McKinsey’s Canada Boss Says Politics Played No Role in Landing Contracts

A sign of U.S.-based McKinsey & Company management consulting firm in Geneva on April 12, 2022. (Fabrice Coffrini/AFP via Getty Images)

The managing partner for McKinsey & Company’s Canadian operations told MPs politics played no role in his consulting firm obtaining an increasing number of contracts since the Liberals took power in 2015.

“McKinsey contracts were awarded based on merit based criteria used by the public service, not as a result of any relationship at any political level,” Robert Palter told the House of Commons government operations committee on March 29.

Palter also said McKinsey’s piece of the pie in federal government consulting services contracts is quite small and said the firm only wins 40 percent of what it bids on based on its record-keeping.

“I think our relationship with the federal government, first of all complies with policies and procedures. Second of all, I think the federal government is getting value,” he said.

Palter wouldn’t comment on the firm’s revenues in Canada but said contracts with the public sector amount roughly between 5 to 7 percent of its operations in Canada.

MsKinsey has been involved in digitizing operations in departments, but also in helping to change the culture.

While testifying before the committee on March 20, Department of National Defence officials said McKinsey diversity and inclusion experts were hired to run focus groups and town halls with employees.

Conservative MPs asked Minister of Defence Anita Anand whether McKinsey should be helping to overhaul the culture in the military given their track record of scandals and work with Russian and Chinese state-owned entities involved in defence activities.

The issue of McKinsey’s international dealings was brought up again during the March 27 meeting.

Palter defended his firm as being committed to meeting the highest ethical standards, and said lessons were learned from past mistakes.

“Like any large organization, we are not perfect,” he said. “Over the last several years our firm has made significant changes to our professional standards, client service policies, and risk management.”

Palter also told the committee that McKinsey will refuse to work with some clients, explaining that every potential client needs to pass through a five-layer screen.

“If a client doesn’t pass through all five screens, we won’t take on the work,” he said.

So far nothing overly controversial about the McKinsey contracts has surfaced during the committee meetings.

Former McKinsey boss and former Canadian ambassador to China Dominic Barton denied being a friend of Prime Minister Justin Trudeau, though he revealed attending Deputy Prime Minister Chrystia Freeland’s residence for dinner.

But audits conducted by the departments have recently surfaced irregularities, according to a Treasury Board Secretariat March 24 statement.

After the news broke about the increase of contracts awarded to McKinsey since the Liberals took power in 2015, Prime Minister Justin Trudeau tasked Treasury Board President Mona Fortier and Minister of Public Services and Procurement Helena Jaczek to conduct a review.

TBS says the preliminary audits from the departments reveal “no evidence of political interference” and “broad compliance with values and ethics commitments.”

However, the department noted there are “indications that certain administrative requirements and procedures were not consistently followed.”

TBS did not provide further details but said its report on the matter will be produced by June 30.

Commenting on the TBS statement, Palter said it was “not clear who was or was not following the rules.”

Along with the internal audits, the auditor general and the procurement ombudsmen are also reviewing McKinsey contracts, valued at over $100 million since 2015.