Good afternoon, everyone. I call the meeting to order.
Welcome to meeting number 53 of the House of Commons Standing Committee on Government Operations and Estimates.
Pursuant to the motion adopted by the committee on Wednesday, January 18, 2022, the committee is meeting on the study of the federal government consulting contracts awarded to McKinsey & Company.
I'm informing the committee that all witnesses appearing by video conference have completed the required connection tests in advance of the meeting.
Quickly, at the very end, before we start the subcommittee, there are a couple of items I have to go over that I need feedback on from the committee. I just need a couple of minutes then, please, and then we'll go on to the subcommittee.
We'll start by welcoming Minister Fraser.
Welcome to OGGO. I've been here seven years and we haven't seen you before, so welcome to your inaugural appearance with OGGO.
I understand you have an opening statement. Go ahead, for five minutes, please. The floor is yours, Minister.
Perhaps in over seven years, the reason why you've not seen me is that I've only been in this position for a small fraction of that time. I'm happy to make my inaugural appearance.
Thank you, Chair and esteemed colleagues, for the invitation to join today's discussion about IRCC's work with McKinsey & Company.
Folks, I think everybody in this room is familiar with some of the challenges Canadian businesses are facing as they seek to recover from the COVID-19 pandemic. We could pore over the labour force survey statistics to figure out the extent of the labour shortage in Canada if we wanted to, but my view is that you can figure out the reality by walking down the main street of almost any community in Canada. You're going to find “help wanted” signs in the windows.
A lot of this is happening at a time when immigration already represents an extraordinary majority of our growth in the Canadian labour force. We need to continue to train our domestic workforce, there's no question, but it's not possible to meet the needs of the economy in the short or long term without embracing immigration as a key part of our strategy for growth. The fact of the matter is that we need more workers in just about every sector in every region of this country.
In November this past year, I announced that Canada is going to be increasing our annual immigration levels targets from 431,000 this past year to 465,000 this year and going to 500,000 by 2025.
These targets are supported by a plan that will capitalize on new tools to meet the needs of the Canadian economy while making it easier to settle newcomers in the communities with the greatest absorption capacity.
It's not unusual that a department might seek external advice on how to face certain challenges with its various departments or to achieve ambitious goals. However, to be clear, the advice we may have received over the course of a couple of contracts with McKinsey prior to my appointment to this position didn't touch on immigration policy, but rather efforts to digitize the process through which applications are processed at IRCC.
For what it's worth and for the sake of clarity, since being appointed as minister—or before, for that matter—I haven't had a relationship with representatives of McKinsey or Dominic Barton, if anybody was curious. The company did not advise me directly or influence the decision-making around our immigration levels plan. I know that has been the source of some commentary, but I would suggest it's without basis.
The decision made on immigration levels, the number of newcomers we welcome to Canada and how we envision the future of our country's population ultimately falls to me to determine in my capacity as the Minister of Immigration, Refugees and Citizenship. Although this is a decision I've arrived at independently, I take advice from a number of different groups, whether that's department officials or, I would argue most importantly, organizations, stakeholders, provincial and territorial governments, businesses and people across Canada who understand the needs of Canada over the course of the next generation and how immigration may play a key role in determining our country's future. It was on the basis of those conversations and my independent reflection that we landed on appropriate levels for immigration as published in the immigration levels plan.
McKinsey was engaged—as I mentioned, before I was appointed as minister—on two instances through an open bidding process that was run by the department under its authority to do so. Those particular contracts were designed to provide advice around the modernization of the immigration system and to enhance digital services, which are rolling out as we speak, although I would suggest there are greater benefits to be seen in the years ahead as we move to a fully digitized system.
Over the course of the past few years, even pre-dating the pandemic, an unprecedented number of people have been choosing to come to Canada.
On the one hand, that's great for our country, but on the other hand, there's no doubt that IRCC's aging systems and processes simply couldn't keep up with the increased demand.
Like all departments and agencies, IRCC relies on different partnerships to improve the way we serve clients. Sometimes we have to rely on third parties to provide specialized expertise for specific and typically time-limited purposes.
That's why, in 2018, the department determined it needed specific expertise to review how it serves clients and to recommend improvements. This resulted in two contracts between 2018 and 2020 being awarded to McKinsey. It represented in those particular years, for what it's worth, less than 1% of the department's operating expenditures.
The first contract provided an assessment and a set of recommendations to improve digital and other services and to begin the digital transformation process, which is ongoing today.
While the department moved ahead to implement some of those recommendations, it established the second contract, again, on a competitive basis. This was to grow its internal capacity, help IRCC employees gain specialized expertise themselves and accelerate the department's ability to carry on with the work to transform the digital system that we're moving towards, with a focus on improving client service.
The work carried out as part of these contracts identified gaps and opportunities to improve service delivery. It also led to the development of a transformation strategy, complete with a step-by-step plan, and two new operating models: one to deliver more efficient processes and another to deliver digital solutions for IRCC's clients.
Folks, I expect I'm getting close to the end of my five minutes, so perhaps I'll end my comments there.
Thank you, Minister, for being here today.
Minister, in an article published by the CBC on January 4, 2023, two public servants in your department came forward about the role McKinsey had been playing in policy decisions of the department. One source told the media that “McKinsey was an idea from the government. The policy was decided for civil servants. It causes a lot of operational instability”.
Why is your government and why are you, as minister, allowing a firm such as McKinsey to make policy decisions instead of public servants?
Welcome to the minister and the officials.
Minister, thank you very much for all the work you're doing in helping us navigate through some challenging times.
Minister, I'm going to ask questions, many of which you've already addressed in your opening remarks, but consider this an opportunity to expand, to clarify and to solidify your responses for the record one more time.
Minister, why, in your opinion, was McKinsey hired prior to your assuming this role? What role was it playing for the department?
I would like to get your input on another thought. As an MP who has a lot of immigration cases coming to his office—and I have been there for seven years—I have seen the challenges that we've had. The levels have increased. The complexity of the cases has increased, and the demand has increased.
Is it possible...? I'm trying to put the previous minister of immigration, although it goes way back, into perspective. Had we not done anything, had we not changed our processes, had we not moved on to the digital transformation that your department, your ministry, is embarking on, would we be in a position to be able to accept the number of immigrants that we are accepting in order to deal with the shortages we are having?
Look, we live in a very different world from when we first were elected in 2015, Mr. Jowhari. The reality is that, with the volume of work we're doing at IRCC, not just in our immigration levels plan, which processes permanent residents, but also with the significant expansion of the international student program and the increased reliance on people here with a temporary status to work—and, frankly, the fact that Canada has become a major destination for visitors around the world—there's no way we would be able to meet the demands of the system.
In particular, there's a major thing that has happened between then and now. The COVID-19 pandemic had a severe impact on the immigration system. It doesn't take a rocket scientist to figure out that when you close a border to protect public health against the spread of a virus, you can have an impact on the folks who were involved in bringing people across those borders.
What has happened is that, for a period of time, we had to stop hosting citizenship ceremonies, for example. Part of the work that was informed by McKinsey helped us to evolve the digitization of the citizenship program, and now we're producing record numbers of citizenship grants on a monthly basis.
It's just one example of the kinds of efficiencies we're starting to see now across different immigration streams. If we want to continue to grow our immigration ambition, which I believe is a good thing for Canada, we're going to need to embrace digital technologies as a government that wants to do business in the 21st century.
Minister, I'd like to raise another question with you now.
We met with the procurement ombudsman recently and asked him whether the special auditor function he was given would allow him to identify if the work that the minister or the department outsourced could've been accomplished by our skilled public service, instead.
The ombudsman's response was that his job was to verify whether the duplication of work was done in compliance with the rules, but that there wasn't anyone in the government that could currently verify whether, in your department, the work that was given to McKinsey could've been handled by our public servants.
Are you not bothered by the fact that, to this day, no comprehensive auditing role was attributed?
I'm not making any of this up. The ombudsman told us as much two days ago.
Maybe the easiest thing would be that, if there is such a list, we could receive that list of where McKinsey had engaged in discussions with officials. Could you provide that list and what topics they discussed?
My next question is this. The minister said that there wasn't the capacity or they needed McKinsey to help build capacity within IRCC, yet IRCC staff within the department are on the public record as saying that they offered to work with the government with ideas and forwarded these ideas, and there was zero uptake. IRCC, by the way, is the one department within government that contracts out more work than any other department. That has been confirmed with a PIPSC report.
The other thing that has been noted is that IRCC does not make a reasonable effort to hire before contracting out. As well, IRCC has more grievances than any other department within government. This is on the public record, in a report that's there for everyone to see.
Given the comment that people tried to offer their ideas and suggestions, why were those not received well and taken up?
I'm sorry. I'm going to interrupt you here, Minister. I think you might have misheard me. It wasn't slow to hire. The issue is that the government and the department chose to contract out instead of hiring in-house.
In fact, there's a report here that I'll turn the minister's attention to, the Professional Institute of the Public Service of Canada's “Contracting Out Report”, which actually outlines very clearly the contracting out of IRCC and how it's actually breaching the collective agreement, by the way, in the number of grievances that exist within the system. That's there and on the record.
It has also been reported by CBC that staff within IRCC had offered to work with the department on some of these issues, yet that offer was not taken up.
I think the point here is that there is a systemic problem, I would suggest, within IRCC, then, where the workers are not being valued and we're not utilizing the talent from within. There needs to be an explanation as to why there is this level of contracting out that IRCC has engaged in with McKinsey.
Good afternoon, Minister.
My Conservative colleague again referenced Mr. Dominic Barton, almost as if on cue.
I'd like to read, into the record, an op-ed piece that appeared in the Toronto Star this afternoon, which was penned by the Honourable John Reynolds. He is a former Conservative MP and a former Conservative leader. He is assessing the performance of my colleagues around the table, when it comes to this issue. He writes:
The attacks levied against [Mr. Barton] by the Conservative party I once led are baseless. Barton is not friends with Trudeau. He did not leverage a non-existent friendship for economic benefit to himself or McKinsey. In fact, in the roles noted above, he accepted far less remuneration than he might otherwise have to help our country and our government.
He continues on:
These repeated accusations are not only disingenuous but speak to a more worrisome attack—an attack on infusing more talent into our government and the public sector. If this is the treatment that high-profile business leaders can expect after lending their talents to the public sector, most will simply take a pass. And it's a shame.
I'll continue here, as well:
...the Conservative Party of Canada needs to ditch the cheap politics and bring forward its own ideas about how to improve our country. Until its MPs can take these steps, I question that they will be taken seriously enough by Canadians.... And if Canadians do give them a mandate to govern, who will want to help them?
Minister, you mentioned a very serious subject: the challenge of labour shortages in this country. Can you please speak to that challenge, the urgency of it and why it's an “all hands on deck” approach in terms of the necessity for Canadians to meet that challenge?
Thank you, Mr. Kusmierczyk.
The best immigration policy will be informed by the economic context in which we're currently living. In the jobs report that came out recently, 150,000 jobs were added to the Canadian economy in January. We're now dealing with 126% of the jobs that were lost during the pandemic. These have now been recovered. GDP is well in advance of prepandemic levels. The rate of unemployment is near the all-time low in Canada's recorded history.
At the same time, there are more than 800,000 jobs vacant in the Canadian economy. We need to be investing in training to have the domestic workforce grow. We can't meet the short-term needs of the labour force or the long-term skills gap without recruiting workers from other parts of the world.
We are also dealing with a demographic situation that should alarm all of us. Fifty years ago, there were seven workers for every retiree. There are closer to three today. In my part of the country, it's closer to two. If we don't welcome working-age families into our communities, the conversation we're going to have, a generation from now, won't be about labour shortages. It will be about whether we can afford schools and hospitals. This is a reality I'm dealing with in my own community, as a result of depopulation a few years ago. Thankfully, that trend has reversed and restored some vitality to the community I call home.
We need to continue to increase immigration levels and expand our temporary programs if we're going to meet the needs of the economy and serve the interests of Canadians.
Mr. Chair, please consider that the request was made and then accepted by the department.
Minister, when he appeared before the committee, Dominic Barton very clearly stated that the issue of immigrants' integration and linguistic integration into Quebec society was never part of his considerations on the various committees tasked with setting immigration targets.
Unsurprisingly, in a stunning coincidence, your targets happen to be the same as Dominic Barton's. I, for one, don't believe in coincidence, but you certainly seem to.
We'd asked, through a question on the Order Paper, whether you'd commissioned any studies into the effects of your new targets on the French language in Quebec.
You refused to produce any study into the effects of your immigration targets on the French language. Why is that?
Maybe the minister can have staff table those numbers dating back over the last five years in terms of what the trend is and the dollars spent on contracting out that have gone out correspondingly to date. I think that would be useful.
The other thing, of course, with IT staff is that it includes programmers as well. With my information, programmers were almost 60 times as many contracted out, but there were only two advertisements during this period for regular employees. Again, why isn't the government hiring in-house instead of contracting out? You're talking about $24.8 million for this transformation.
I also want to point that, at the CIMM committee, immigration consultants and lawyers have come up to talk about what disasters the transformation and digital process are in certain areas. They're saying that they can't upload documents, and when they do spend hours doing it, the system crashes.
The minister, I'm sure, is aware of all of this. Is this what we bought with $24.8 million?
Thank you very much, Mr. Chair.
Thank you to our witnesses for joining us today.
Minister Fraser, you indicated that you have been serving as the minister of IRCC since 2021. You've also indicated that you are aware of the McKinsey contracts. It seems that you would have even been briefed on them.
Last Monday, we heard from the procurement ombudsman that there was a contract awarded to McKinsey that had irregularities. I will quote what he stated: “Mandatory criteria were inadequately defined, and were not limited to the essential qualifications.”
When a department purposefully defines criteria in such a way that only one company can fulfill them, do you think that circumvents the open and fair contracting practice that your department is supposed to adhere to?
First, Mr. Housefather, I must thank you for your comment on the quality of my French. Support from my colleagues in the House of Commons is important to me.
On the specific issue of immigration levels, the situation in Quebec is very different from the situation outside of Quebec. We have an accord with the province of Quebec, which grants Quebec the power to select all its economic immigrants, in addition to allowing it to determine its overall immigration levels.
The situation outside Quebec is very different. The federal government sets immigration levels in its annual plan and proposes strategies to protect the demographic weight of francophones.
Last year was the first time in 20 years that a government reached the 4.4% target. I think that we can go even higher. It's essential to promote the French language and culture and protect the demographic weight of francophones.
Perhaps I need to improve the quality of my French, but I understand the importance of protecting the demographic weight of francophones, be it in Quebec or outside Quebec.
However, according to the accord with the Quebec government, it's Quebec's decision to make.
Minister Fraser, let's come back to Dominic Barton.
Dominic Barton had been brought up. We were trying to hear before that somehow Dominic Barton's friendship with somebody.... Even though he came here and said the wasn't among his 50 best friends, he didn't have the Prime Minister's phone number, he never went out to dinner with the Prime Minister and he never socialized with the Prime Minister, somehow this friendship led to these contracts.
You didn't know the year that Dominic Barton left McKinsey. He left McKinsey in early 2018. Both of the contracts with your department happened after that date. Dominic Barton had also disclosed that, when he left McKinsey, he no longer had any financial interest in McKinsey because he had to sell back his partnership interest.
Would you—just as a logical person—consider that it would make sense, if this friendship was so great, that the number of contracts with McKinsey increased drastically after Dominic Barton left McKinsey but didn't really increase very much between 2015 and 2018?
Thank you very much, Chair.
Respectfully, Minister, things just aren't adding up here. We have a public service that is saying that McKinsey is implicated. We have the media saying that McKinsey is implicated in deciding the policy. We have two former ministers, one of them your predecessor, saying that McKinsey was implicated in deciding policy—poor policy at that—for your department.
You're writing it off. You're saying you don't know anything about this. Did no one brief you? Someone must have told you where these numbers came from originally. Guess what: The media and your public service and your predecessor are saying they came from McKinsey.
Whether or not you're aware, or whether or not you're willing to admit it, this is what everyone else is saying. For you to even deny what happened previous to your arrival into this position.... I get it. You've only been there since December 2021. It's easy to say that you don't know. It's the same with your deputy minister, who's only been there since September 2022. It's really easy to say that you take no responsibility for anything that happened before you.
This is the picture you're painting today. It sounds as though you are going against—and it's either ignorance or denial—what the public service, the media and your predecessors are saying. That's not a good enough answer for me. That's not a good enough answer for the official opposition. That's not a good enough answer for, I believe, all of the opposition parties on this side of the table. It's not a good enough answer for Canadians, Minister, that you would say, “I don't know. Everyone is saying this, but I have no idea about it.”
Now, your colleague on the other side of the table is trying to save your bacon, saying, “Forget McKinsey. We're just here to talk about service delivery.” Guess what: You're failing on that as well, with 2.1 million in the backlog. Even if you did create these targets, which everyone in the public service, the media and in the former cabinet is saying, then no matter who created these numbers, you're failing. You're failing not only in the historical background or the corporate knowledge not having been passed on...or trying to deny it, which everyone on this side of the table and those in the public service and the media believe you're doing.
In addition to that, you're also failing in the service delivery. There's no way you can deny that, regardless of the he-said-she-said, or John Reynolds said this, or someone else said that. You can't deny that.
I mean, what do you have to say to Canadians when you are admitting that you have no knowledge about the corporate background of the numbers and how you came to arrive at these numbers? You just show up here and say, “Oh, I don't know,” and then your colleague tries to say, “Oh, well, we're here about service delivery.” But you're failing on that too.
What do you say to Canadians regarding both of those things, Minister?
I appreciate it. I'm working on it.
First, the allegation from your intervention, Ms. Kusie, that I can discern is that unnamed sources in either the public service or the media disagree with my immigration policy writ large. I don't know the nature of the allegation you're making. If the allegation is that they disagree with my immigration levels plan, I have not seen a confirmed source. I don't doubt there are some people who have spoken out because they think differently than I do. If you and I disagree on whether doubling the level of immigration compared to 2015 is a good idea, we should have that debate on the floor of the House of Commons.
With respect to my institutional knowledge of what took place during my time as an MP before I held this particular chair, I agree intensely with our government's immigration strategy. It has benefited my hometown. I am very familiar with the policies that have been implemented from 2015 up until now and continue to support them.
The particular issue that we're digging in on here is about two specific contracts in 2018 and 2020 that were focused on moving toward—
Just on the actual effectiveness of the immigration policies that we've implemented to deal with some very serious challenges facing our immigration system, I'm not going to pretend everything has been perfect, because the shock to our system that came from COVID-19, an outsized response to Ukraine and Afghanistan, and the fact that Canada became the most popular place in the world to come to in order to seek economic opportunities have put real strain on our system. We've advanced policies to put more resources in the system by hiring more than 1,250 people, to relax administrative barriers in a number of different ways and to embrace the adoption of digital technology that will speed the processes up.
The figure that Ms. Kusie raised of 2.1 million cases in the system has actually been dramatically reduced. Since this summer we've been able to reduce the number of cases in our inventory by more than half a million. We are back to the service standard we enjoyed prepandemic for family reunification cases and for federal express-entry cases. We are very close on study permits and work permits for new applications that are being made. We have some work left to do on visitor visas, which we're working very hard to advance as quickly as possible, but there is real and tangible progress that people are feeling in communities.
Does it need to go faster? Yes. Will it go faster in the future? Yes.
We're doing the hard work now and have been doing the hard work over the past year, including by adopting digital processes. There will be bumps along the way, but we're doing everything we can to get families back together more quickly, to get workers into the businesses and to allow more people to visit Canada for important life events.
You know, it can be very frustrating sometimes to not get answers from the minister and, obviously, I made an inappropriate comment about his mastery of the French language.
I want to tell the minister that he speaks French very well. I apologize and ask him to accept my most sincere apologies.
That said, with regard to the motion initiating this study, I'd like to ask whether we've received any responses or refusals from the ministers whom we've invited.
Where are we at with that?
Okay. Thank you, Mr. Chair.
If the Minister of Immigration could exert pressure on the Minister of National Defence to get her to change her mind, it would be appreciated. I'm making an official request here.
Now, I'd like to ask him a brief question.
Minister, I'm not necessarily saying that this happened in Canada, but I'd like to tell you about one of McKinsey's practices. It was mentioned in a report by the French Senate. It's the foot-in-the-door technique. McKinsey did unpaid work for the government, in order to then have easier access to contracts.
I'm not saying that this happened in your department, but, generally, do you believe it's an acceptable practice, be it here or abroad?
Look, this is an important question. We have standards that are put in place that allow companies to qualify as bidders on federal contracts. They are designed to protect against certain kinds of bad actors gaining favour from the federal government.
My understanding is that those processes were followed. I think it's important to not necessarily conflate certain different potential corporate entities or business organizations that operate in different jurisdictions because I really do feel strongly, for reasons that are tied deeply to my community, that we need to be attributing individual responsibility wherever possible for people who run afoul of the rules and also, to the extent that the law has provided a process to punish corporate actors, that we follow those rules.
My understanding is that the rules through the PSPC process were, in fact, followed. Does there need to be work on individual accountability where people run afoul of moral norms? In most instances, yes, but I hesitate, without having the full information of the present circumstances, to place judgment upon what you're asking me to.
You're throwing it back at me, then.
Just excuse me for two seconds. There is the issue that I did mention, at the very beginning of this meeting, that we would have committee business before going in camera and discussing more committee business. I think it might have a different bearing on it.
Let me confer with our clerk.
Colleagues, I do apologize for my lack of education on this issue and the back and forth. I have confirmed with the clerk, and she has confirmed that at the beginning I did state it would be committee business before committee business. Therefore, someone can table-drop a matter-in-hand motion. I do believe it is relevant. You are welcome to challenge this.
I will open it up to the committee to vote on the issue if you wish to challenge the ruling. Because we did state at the very beginning it would be committee business before we went into the subcommittee, that would be it and the challenge wouldn't go to a vote.
Honestly, I don't recall any member in this committee who hasn't worked collaboratively. When we walk out of this room, we greet each other well, we work with each other and we ask each other's opinions. I understand when we are in camera we have to behave a certain way based on whatever our party alliance is, etc.
But let's talk about this thing.
Stephanie, you could stop me and say, “Hey, Majid”, or any of our members could say, “Hey, look, I'm putting this.... What are your thoughts?”
At the end of the day, I guarantee you that we're going to support this. We may have some questions. There may be some amendments, but when we start standardizing a practice of dropping a motion like this, trying to get it in public and not having an opportunity for us to work together, it puts our backs up. We wonder if there is something in there that we have to be careful of. Are we exposing anyone?
Again, all I want to say is that we work well together. Let's work well together.
Chair, I believe you're going to say this is in order, and I'm going to challenge this, as a vice-chair, and we're going to go to a vote. Whatever the result is going to be, it will be.
My ask is this. Please—I'm here and my colleagues are here—work with us to make sure that the motion comes in.... Look at what we have. I don't think any committee has as many studies on the table as we have. I challenge any committee, any committee members of any other committee, to come and say that this group has not worked collaboratively together to make sure they're addressing the issues of the day.
We have five or six studies that we have not finalized, because we want to act collaboratively and we want to address the issues of the day.
I will rest on that. Thank you.
Clearly, I would support this motion when it is voted on.
I do want to point out that I tabled a motion on outsourcing. It was a matter-at-hand motion and it reflected exactly what we talked about. The Conservatives said no, and said that they needed more time. It was just around expanding the outsourcing to include the big six companies. We actually waited all the way until this Monday to vote on my motion, which was a motion that just reflected what we had talked about, which I had shared with everybody and had gotten everybody on board with.
I actually agree with Majid on the practice that we do. Matter at hand is a different story. Clearly, I think we need the documents, and I really appreciate the motion by Mrs. Kusie and her work on this because it's really important. I think, as a practice, what Mr. Jowhari's suggesting is the right thing to do.
Clearly, the government is going to get the idea this is coming. We could put a new date on it, maybe, and get it passed early in the next meeting and then just give them a very short window to get the documents.
This is coming. It looks like it's going to get support and the government's going to get wind of it. Hopefully, they can start getting these documents ready.