Trudeau Is Not a Friend, Says Former McKinsey Boss Barton

Dominic Barton waits to appear as a witness at the Standing Committee on Government Operations and Estimates in Ottawa on Feb. 1, 2023. The committee is looking into consulting contracts awarded to McKinsey and Co. (Adrian Wyld/The Canadian Press)

Dominic Barton, the former head of U.S. consulting firm McKinsey, told MPs on Feb. 1 there is no close relationship between him and Prime Minister Justin Trudeau and that he had no role in landing his firm an increasing amount of contracts since the Liberals took power in 2015.

“I’m not a friend, I have a professional relationship,” Barton said as he testified before the House of Commons government operations committee.

“I respect him, I think he respects me. I don’t have his personal phone number, and I haven’t been in a room alone with him,” he added, noting having met the prime minister a dozen times.

Barton was answering questions from Conservative MP Stephanie Kusie as part of the committee’s work examining the contracts awarded to McKinsey.

Conservatives in recent days have accused Trudeau of giving contracts to his “friends” at the firm.

“His personal friend Dominic Barton, the former director of McKinsey, will be testifying because Conservatives launched an investigation into the more than $100 million of contracts that some public servants have said was for work that was of little or no value,” Conservative Party Leader Pierre Poilievre said on Feb. 1 before the committee meeting.

Barton left the helm of McKinsey in July 2018 and said he liquidated his shares in August 2019 before being appointed as Canada’s ambassador to China from 2019 to 2021.

He said in his opening remarks that he was non-partisan and noted having previously also advised former finance minister Jim Flaherty under the Harper government.

Barton also had a formal top adviser role for the Trudeau government, having chaired the Advisory Council on Economic Growth established by former finance minister Bill Morneau in 2016.

He said he had meetings with Trudeau in the context of that work and that he never discussed offering McKinsey’s services.

“I never had those discussions. Just to put things in perspective, McKinsey is a very large firm, the work that’s going on in Canada is very small, and my objective was not to have anything to do with that work,” he said.

The former boss of McKinsey said the company brought in $10 billion in revenue in 2018.

WEF

Barton said his first meeting with Trudeau after he became prime minister was at the World Economic Forum (WEF) in Davos in 2016, after the Canadian government requested he host a breakfast so Trudeau could meet other international leaders.

He said no contracts emanated from those talks with the leaders for which he couldn’t recall the names.

“They were doing a favour to come, there was not an interest to do contracts, that has nothing to do with that,” he said.

Rather than Trudeau, Barton hinted at being closer to Deputy Prime Minister Chrystia Freeland.

He said he had met her when she was working for the Financial Times and attended dinner at her house along with Ian Shugart, a former clerk of the Privy Council who was appointed senator last September.

Scandals

Along with being asked about the nature of his relationship with Trudeau and other senior officials, Barton was also faced with questions related to controversies that involved McKinsey during his leadership.

Conservative MP Garnett Genuis pressed him on the firm’s work to promote opioids with clients such as Purdue Pharma, for which Purdue reached a settlement with U.S. states in 2021 for US$573 million.

Barton said McKinsey shouldn’t have done that work, which he said was lawful but “obviously fell far short of the standards,” and said he wasn’t aware of it taking place due to the size of the company.

“Are you really telling this committee that on a file that literally dozens of senior partners were working on, that you as the managing partner had no idea about such a prominent and potentially controversial client that the firm had for 15 years?” Genuis asked.

“I’ve explained before there are 3,000 client engagements that are going on at any particular given time ... I don’t know all of them, no, that’s totally normal.”

Liberal MP Anthony Housefather said the Conservatives were trying to focus on McKinsey’s scandals because friendship links between Barton and Trudeau had not been found.

Since Barton appeared before the committee as a private citizen, Housefather said many of the questions directed at him would be better asked to current McKinsey personnel.

Genuis said Housefather was trying to defend the witness and that the issues are not separate.

“The line is that the witness, Mr. Barton, led McKinsey for about a decade and during that time, McKinsey was involved in myriad ethical and moral scandals around the world, which the witness appears to have been largely unaware of on his testimony,” said Genuis.

“At the same time, he was working with the Government of Canada and advising the prime minister on a series of issues that would have had relevance to some of those same clients.”

Scrutiny

The scrutiny on McKinsey came after CBC reported an exponential increase in contracts given to the firm after the Liberals came to power in 2015. The public broadcaster was able to find $66 million in contracts through open records.

Public Service and Procurement Canada, which managed many of those contracts, later said it awarded $104.6 million in contracts to McKinsey over the period, with other departments also on the hook for $12.2 million based on ongoing work to determine exact amounts.

Trudeau said he tasked two ministers to look into the matter of the McKinsey contracts.

“If we need to change the rules, we will do so,” he said on Jan. 11 in reference to the contract awarding process.

At the government operations committee’s first meeting on Jan. 30, experts on contracts in public administration said the problem with government outsourcing was much broader than just McKinsey.

Amanda Clarke, an associate professor of public policy and administration at Carleton University, said the scrutiny afforded to McKinsey was “a bit of a distraction.”

But Clarke admitted not having any non-public information on McKinsey contracts.

She did say that McKinsey saw the highest rate of contract growth between 2017 and 2021, but had no evidence as to why that was.

Sean Boots, a senior policy adviser with the Treasury Board Secretariat, noted the higher amounts awarded to other consulting firms in the 2021–2022 fiscal year.

He said Deloitte received $172 million in contracts, PricewaterhouseCoopers $115 million, and Accenture $94 million.

The NDP has called to enlarge the committee’s probe to other consulting firms. NDP MP Gord Johns presented a motion to that effect to the committee, which will be debated at the next meeting.

Canadian Revenues

The Globe and Mail reported Jan. 31 on a court filing in the United States involving McKinsey that shows 5 to 10 percent of the firm’s revenues in Canada came from the federal government between November 2016 and February 2022.

The filing was made in May 2022 by McKinsey partner Dmitry Krivin in the U.S. District Court for Puerto Rico.

The firm is involved in a controversy there pertaining to its work in restructuring the territory’s debt after it went bankrupt.

The filing also revealed other private sector clients of the firm in Canada, such as Bombardier, TD Bank, and Canadian Tire, which each accounted for 1 to 5 percent of McKinsey’s revenue in the country during the same period.

McKinsey did not respond to a request for comment.

In a previous statement, the firm said that its work does not involve policy development and also highlighted its relatively small share of consulting contracts with the federal government.

“We comply with relevant procurement laws, regulations, and rules in all our work,” it said.