Canada's privatised shadow civil service
PJ OâRourke once quipped that âThe Republicans are the party that says government doesnât work and then they get elected and prove it.â But conservative parties have unlikely allies in the project to discredit public service: neoliberal âcentristâ parties, like Canadaâs Liberal Party.
If youâd like an essay-formatted version of this post to read or share, hereâs a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
https://pluralistic.net/2023/01/31/mckinsey-and-canada/#comment-dit-beltway-bandits-en-canadien
The Liberals have become embroiled in a series of scandals over the explosion of lucrative, secretive private contracts awarded to high-flying consultancy firms who charge hundreds of times more than public sector employees to do laughably bad work.
Front and centre in the scandal, is, of course, McKinsey, consligieri to opioid barons, murdering Saudi princes, and other unsavoury types. McKinsey was brought in to âconsultâ on strategy for the Business Development Bank of Canada (BDC), a Crown corporation that gives loans to Canadian businesses.
https://www.cbc.ca/news/politics/business-development-bank-canada-hudon-mckinsey-1.6720914
While there, McKinsey performed as per usual, veering from the farcical to the grotesquely wasteful. Most visible was the decision to spend $320,000 on a livecast fireside chat between BDC president Isabelle Hudon and a former Muchmusic VJ that was transmitted to all BDC employees, which featured Hudon and the host discussing a shopping trip theyâd taken together in Paris.
Meanwhile, BDC has been hemorrhaging top people, which leaving the organisation with many holes in its leadershipâââthe kind of thing that would pose an impediment to its lofty goals of substantially increasing the support it gives to businesses run by women, First Nations people and people of color.
Hudonâââa Trudeau appointeeâââvowed to âstart from scratchâ when she took over the organisation, but then went ahead and did what her predecessors had done: hired outside consultants who billed outrageous sums to repurpose anodyne slide-decks full of useless, generic advice, or unrealistic advice that no one could turn into actual policy. They also sucked up BDC employeesâ time with endless interviews.
The BDC has (reluctantly) disclosed $4.9m in contracts to McKinsey. The CBC also learned that Hudon parachuted several cronies from her previous job at Sun Life into top roles in the organisation, and that BDC had reneged on promised promotions for many long-term staffers. Hudon also repeatedly flew a chauffeur across the country from Montreal to BC to drive her around.
In Quebec, premier François Legault hired an army of McKinsey consultants at $35,000 per day to advise him on covid strategy, for a total bill of $8.6m. McKinseyâs contract with the province stipulated that they wouldnât have to disclose their other clients, even in the event that they had conflicts of interest:
https://www.cbc.ca/news/canada/montreal/caq-legault-mckinsey-pandemic-consulting-1.6602374
The contract was kept secret, as was the long-running, $38m contract between McKinsey and the Hydro Quebec power authority:
https://ici.radio-canada.ca/nouvelle/1927738/mckinsey-hydro-quebec-consultants-barrages-affaires
Most of the bad press McKinsey gets revolves around the evil advice it givesâââlike when it advised opioid companies to pay cash bonuses to pharma distributors for every death-by-overdose in their territory (no, Iâm not making this up):
https://pluralistic.net/2022/06/30/mckinsey-mafia/#everybody-must-get-stoned
But these rare moments of competence should be understood in the broader context in which McKinsey isnât evil, they are merely utterly, totally fucking useless. The 2022 French Senate report on McKinsey really digs into this:
http://www.senat.fr/commission/enquete/2021_influence_des_cabinets_de_conseil_prives.html
They find that a quarter of the work McKinsey turned in was âunacceptable or barely acceptable in quality.â This is in line with the overall tenor of work performed by consultants. For example, when it came to giant Capgemini, the French Senate found that the work it provided was âof near-zero added value, indeed sometimes counterproductive.â
And yet, despite the expense and ânear-zero added value,â hiring outside consultants is a reflex for neoliberal centrist leaders. Trudeau has presided over a massive expansion of the Canadian governmentâs reliance on outside consultants:
https://www.theglobeandmail.com/politics/article-liberals-spend-billions-more-on-outsourced-contracts-since-taking/
After campaigning on a promise to reduce outside consultancy, the Trudeau administration increased consultant spending by 40%, to $11.8 billion. This shadow civil service is not just more expensive and less competent that the real civil serviceâââit is also far more opaque, able to fend off open records requests with vague gestures towards âtrade secrecy.â
Since 2015, McKinsey has raked in $101.4m in federal contracts, even as the civil service has been starved of pay. Meanwhile, federal departments insist that they need to âprotect Canadaâs economic interestsâ by not disclosing outside contracts, and list their total spend at $0.00.
https://nationalpost.com/news/outsourcing-contracts-mckinsey-billions
The Professional Institute of the Public Service of Canada estimates that between 2011â21, the Canadian government squandered $18b on outside IT contracting that could have been performed by public servants. In 2022, the Government of Canada spent $2.3b on outsource IT contracts, while the wage bill for its own IT staff came in at $1.85b.
Itâs not like these outside IT contractors are good at their jobs, either. The most notorious example is the ArriveCAN covid-tracking app for travellers, the contract for which was awarded to GCstrategies, a two-person shop in Ottawa, who promptly turned around and outsourced it to KPMG and other contractors, whom they billed to the government at $1,000â1,500/day, raking off 15â30% in commissions.
For months, the origins of the ArriveCAN app were a mystery, with the government insisting that the details of the contractors involved were âconfidential.â But ArriveCAN was such a steaming pile of shit, and so many travellers (a population more likely to be well-off and politically connected than the median Canadian) had to deal with it, that eventually the truth came out.
The ArriveCAN scandal is ongoingâââjust last year, it cost the Canadian public $54m:
https://www.theglobeandmail.com/politics/article-arrivecan-subcontractors-multinationals/
Trudeauâs Liberals didnât invent outsourcing high-stakes IT projects to incompetent grifters. Under Conservative PM Stephen Harper, Canada paid IBM to build Phoenix, an utterly defective payroll system for federal employees that stole millions from civil servants, bringing government to a virtual standstill. Thus far, the Government of Canadaâââwhich paid IBM $309m to develop Phoenix, as a âcost savings measureââââhas paid $506m in damages to make good on Phoenixâs errors:
https://www.theglobeandmail.com/politics/article-ottawa-paid-out-400-million-in-phoenix-pay-compensation-to-federal/
The Liberals didnât invent Phoenixâââbut they did deploy it, after campaigning on the wastefulness and incompetence of the Toriesâ outsourcing bonanza. And after Phoenix crashed and burned, the Liberals increased outsourcing spending.
All of this is well-crystallized in last weekâs Canadaland discussion between Jesse Brown and Nora Loreto:
https://www.canadaland.com/podcast/853-the-indulgent-consultant/
And on his Substack, Paul Wells proposes that the Senateâââa largely ornamental institution in Canadian politicsâââis the unlikely check of last resort on the Liberalsâ fetish for outsourcing:
There are former deputy ministers at the federal and provincial levels, secretaries to cabinet, a former Clerk of the Privy Council, a former chief of staff to a prime minister. A lot of them can remember the days when big decisions werenât farmed out to firms that make their founders rich and are spared the rigours of accountability for their counsel. Surely some of them would like to shine a light?
https://paulwells.substack.com/p/shine-a-brighter-light-on-contract?
Image: Sam (modified) https://commons.wikimedia.org/wiki/File:The_Canadian_House_of_Commons.jpg
Presidencia de la RepĂşblica Mexicana (modified) https://commons.wikimedia.org/wiki/File:Justin_Trudeau_June_2016.jpg
CC BY 2.0 https://creativecommons.org/licenses/by/2.0/deed.en
[Image ID: The legislative chamber of Canada's House of Commons; behind the speaker's chair, the back wall has been replaced by an enormous $100 bill. The portrait on the $100 bill has been replaced with an unflattering, braying picture of Justin Trudeau. The Bank of Canada legend across the top of the note has been replaced by the McKinsey and Company wordmark.]
