Government Operations Committee on June 16th, 2009

[Jean-Yves Roy, Bloc, Haute-Gaspésie—La Mitis—Matane—Matapédia, QC]

I would like to move on to the Pacific Pilotage Authority because...

[The Chair, Liberal, Derek Lee]

Time has expired, but we can come back.

Before we go to Mr. Anders, maybe I can help out Mr. Warkentin a bit. As fate would have it, I was a young lawyer working around the Great Lakes back in the early 1970s. There was a period of labour strife among the crews of the Canadian fleet, the officer class of the various fleets, and the pilotage authorities.

The solution proposed by the stakeholders, the fleet owners, was that there be an exemption for the Great Lakes portion, not the St. Lawrence portion or the coastal portion. The theory was that there is very little in the way of tides, the seaway portion of the Great Lakes was pretty regimented, and the officer class on these ships at that time was very highly trained and knew every square inch of the lakes on the Canadian and American sides. At the time it was a simple solution, but it does raise the question of how this pilotage authority accurately projects its revenues and usage of pilots.

That was one of the issues that I think you raised, because they were either over or under 6% and down 16% in terms of their projections, so either they're going to be out of pocket or somebody is going to have to pay the freight on their overestimation or underestimation of utilization of the pilotage functions.

Are they dealing with only the foreign vessels, then?

[John Wiersema]

For the pilotage fees, yes, that's correct.

[The Chair, Liberal, Derek Lee]

It might be easier to get a better average if you could assess pilotage fees against the Canadian fleet and the foreign fleet together. You'd get a bigger number. However, if the foreign vessels come in big numbers, you have huge take-up and the costs of bringing in appropriate pilots and overtime, which can be very expensive. Then the reverse can also happen.

Anyway, the answer to Mr. Warkentin's question is that it came out of a period of labour difficulties and some very intense labour problems.

Mr. Anders, you have five minutes, please.

[Rob Anders, Conservative, Calgary West, AB]

It's fascinating on several fronts, Mr. Chair.

[The Chair, Liberal, Derek Lee]

I was a deckhand and a lawyer, separated by five years.

[Rob Anders, Conservative, Calgary West, AB]

I understand.

Though it sounds like a fascinating topic to pursue, I do have some questions for our witnesses.

You mentioned 46 parent crown corporations. Would you be able to list a bunch of those for me?

[John Wiersema]

I will try from memory, Mr. Chairman.

Some of the big ones are the Canadian Broadcasting Corporation, VIA Rail, Export Development Canada, Atomic Energy of Canada Limited, Canada Post Corporation, and the Bank of Canada, although we're not the auditors of the Bank of Canada.

Mr. Flageole, keep going.

[Richard Flageole, Assistant Auditor General, Office of the Auditor General of Canada]

There is Canada Mortgage and Housing Corporation. There's a good number in the Heritage portfolio, including all the national museums, the National Arts Centre, the Canada Council for the Arts, and Telefilm Canada. There are a good number in Transport; the Federal Bridge Corporation Limited is just one.

We have quite a diversity of those organizations. Some are very big. I think four or five account for about 80% of the people working in there. Some are very small. Some might have only 50 to 100 employees. It is quite diverse.

[John Wiersema]

A very small one, for example, is a recently created crown corporation, the Canadian Race Relations Foundation. It is a very small crown corporation.

They range from organizations with a dozen or so people to organizations with tens of thousands of employees, such as Canada Post and CBC.

[Rob Anders, Conservative, Calgary West, AB]

So far I've got about a dozen in your list. Are there some others you could delve into? You mentioned there were several under Transport, and you mentioned VIA, but what other ones were you thinking of?

[John Wiersema]

Canadian Air Transport Security Authority, CATSA, is another crown corporation. The individual museums are crown corporations, so the Museum of Civilization; the Museum for Human Rights, recently opened in Winnipeg; the Museum of Nature; the Science and Technology Museum.

There is a complete list, Mr. Chairman, that's prepared and tabled in Parliament once a year by the President of the Treasury Board of all of the government's corporate interests, including crown corporations, as well as its other corporate interests. I'd be pleased to provide a complete list to the committee, or it's available as well in the President of the Treasury Board's “Annual Report to Parliament - Crown Corporations and Other Corporate Interests of Canada”.

[Rob Anders, Conservative, Calgary West, AB]

Yes, I'd be fascinated to get one.

[John Wiersema]

We'll provide the Treasury Board report.

[Rob Anders, Conservative, Calgary West, AB]

Now, I think Mr. Calandra has some questions. He can take the rest of my time if he wishes.

[Paul Calandra, Conservative, Oak Ridges—Markham, ON]

I have a couple of quick questions.

Can you tell me a little bit more about the management structure at Downsview Park?

[John Wiersema]

Downsview, that's an interesting one. Mr. Flageole used to be the Assistant Auditor General responsible for the audit work we did in Downsview. Perhaps I could ask him to talk a little bit more about the governance.

It's an interesting governance structure, because it was initially created as a subsidiary of the Canada Lands Company, and the government subsequently deemed it to require that it report as a parent crown corporation. It's a corporation that's been set up to look after the development of the former DND Downsview Base in downtown Toronto into a national park.

With that, I'll turn it to Mr. Flageole.

[Richard Flageole]

As Mr. Wiersema mentioned, it is a sub of another crown corporation, but it's been deemed a parent. So in terms of governance structure it has a typical structure of a crown corporation with its own board of directors, who are really overseeing management. There are very few links, in reality, between that corporation and its parent company, which is the Canada Lands Company.

[Paul Calandra, Conservative, Oak Ridges—Markham, ON]

And what are they doing there now? What are the predominant uses of Downsview Park right now?

[Richard Flageole]

They're really developing the former Canadian air force base, so they have a long-term plan. They're still at the early stage. Most of the work done in the last two, three years was mainly landscaping work. They have a comprehensive development plan over the next 25 years. The major section will be a park, but there's also a whole bunch of projects, in terms of residential land, commercial-type real estate. There are a number of sports activities that will take place. The plan is to develop all of this over the next 20 years, but it's a fairly comprehensive development project on the site.

[Paul Calandra, Conservative, Oak Ridges—Markham, ON]

Would you have any suggestions as to whether this type of management approach to an urban park, as such, is positive or negative? The way the park is managed right now, has it been positive or negative in helping them eventually get to a national park?

[John Wiersema]

Perhaps I'll start on that one, Mr. Chairman, and then Mr. Flageole can supplement.

When this corporation was initially set up as a subsidiary of the Canada Lands Company, with a mandate to develop an urban park, the Auditor General initially expressed concerns about the manner in which this corporation had been set up and the significant costs of developing this national urban park. Parliament did not have an opportunity to participate in that decision. This was created, through an order in council, as a subsidiary of the Canada Lands Company. Since then, the government has deemed it as a parent crown corporation, so now it reports to Parliament just like any other parent crown corporation. That's gone a long way to addressing the initial concern we expressed when it was initially created.

The special examination report that we issued on Downsview was a clean opinion. We did not indicate any significant deficiencies. Overall, we thought the corporation was generally well managed in terms of achieving its mission and vision, which is the ultimate development of the park. But, as always, auditors always can find opportunities to improve things, so we had a few of those.

[Paul Calandra, Conservative, Oak Ridges—Markham, ON]

Sure.

Richard, did you want to add anything to that?

[Richard Flageole]

I think you've essentially covered the main points.

To go back to the special examination, I think our conclusion was that they have a fairly strong planning process for developing the park. They have a very clear vision of what they want to do with the park. I guess the big question with Downsview is the financing of the development of such a major project. They have a 25-year financial forecast. The board made the decision to develop on a pay-as-you-go basis. I think we were quite satisfied with the financial planning aspect.

I think the main message we gave to the board is that there are so many assumptions and uncertainties when you're planning to develop such a project over 25 years, so the board will have to keep a very close eye on how those assumptions might change on things like inflation, construction costs, real estate value, and borrowing rates. Those are moving targets. It will be very, very important for the board to keep a close eye on the financial aspect of the project.

[Paul Calandra, Conservative, Oak Ridges—Markham, ON]

I'd just like to give you some background. I asked because in Oak Ridges—Markham I have a large amount of what could potentially be the Rouge Park. We're looking at different structures and how we might manage the Rouge parkland, which would include the Pickering airport lands, so I'm very interested in how that park has been managed. You may not be able to answer this question on the board itself, but how are people appointed to the board of the park? What is the composition?