Crown corporation faces staff backlash over McKinsey contract, spending decisions

Multimillion-dollar contracts awarded by the Business Development Bank of Canada (BDC) to consulting firm McKinsey, coupled with some unusual spending choices — including a decision to fly a private chauffeur to B.C. to drive the Crown corporation's president around — are raising eyebrows within the BDC, sources say.

Current and former BDC employees say they're alarmed at some of the expenses incurred by the BDC under the leadership of president Isabelle Hudon.

Hudon, Canada's former ambassador to France, was appointed by Prime Minister Justin Trudeau's government in 2021 to head the Crown corporation. The BDC provides loans, venture capital and advisory services to small and medium-sized businesses across Canada.

Hudon is bringing major changes to the organization. The BDC has adopted more ambitious long-term growth targets and is taking on a larger social media profile, even as employment turnover in upper management has spiked.

"It has been a shock to the organization," said a source with a long record at the BDC.

All of the confidential sources who spoke to Radio-Canada for this report have worked under Hudon, although some have since left the BDC. They spoke on the condition of anonymity, either because they were not authorized to speak publicly on the matter or because they wanted to speak freely about their professional experiences.

Hudon did not agree to a request for an interview. CBC/Radio Canada asked a series of questions of the BDC, which provided written answers.

One of Hudon's first decisions at the BDC was to hire a consulting company to carry out a major strategic review of the role and objectives of the Crown corporation over the next 10 years.

A source who was working at BDC at the time said Hudon wanted to "start from scratch."

The BDC confirmed that Hudon, with the support of her board and management team, was behind the decision to hire an outside consultant — a decision that has caused a stir inside her organization.

"Any incoming CEO must, upon entering office, evaluate the current situation and define the road ahead for the corporation. Which, let's be honest, will not necessarily please everyone involved," said BDC spokesperson Phil Taylor.

The BDC invited five consulting firms to submit proposals. After a ranking process, the BDC picked McKinsey & Company, which had worked for the BDC already and has received a large number of lucrative federal contracts.

The BDC awarded a $2.8-million contract to McKinsey for the review in August, 2021. A $2.1 million extension in June, 2022 brought the total value of the contract to $4.9 million.

Sources with long ties to the BDC question the benefits of hiring McKinsey.