Since the start of the year, the Trudeau government has been on the backfoot over its $116.8 million cheques they wrote to McKinsey and Company. This is a highly-secretive “behemoth management consultancy firm” hired to “manage” and “transform” several federal government programs in secret.
While the details of McKinsey’s contracts are highly secretive, McKinsey’s past history—aiding in job cuts, wage cuts, price fixing and privatization schemes—indicates that none of this “advice” to the liberals will help the working class.
McKinsey’s $116 million
While different governments have used McKinsey’s “services” over the years, their contracts have completely ballooned under the Trudeau liberals. Before Trudeau’s election, McKinsey had received mostly technical federal government contracts. Between 2005-15 those contracts totalled just $2 million. In contrast, According to the Globe and Mail, between 2016-2022 Canadian federal contracts made up roughly 10 per cent of McKinsey’s revenue!
What did McKinsey offer for $116 million? Nobody seems to know exactly. According to CBC News, Public Services and Procurement Canada contracted McKinsey for unspecified “computer services.” Elsewhere, Innovation, Science and Economic Development Canada said it contracted McKinsey for millions of dollars for elusive “management advice.” Export Development Canada contracted it for “analyses” and Immigration, Refugees and Citizenship Canada asked McKinsey for an unspecified “transformation.”
While McKinsey itself has generally declined requests for interviews, it specified in an official statement only that its work for the Government of Canada focused primarily on “core management topics”, whatever that may mean.
Similarly, when asked for detail, a spokesperson for Public Works told CBC News the government was badly in need of McKinsey’s “expertise.” But the nature of McKinsey’s “expertise,” remains vague.
Blank cheques for McKinsey, cuts for workers
McKinsey has 30,000 managers in 130 offices across 65 countries. Its former chair, Dominic Barton, also served as head of the Trudeau government’s advisory council and ambassador to China. Moreover, Trudeau has also personally praised McKinsey to a Davos audience. It’s an incredibly expensive, boutique firm and, when it is contracted, people typically notice. Yet, when asked what his government paid McKinsey for, Trudeau offered no insight.
Trudeau, instead, vowed to ask Procurement Minister Helena Jaczek and Treasury Board President Mona Fortier to “take a close look at the numbers and to look into the circumstances.”
This is particularly galling at a time when the same Trudeau government is forcing workers to accept budget cuts and “restraint.” The federal government, moreover, capably tracks workers—when they receive Employment Insurance, student loan aid or other programs—down to their every movement and every last cent. Yet, McKinsey’s multimillion dollar contracts are treated as a private matter. This is further confirmation that there is one law for the rich and another for the rest of us.
In a press release, the New Democratic Party criticized the deal’s high price tag. “The money Prime Minister Justin Trudeau has given McKinsey could have paid for more than a thousand nurses,” MP Matthew Green said. “What kind of value did Canadians get for this obscene $100-million transfer of taxpayer money to Trudeau’s pet firm?”
However, while McKinsey may have pocketed over $100 million without oversight, a review of the company’s history finds that its crimes go well beyond fiscal imprudence.
McKinsey’s worldwide scandals
While we still don’t know what exactly McKinsey advised the Canadian government to do, a look at the history of the consulting firm gives an idea of what we can expect.
During the Cold War, McKinsey traveled between the U.S. Department of Defence and firms that profited from Western military interventions. Its profile grew as it helped other multinationals cut wages and jobs at home. And, in between, McKinsey has helped drug, auto, grocery and other monopolies hike prices, profiteer and secure lucrative government contracts.
In his history of the company, The Firm: The Story of McKinsey and Its Secret Influence on American Business, Duff Mcdonald notes that McKinsey’s first big break came in the early days of the Cold War. McKinsey made its name advising the Eisenhower government as it expanded its executive wing and Department of Defence. In these early days, McKinsey was also tasked with helping the British government reorganize its colonial administration in Hong Kong.
Soon after, McKinsey helped U.S. and European firms reorganize their investments abroad—especially in countries ruled by Western-backed, right-wing dictators. This meant reorganizing Dutch Shell’s operations in Venezuela in the 1950s, helping German trucking firms reorganize their Brazilian plants in the 1970s and supporting privatization efforts in Chile in the 1980s.
As the post-war boom receded, McKinsey secured new contracts at home—shedding jobs and cutting wages at General Motors, Proctor and Gamble, Renault and other major industrial firms. As McDonald observes: “McKinsey has been the impetus for more layoffs than any other entity in corporate history.”
Since the end of the Cold War, McKinsey has grown in size, influence and notoriety.
During the first Gulf War, the company was invited by the Pentagon to meet with top U.S. military personnel in Saudi Arabia. Here, too, its interests were corruption as one McKinsey principal told McDonald: “That could only help our clients do better.”
In the financial sector, prior to the 2008 financial meltdown, McKinsey advised Wall Street’s most over-leveraged firms, from Lehman Brothers to CitiGroup, to “securitize” their dodgier loans and move them off their balance sheets. For good measure, McKinsey further suggested these “financial megaplayers,” take advantage of the “ability to influence one’s regulator.”
In the pharmaceutical sector, McKinsey helped Purdue “supercharge” its Oxycontin sales.
And, on the government side, McKinsey has made headlines for helping the Saudi monarchy crush dissidents and helping the Trump government manage its infamous ICE Detention camps.
McKinsey’s provincial COVID-19 contracts
Since 2019, McKinsey has also worked with right-wing premiers from Quebec to Alberta to help them mismanage COVID-19 as well as cut and privatize government programs.
In the early days of the pandemic, Quebec’s right-wing CAQ government paid McKinsey $6.6 million to help it “lift” public health restrictions. As we know, the capitalists in general were the ones pushing for companies to stay closed for as little time as possible, and reopen as soon as possible. McKinsey’s advice helped the government make their botched plans more palatable to workers through some public relations gimmick.
In Ontario, Doug Ford’s Progressive Conservative government paid McKinsey $1.6 million to turn Ontario’s pandemic health table into a “command table” of the province’s business leaders. This table, infamously, was empowered to override scientists in meetings with cabinet.
Prior to COVID-19, Jason Kenney’s Alberta government also tapped McKinsey, for $3.7 million, to launch a “comprehensive review,” of Alberta’s post-secondary system—specifically: Finding new cuts and “revenue-generating” opportunities.
During the current scandal, McKinsey has likewise noted that its outsized role in federal policy has coincided with an increased turn to privatization and outsourcing. McKinsey’s statement observed: “Our work for Canadian government departments has increased in recent years, along with a growth in consulting outsourcing more generally.”
Capitalist advisors help capitalist governments serve the capitalists
The reality of McKinsey’s “expertise” is that the firm exists because it helps capitalists make and maintain their profits, even (and perhaps especially) if it involves crime, fraud, corruption and disaster. Their “expertise” is about making governments take the decisions best suited to business interests.
A review of McKinsey’s history finds it has always, in fact, been a loyal servant of American, European and Canadian capitalism. In every previous case, McKinsey has advised governments and companies alike to help them better attack the working class at home and abroad.
Whatever we end up finding out about McKinsey’s current dealings with the Federal government (if we actually end up finding out what their actual advice was), we can be certain it will correspond to big business interests.
It is hardly surprising McKinsey’s profiteering and cuts have been embraced by Doug Ford, Justin Trudeau, Jason Kenney, François Legault and other capitalist politicians. They share, above all, a commitment to capitalism and profit. McKinsey, to this end, has proven itself to be a useful coordinator between capitalist politicians and the capitalist class. Both work together to make working class lives worse.
In The Communist Manifesto, Marx and Engels explain that, under capitalism, “The executive of the modern state is but a committee for managing the common affairs of the whole bourgeoisie.”
In this case, we see federal and provincial governments alike turning to committees of capitalists themselves to guide their policies and programs. This is the “expertise,” McKinsey offers.
The rot of McKinsey is the rot of capitalism—a system that cannot exist without corruption, exploitation, privatization. McKinsey’s managers just happen to be experts at it.
