Public Accounts

The House of Commons Standing Committee on Public Accounts met to examine Report 5 of the Auditor General of Canada, “Professional Services Contracts,” focusing on contracts with McKinsey & Company. Witnesses included Harpreet S. Kochhar (Deputy Minister, Immigration, Refugees and Citizenship Canada), Christian Settano (Chief Financial Officer, Business Development Bank of Canada), Maya Walker (General Manager, Sourcing Management, Canada Post Corporation), Jason Choueiri (Senior Assistant Deputy Minister and Chief Digital Officer, IRCC), Andrew Hayes (Deputy Auditor General), and Nathalie Séguin (General Manager, Finance Business Partner, Canada Post Corporation).

Harpreet S. Kochhar stated that IRCC’s two McKinsey contracts—worth $2.9 million and $24.8 million—were competitively awarded to support digital transformation and were found compliant with Treasury Board rules, with no integrity or value-for-money concerns specific to IRCC. He acknowledged two administrative issues: incomplete documentation of a contracting decision and five consultants receiving temporary network access before final security clearance, which IRCC has since addressed by requiring written justifications for all procurement decisions and documented security clearance before access. He emphasized that McKinsey had no role in immigration policy decisions, such as the immigration levels plan or Roxham Road, and that IRCC is reducing consultant reliance from 351 to about 50 by 2028, having already cut 127 consultants.

Christian Settano explained that BDC awarded two McKinsey contracts: one competitive contract to validate a post-pandemic corporate strategy and a second sole-source contract to adjust go-to-market strategies, both following BDC’s procurement policies. He noted that the Auditor General recommended better documentation of the selection committee’s decision, which BDC has since implemented, and that the second contract was not fully spent ($2.1 million of $2.9 million). He highlighted that the new strategy has helped BDC grow its client base by 49% to 107,000 entrepreneurs and that BDC remains profitable, paying over $1.4 billion in dividends to the government since 2021.

Maya Walker stated that Canada Post has enhanced its procurement policies and training for consulting services, including a new process aligned with Treasury Board guidelines, and strengthened conflict of interest declarations in its systems. She noted that Canada Post’s consulting spend is less than 1% of its $7 billion operating expenses and that the corporation has submitted a transformation plan to the government to address its financial losses, which the Auditor General linked partly to delays in approving corporate plans. She disagreed with the suggestion that McKinsey’s work directly caused Canada Post’s deficit, instead attributing it to long-term declines in letter mail and increased competition in parcel delivery.

Jason Choueiri added that IRCC’s digital platform modernization has hired over 300 new employees, half from within the department, and that the department now requires detailed rationale logs for all procurement processes. He noted that the GeoMatch pilot project, developed in-house with Stanford University, is a small-scale test to match economic immigrants with regions, and that IRCC has not defined rural, remote, or urban regions for this purpose.

Andrew Hayes emphasized that the Auditor General’s key concern across all entities was the need for thorough documentation of procurement decisions, particularly when contracts are non-competitive or when bidders raise concerns about perceived unfairness. He noted that Canada Post’s financial challenges have been exacerbated by the lack of approved corporate plans, and that BDC should quantify savings when choosing to stay with a contractor rather than re-competing.

The committee also heard questions about Canada Post’s financial losses and its relationship with Purolator, with Walker and Séguin stating that Purolator is managed independently despite Canada Post’s 91% ownership. No procedural debate, motions, or votes occurred during the meeting.