Justin Trudeau’s Liberal government has outsourced billions of dollars’ worth of contracts, including $100 million to McKinsey. Instead of shoveling money into the private sector, the Liberals could make the novel choice of investing in state capacity.
Canadian prime minister Justin Trudeau during the North American Leaders’ Summit in Mexico City, Mexico, on January 10, 2023. (Alejandro Cegarra / Bloomberg via Getty Images)
You would think that a G7 country of over 38.6 million people with a public service boasting 335,957 employees could manage to govern itself without constantly turning to the corporate consultant class. In Canada’s case, you’d be wrong. CBC-Radio Canada broke the story earlier this month on the government’s Can$100 million in contracts to McKinsey & Company since Justin Trudeau’s Liberal Party came to power in 2015. A parliamentary committee is now looking into the matter.
The committee is calling over a half-dozen cabinet ministers as well as the company’s former global managing director, Dominic Barton, who was Trudeau’s ambassador to China from 2019 to 2021. Barton also cochaired former finance minister Bill Morneau’s Advisory Council on Economic Growth.
Pro-Market Spin Merchants
Beyond the fawning headlines in corporate news pages, McKinsey & Co. is notorious. In When McKinsey Comes to Town, Walt Bogdanich and Michael Forsythe lay out in detail the company’s sketchy history. As Michael Bobelian puts it in his review of the book:
The authors expose the firm’s unsavory work with fossil fuel companies, cigarette-makers, opioid distributors, regulatory agencies and autocratic regimes. . . . Bogdanich and Forsythe pierce through McKinsey’s “culture of secrecy” — a process they describe as “akin to chasing shadows” — to unearth conflicts of interest, corruption, hypocrisy and strategic blunders that read like a prosecutor’s indictment.
With its work for Purdue Pharmaceuticals, the company allegedly played a role in bringing about the opioid epidemic. In 2021, it settled a lawsuit for nearly US$600 million for its part in helping the disgraced company “turbocharge” opioid sales. McKinsey was also in the news in Canada a few years back when it came to light that it had advised grocery giant Loblaws while the latter was fixing the price of bread for over a decade. The scandal was made all the more intriguing by the fact that when McKinsey was advising Loblaws, US presidential contender Pete Buttigieg, now secretary of transportation, was in the middle of his post–graduate school private sector tenure at the company.
Canadian federal spending ranks in the hundreds of billions each year, of which outsourced contracts cost the state Can$14.6 billion in 2022. In a large, complex government, you’d expect some level of outsourcing. But under the Liberals, spending on external consultants has grown enormously. To be fair, the cost of public service has grown too, as Bill Curry and Mahima Singh write in the Globe and Mail. They note that some of that money went to the controversial and confusing ArriveCAN app, used by all travelers during the pandemic to submit customs declarations. Hundreds of millions more went toward the disastrous Phoenix pay system, which has been the bane of many federal public service employees’ existence for years. Indeed, the payroll system was so bad that some workers lost their homes.
The Trudeau government loves to outsource state work. Or prefers it, at least, to building in-house capacity. The practice seems to suggest a deep belief that outside experts know better how to design and deliver programing. Those outside experts happen to often view the world through a particular neoliberal and technocratic lens. Consequently, the practice of government outsourcing — beyond specific, niche technological and field-expert needs — amounts to constructing government as a neoliberal and technocratic venture.
Governments Should Keep Governance In House
The issue isn’t that the government requires some outside help. It’s that it requires so much. That amount only seems to be growing, with contracts more than doubling since 2006. A further issue is that the government contracts with companies Canadians might prefer it not work with.
Rather than growing its reliance on corporate consultancies, the federal government ought to grow the capacity of the public service such that it takes on more work in house. It ought to encourage the growth of participatory democratic institutions at the grassroots level to develop policy and approaches to policy implementation and management. That money could be an investment in state capacity that would pay dividends in the long run, particularly as the complexities of governance continue to grow. It is not outlandish to ask that the government perform its duties without seeking so much outside help.
A move to rely less on outside consultants and more on state employees would also help the government resist over-relying on corporate types with their own vision of how the state ought to be run. Of course, this assumes that government wants to avoid corporate quasi-government, which may not be a fair assumption. But as a normative position, it’s a cogent one: the elected government ought to be setting the direction of the country, and the professional, nonpartisan public service ought to be implementing policy and running programs. The more corporate fingers in the pie, the worse. After all, corporate interests rarely square with public interest — they are, in fact, often antithetical to one another.
No More Corporate Consultants
Instead of courting corporate consultants, the Canadian government ought to invest in strengthening its anemic think-tank capacity. Outside perspectives on governance can be valuable, and having spaces dedicated to generating, developing, and sharing ideas can provide expertise and perspective. We shouldn’t be too sanguine about the think-tank culture, of course. There’s always the risk of government crony culture, corporate infiltration, and laundering ideas. Still, it’s a good deal better than seeking the wisdom of corporate consultants. Not all technocratic knowledge is inhuman bead-counting. Think tanks populated by experts whose interest is the good of the public can yield positive results. But it is crucial that their role is secondary to functional governance — governance that is engaged deeply with citizenry and that operates within a broad culture of grassroots participatory democracy.
In 2016, the Trudeau government promised to cut spending on consultants and contractors. That, obviously, did not happen. Indeed, it went the other way entirely. Over the weeks and months to come, as the government operations and estimates committee digs into the McKinsey spending, we’ll learn more about Ottawa’s unjustifiable reliance on consultants. The investigation should not stop there. It should go deeper into the practice of outsourcing and encourage a national conversation about reforming the practice once and for all.Original post