Shadow Government: How are consulting firms shaping Canadian politics?

In this article for The Walrus, Justin Ling (2024) draws attention to the significant influence of consulting firms, particularly McKinsey & Company, on the Canadian federal government. Over the last decade, McKinsey has received numerous high-value government contracts across various industries notably military, immigration, and environmental policy, contributing to growing skepticism about accountability, transparency and fairness. 

In 2021, the Department of National Defence hired McKinsey to reform its complaints process amid sexual misconduct allegations. McKinsey proposed consolidating complaint intake into a "single disclosure team" - a recommendation which made the firm $15 million, and yet was later criticized as being ineffective by retired Supreme Court Justice Louise Arbour. 

Similarly, Immigration, Refugees and Citizenship Canada (IRCC) commissioned McKinsey to modernize its application processing, leading to recommendations for automation and AI integration, providing McKinsey this time with $25 million. Although these recommendations were adopted quickly, they were also heavily criticized when a 2023 Auditor General report found that these changes resulted in minimal improvements and introduced biases, particularly against Haitian applicants. 

Finally, despite the firms limited knowledge in nuclear energy and their history with advising major energy corporations, Natural Resources Canada also consulted McKinsey on energy transition strategies. To boast, many of their contracts were awarded without competitive bidding, further fueling concerns regarding potential conflicts of interest. 

In 2015, Prime Minister Justin Trudeau criticized the excessive spending on consultants, and despite this recognition, his administration increased these expenditures, with McKinsey alone receiving over $209 million between 2011 and 2023. Ling's article illustrates the reliance on external consultants in Canadian governance, reinforcing concerns about accountability, efficacy, and public sector capabilities. 

Amid media scrutiny and political opposition, an internal review was conducted in 2023, and found that there was no political interference in these contracts. However, in 2024 an independent procurement ombudsman later identified a "strong perception of favoritism towards McKinsey,” citing a lack of oversight and justification for sole-source contracts. 

This article raises questions about who is really guiding the decision-making process in Ottawa. 

Written by Sabrina Careri, for Ann Dale.

Image credit: Benoit Debaix from Unsplash