The newly formed Major Projects Office (MPO) in Ottawa is facing criticism for its methods of recruitment, particularly its requests to borrow, or second, top-tier talent from Bay Street at the junior and mid-career levels. This initiative, which is a signature move by Prime Minister Mark Carney, has been met with disapproval from business leaders and bankers due to issues surrounding compensation.
Concerns Over MPO’s Recruiting Strategy
The MPO has reportedly asked private-sector sponsors to consider supplementing the salaries of employees they loan to the government. While this could help offset the significant pay cuts that come with government work, it raises ethical concerns. The sources expressing these concerns – spanning capital markets, banking and S&P/TSX 60 corporations – asked to remain anonymous as they are not authorized to speak publicly.
Role and Purpose of the MPO
Established in August, the MPO is tasked with the regulatory fast-tracking of large energy, mining, and infrastructure investments under Bill C-5. This legislation allows projects to bypass normal legal requirements if they are deemed to be in the national interest. By doing this, the MPO aims to reduce Canada’s economic reliance on the United States in the wake of the trade war initiated by President Donald Trump.
Staffing Challenges for the MPO
The MPO has experienced difficulties in hiring junior and mid-career staff. While retired or late-career bankers, corporate lawyers, and executives have been more easily recruited, younger professionals are harder to attract. These younger hires face the potential risk of falling off their internal promotion tracks, and the substantial pay cut that they would take to work for the government is a significant deterrent.
Ethical Dilemmas Surrounding Compensation
Companies are being asked to consider topping up pay for their employees working for the MPO. However, this practice could lead to conflicts of interest, as banks seconding their staff could end up advising on the same deals the MPO is working on. Companies lending employees might also develop the projects that the MPO is considering. This issue is further complicated by the fact that government employees transferred to the MPO would make significantly less than their private-sector counterparts.
Alternative Compensation Strategies
In light of these challenges, some companies are considering different ways to compensate their seconded employees. One suggestion involves offering outsized bonuses upon the employees’ return to their original companies. However, this doesn’t address the potential loss of value from missed share-based awards, which are a common part of mid-career compensation.
Working for the MPO: A National Service
Despite these concerns, working for the MPO is seen as an act of national service. There is a chance that individuals who join might find they enjoy the public sector. A prime example of this is Mark Carney, who transitioned from Goldman Sachs to a role at the Bank of Canada before ultimately becoming prime minister.
