organization in Charlotte to continue his charity work.
West Virginia State’s home opener against Carson-Newman, originally scheduled for Thursday night, has been rescheduled to Friday, and a private vigil involving both teams was set for Thursday night. Harrington previously attended Carson-Newman, where he made seven tackles in six games last season. He began his college career at Division II Erskine College.
“Carson-Newman joins West Virginia State in mourning the untimely passing of former student-athlete Jyilek Harrington,” Carson-Newman Vice President of Athletics Matt Pope said in a statement. “The Harrington family and the Yellow Jackets’ campus community is in our prayers. News like this is sad to hear anytime, but today it feels worse with two teams who knew him coming together to play.”
DETROIT (AP) — Joe Schmidt, the Hall of Fame linebacker who helped the Detroit Lions win NFL championships in 1953 and 1957 and later coached the team, has died. He was 92.
The Lions said family informed the team Schmidt died Wednesday. A cause of death was not provided.
One of pro football’s first great middle linebackers, Schmidt played his entire NFL career with the Lions from 1953-65. An eight-time All-Pro, he was enshrined into the Pro Football Hall of Fame in 1973 and the college football version in 2000.
“Joe likes to say that at one point in his career, he was 6-3, but he had tackled so many fullbacks that it drove his neck into his shoulders and now he is 6-foot,” said the late Lions owner William Clay Ford, Schmidt’s presenter at his Hall of Fame induction in 1973. “At any rate, he was listed at 6-feet and as I say was marginal for that position. There are, however, qualities that certainly scouts or anybody who is drafting a ballplayer cannot measure.”
Born in Pittsburgh, Schmidt played college football in his hometown at Pitt, beginning his stint there as a fullback and guard before coach Len Casanova switched him to linebacker.
“Pitt provided me with the opportunity to do what I’ve wanted to do, and further myself through my athletic abilities,” Schmidt said. “Everything I have stemmed from that opportunity.”
Schmidt dealt with injuries throughout his college career and was drafted by the Lions in the seventh round in 1953. As defenses evolved in that era, Schmidt’s speed, savvy and tackling ability made him a valuable part of some of the franchise’s greatest teams.
Schmidt was elected to the Pro Bowl 10 straight years from 1955-64, and after his arrival, the Lions won the last two of their three NFL titles in the 1950s.
In a 1957 playoff game at San Francisco, the Lions trailed 27-7 in the third quarter before rallying to win 31-27. That was the NFL’s largest comeback in postseason history until Buffalo rallied from a 32-point deficit to beat Houston in 1993.
“We just decided to go after them, blitz them almost every down,” Schmidt recalled. “We had nothing to lose. When you’re up against it, you let both barrels fly.”
Schmidt became an assistant coach after wrapping up his career as a player. He was Detroit’s head coach from 1967-72, going 43-35-7.
Schmidt was part of the NFL’s All-Time Team revealed in 2019 to celebrate the league’s centennial season. Of course, he’d gone into the Hall of Fame 46 years earlier.
Not bad for an undersized seventh-round draft pick.
“It was a dream of mine to play football,” Schmidt told the Detroit Free Press in 2017. “I had so many people tell me that I was too small. That I couldn’t play. I had so many negative people say negative things about me … that it makes you feel good inside. I said, ‘OK, I’ll prove it to you.’”
VICTORIA – British Columbia’s Environment Assessment Office has fined Coastal GasLink Pipeline Ltd. $590,000 for “deficiencies” in the construction of its pipeline crossing the province.
The office says in a statement that 10 administrative penalties have been levied against the company for non-compliance with requirements of its environmental assessment certificate.
It says the fines come after problems with erosion and sediment control measures were identified by enforcement officers along the pipeline route across northern B.C. in April and May 2023.
The office says that the latest financial penalties reflect its escalation of enforcement due to repeated non-compliance of its requirements.
Four previous penalties have been issued for failing to control erosion and sediment valued at almost $800,000, while a fifth fine of $6,000 was handed out for providing false or misleading information.
The office says it prioritized its inspections along the 670-kilometre route by air and ground as a result of the continued concerns, leading to 59 warnings and 13 stop-work orders along the pipeline that has now been completed.
This report by The Canadian Press was first published Sept. 12, 2024.
