BDC faces staff backlash over McKinsey contracts, questionable spending

24 January 2023 3 min. read
More news on

Confidential sources speaking with CBC/Radio-Canada have raised concerns over expenses incurred at the Business Development Bank of Canada (BDC) under the leadership of president Isabelle Hudon.

Hudon, formerly Canada’s ambassador to France, was appointed head of the crown corporation by Prime Minister Justin Trudeau in 2021. The BDC provides loans, venture capital, and consulting to Canadian small- and medium-sized enterprises (SMEs).

The sources – who either work at the BDC or recently left the crown corporation – highlighted contracts awarded to consulting firm McKinsey & Company as well as questionable spending on events and transportation.

BDC faces staff backlash over McKinsey contracts, questionable spending

One of Hudon’s first decisions was to hire the New York-based strategy firm to carry out a strategic review of the roles and objectives of the BDC over the next decade. The crown corporation invited proposals from five firms and ultimately selected McKinsey – which previously worked for BDC and has racked up $101.4 million in federal contracts since Trudeau took power in 2015.

McKinsey was awarded a $2.8 million contract for the BDC review in August 2021 and a $2.1-million extension in June 2022.

Radio-Canada’s sources say the decision was met with frustration by BDC employees, who had completed similar strategic exercises before Hudon’s arrival. The move to hire McKinsey suggested a lack of confidence in BDC’s internal resources, one source said. Another said the strategy firm’s recommendations will be difficult to put into practice.

McKinsey’s review has played a key part in the new course Hudon has charted for the BDC – including plans to triple the size of its pool of entrepreneur clients in 10 years and boost the value of its current portfolio from $38 billion to $95 billion.

Several sources pointed to high turnover in senior management in recent months, with approximately 10 departing top positions at the BDC. The crown corporation has also hired four of Hudon’s former colleagues from her 2010-2017 tenure at Sun Life, where she led Quebec operations.

BDC employees also criticized certain spending choices under Hudon, including a $320,000 “outreach event” that was streamed to thousands of BDC employees across the country. Highlights included Hudon chatting with host Rebecca Makonnen about a shopping trip they took together to Paris, the importance of “human connections” in the post-pandemic era, and the “new chapter” that began under Hudon’s leadership.

Makonnen was paid $11,500 for her services, while $146,000 was spent on audiovisual services and $145,000 on script-writing and video production. Sources who attended the 68-minute event questioned its value.

Hudon also flew her Montreal-based chauffeur to cross-country engagements instead of using taxi services. The BDC spent $8,100 in 2022 to twice send the driver to British Columbia to accompany Hudon on official trips.

A BDC spokesperson told Radio-Canada that flying the driver to BC represented the best value-for-money and was done because of “external factors, long distances, and the need to allow the CEO to work in a confidential setting.”