Auditor General's Office confirms they will audit McKinsey contracts

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The Auditor General's Office has confirmed plans to launch a performance audit into federal contracts issued to consulting firm McKinsey and Company.

On January 18, the House of Commons’ Government Operations and Estimates Committee launched a study of the contracts, seeking considerable documentation from the firm and federal officials and hearing testimony from key players.

The MPs will be embarking on as part of this study will also be incorporated into a broader review the committee has scrutinized the federal government's overall outsourcing of contracts.

The committee had asked Auditor General Karen Hogan to review McKinsey's contracts.

Trudeau has also asked his ministers to look into the contracts and expressed a desire for change. His ministers and representatives from the firm will testify before the committee.

A spokesperson for the independent agency confirmed that planning for the review is underway but did not provide information on the scope or the extent of the audit.

The audit comes amid questions about McKinsey's federal contract earnings under Trudeau, its influence on government policies, and whether it constituted a good use of taxpayer funds.

McKinsey has since defended its efforts, claiming its work with Ottawa is "entirely non-partisan" and in line with procurement laws.

"Our government work in Canada is entirely non-partisan and focuses on core management topics, such as digitization and operations improvement," said the firm on January 10. "Our firm does not make policy recommendations on immigration or any other topic."

Since January 26, the controversial US multinational firm has received $104.6 million in contracts from Trudeau. However, they said information from other departments could see that number rise.

According to recent data from PSPC, McKinsey has received $116.8 million in contracts since 2015. It revised its statement after a frequent refresh of its contract management system captured a contract recently awarded. 

Per a document recently tabled in the House of Commons in response to a question from a Conservative MP, the contracts totalled at least $62 million between March 2021 and the fall of 2022.

The firm's work for the federal government has expanded rapidly since Prime Minister Justin Trudeau's Liberal government came to power in 2015.

Compared to the nine years Stephen Harper served as prime minister, they received only $2.2 million in federal contracts.

According to a Radio-Canada investigation, two immigration sources relayed that McKinsey influenced the country's immigration policy considerably.

Both sources from the Immigration, Refugees and Citizenship Canada (IRCC) criticized the firm's possible influence on Canada's immigration targets, which follow similar determinations from the 2016 Advisory Council on Economic Growth report.

The IRCC has turned to McKinsey on several occasions since 2015, with $24.5 million in contracts for management advice. The immigration department and the Canada Border Services Agency (CBSA) account for nearly half of all federal compensation issued to the firm.

In 2016, Canada accepted about 320,000 permanent residents. The advisory council recommended gradually increasing to 450,000 people annually to respond to labour demands.

Per the IRCC, Canada added just over 437,000 new permanent residents in 2022, accounting for three-quarters of the country's population growth. Ottawa wants to welcome upwards of 500,000 immigrants annually by 2025, per its immigration plan.