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Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Saturday February 3, 2023

Ottawa contracts comprise up to 10 per cent of McKinsey Canadian revenue

Global management consulting giant McKinsey and Company says its contracts with the federal government make up as much as 10 per cent of its gross revenue in Canada.

The Canadian revenue figures for McKinsey’s Canadian operations, contained in a U.S. court filing, show how integral federal government contracts are to the New York-based firm, which has offices in Toronto, Montreal, Calgary and Vancouver.

McKinsey’s contracts with Ottawa are being investigated by the House of Commons committee on government operations and estimates, because of the company’s ties to the Liberal government and the many international controversies in which it has been involved.

The Globe and Mail has reported that the total value of federal contracts awarded to McKinsey since 2015 is at least $116.8-million, up from a previous estimate of $101.4-million provided by the government earlier this month.

The filing was made in May, as part of a court case in Puerto Rico. The document lists many of McKinsey’s significant clients in different countries.

The court documents also say that private-sector clients – such as Montreal-based Bombardier, Toronto Dominion Bank, Mastercard, the Canada Pension Plan Investment Board, Canadian Tire, Shell PLC and State Street Corporation – each accounted for 1.01 per cent to 5 per cent of McKinsey Canada’s revenue during the same period.

The filing mentions individual United States government departments. For instance, the U.S. Department of Defence is listed as accounting for 20.01 per cent to 25 per cent of the gross revenue for McKinsey’s Washington branch during the period from March 1, 2021 through Feb. 28, 2022.

Alley Adams, head of external relations at McKinsey Canada, said contracts awarded to the firm represent a small share of the Canadian government’s outsourcing compared to other consulting firms. Deloitte, Ernst and Young, KPMG and PricewaterhouseCoopers were paid a combined total of about $338-million in 2020-21 and $354-million in 2021-22, according to a Carleton University analysis.

Jennifer Carr, president of the Professional Institute of the Public Service, told MPs the growth in outsourcing ends up costing taxpayers and is hurting morale among federal workers. (The Globe & Mail)