Government Operations Committee on Dec. 6th, 2012

[The Chair, NDP, Pat Martin]

Ladies and gentlemen, we'll convene our meeting of the Standing Committee on Government Operations and Estimates. We're very pleased today to continue our study regarding the examination of the renovations and associated costs for the parliamentary precinct renovation project.

We're very pleased to welcome today as our guests, officials from the Department of Public Works, specifically Pierre-Marc Mongeau, assistant deputy minister, parliamentary precinct branch, and I'll let you, Mr. Mongeau, introduce your other panellists. I welcome you and give you the floor to introduce the topic for today.

[Pierre-Marc Mongeau, Assistant Deputy Minister, Parliamentary Precinct Branch, Department of Public Works and Government Services]

Thank you, Mr. Chair.

I am going to make my presentation mostly in French and my colleagues will speak to you in English.

Thank you very much for inviting us. I am joined today by my colleagues Joanne Monette, Director General, Planning and Operations, Parliamentary Precinct Branch and Ezio DiMillo, Acting Director General, Major Crown Projects, meaning everything to do with the construction.

Once more, thank you for inviting us to speak with you today on the implementation of the long-term vision and plan, or LTVP, a multi-year plan for rehabilitating and modernizing the parliamentary precinct. I am happy to be here to answer your questions, but before I do, please allow me to begin with a brief presentation on where we are at the moment.

I think that you have received our document. We have included some photographs and we provide information on the stage that some of our projects have reached. We show the overview on page 2.

Canada's Parliament buildings are in a state of advanced deterioration that presents health and safety risks to parliamentarians, staff and the public. For example, two weeks after being emptied in December 2010, the West Block experienced a flood so severe that would have shut it down indefinitely. And just this past February, water leakage in the Centre Block caused the failure of one of two transformers providing power to Parliament Hill. We are regularly faced with major issues because of the buildings' advanced age.

The LTVP is designed to address this deterioration, as well as the accommodation needs of a Parliament that has grown considerably since the buildings were constructed in the 19^th and early 20^th centuries. To be precise, in 1856 and 1920.

The current LTVP strategy was approved by cabinet in 2007 and again in 2010. It prioritizes the rehabilitation of the West, Centre and East blocks, and is based on rolling five-year programs of work. So we are working in five-year programs, with priority given to the three main buildings on Parliament Hill itself.

This approach offers the government maximum control of the plan by enabling it to set the long-term direction, while establishing clear priorities at five-year intervals and within pre-approved funding envelopes. Individual projects within each program of work are subject to Treasury Board approval. These short and manageable cycles allow us to respond to shifting priorities and permit greater accuracy in determining the requirements of the partners—meaning yourselves—and in developing project costs and schedules.

Slide 3 shows why rehabilitation is required now. The need to rehabilitate and modernize the Parliament buildings has been a long-standing concern, recognized on many occasions, including by the auditor general. Independent technical assessments from 1999, 2006 and 2009 consistently conclude that the condition of the buildings is deteriorating, particularly the Centre Block, which is projected to reach a critical risk of total failure by 2019. I will explain what that means later. But there is a possibility of structural, mechanical and/or electrical failures, which could render the building uninhabitable and require it to be shut down.

Other major issues at this time include the presence of hazardous materials and the need for seismic upgrades to comply with national building codes. The implementation of the LTVP will address these matters; it will ensure the safety and security of parliamentarians and the public, and will provide Parliament with the level of accommodation needed to carry out its duties.

Slide 4 shows an example of the restoration required. The restoration of heritage buildings is a complex, labour-intensive, time-consuming and costly endeavour, but a necessary one, especially in the case of the Parliament buildings. The buildings need to be fully rehabilitated from the inside out. Their exterior masonry is to be repaired and restored, while their internal systems are to be replaced.

Slide 5 describes how, over the years, the department has worked with the Senate, the House of Commons and the Library of Parliament to yield some remarkable achievements. We have completed 15 major relocation projects. All major projects continue to track on schedule and within their approved budgets. In her 2010 report, I remind you—as I did the last time I was here—that the Auditor General recognized the efforts of Public Works and Government Services. She stated that, and I quote:

Public Works had in place generally sound project management practices…The department also developed a costing estimates methodology that takes into account the risks rehabilitation projects are facing…

The words “generally sound practices” are an auditor's way of saying that things are going well.

Similar conclusions were made just this past September by an independent firm that concluded that the department exercised sound project management practices for the six major crown projects it assessed, including the West Block, the Wellington Building and the Sir John A. Macdonald Building.

In 2012, the new Auditor General stated that, and I quote:

Public Works and Government Services Canada adequately planned for and assessed the benefits, costs and risks of its contractor use at the branch or departmental level.

So that was in regard to our use of advisers and consultants for the various projects.

In planning for a major rehabilitation of the Parliament buildings in the United Kingdom, the deputy speaker of the House of Lords recently consulted our team and our parliamentary partners on the work underway here in Canada to see what lessons have been learned so far. The deputy speaker of the House of Lords is from England, of course.

Slide 6 shows the projects that have been completed to date. In the spring of 2006, PWGSC completed the major rehabilitation of the Library of Parliament. The 130-year-old building—the oldest on the Hill—received a complete overhaul of its exterior and interior systems. This work was later recognized with numerous awards for our outstanding efforts in conserving this very important building.

Slide 7 shows the savings we have achieved. As I have already mentioned, between 2006 and 2010, the department completed 15 major relocation projects to support the major rehabilitation now underway. Those projects realized substantial time savings and came in at nearly $35 million under budget.

Let me mention some of the key relocation projects. Slide 8 shows the key relocation projects that have been completed. A new food production facility was constructed in Ottawa's east end. The building exceeded the planned sustainability target of LEED silver and instead achieved LEED gold. It was completed six months ahead of schedule and $6.3 million under budget.

The former Canadian Museum of Contemporary Photography was converted into four state-of-the-art committee rooms for the House of Commons using funds from Canada's economic action plan. The project was completed on budget in 16 months. It enabled us to advance the completion of the West Block project from 2020 to 2017.

The La Promenade building, the wonderful building we are in today—if I may blow its horn for a moment—was renovated and fit up for 62 MPs' offices and three committee rooms, including this one. The project was completed on time and $6.4 million under budget. I can assure you that, when we plan for these committee rooms, we imagine from the outset where we are going to be sitting when they are complete. That is what I am doing today.

Slide 9 shows our current work on some very prominent buildings. The work is very visible. The East Block north tower project, for example, is currently underway and on track for completion in 2013. The project will restore the tower and address structural issues with its foundation.

Slide 10 shows the work being done on security measures along Wellington Street. We are working closely with the RCMP on this project. Several security enhancements are being made throughout the precinct to ensure the security and safety of parliamentarians and visitors alike.

This includes the installation of retractable bollards at four vehicular entry points, as well as fixed ones at pedestrian gates. This project is on track for completion in 2013.

By the way, I must thank you for your patience during this project.

The former Bank of Montreal, now named the Sir John A. Macdonald Building across from the West Block, is being rehabilitated to provide permanent space for the House of Commons to replace the former room 200 in the West Block.

The project also includes the construction of an addition to the west of the building that will house support and loading facilities. Work at this time includes seismic upgrades needed to meet today's codes. The project is presently tracking ahead of schedule. Everything should be complete in 2015.

If you go to page 12, you will see that the rehabilitation of the Wellington Building is well underway. It is also on track. It is to be completed in 2016. When complete, it will house 69 parliamentary office units and 10 committee rooms.

Slide 13 shows the West Block. We have a model with us, as well as some photographs. As you are aware, the West Block project is well underway. When complete, the revitalized building will house an interim House of Commons chamber, a number of parliamentary offices and a host of functions from the Centre Block during its rehabilitation. The project will also permanently expand the usable space of the building by 50%.

I remind you that the roof is permanent and that, when the chamber goes back to the Centre Block in a number of years, we will be able to remove the current enclosure around the chamber, the one you can see in the model, and build new floors so that we can increase the number of offices and meeting rooms once again. So we have some flexibility in the way the project will develop. Completion is still scheduled for 2017.

I also want to remind you that decisions regarding the partners' requirements, or specific design elements in the precinct, are not made alone and unilaterally by Public Works. Matters such as these are consulted on with independent experts and carefully vetted by stakeholders at all levels, including the administrations of the Senate, the Library of Parliament, the House of Commons, the Federal Heritage Buildings Review Office and the National Capital Commission.

The department is committed to restoring and preserving Canada's Parliament buildings according to all applicable codes and regulations, and to demonstrating accountability and fiscal responsibility in doing so.

The implementation of these projects and the overall LTVP is guided by a strong oversight and accountability regime that includes a third-party review framework covering areas such as contracting and costing. All major construction contracts are awarded through a transparent and competitive two-stage process that is overseen by independent fairness monitors.

On page 14, you will see that we too understand that concerns for the costs associated with an undertaking of this size are to be expected, especially in a time of fiscal restraint. I am ready to answer your questions on this. Given the complexity of these projects, it is also understandable that there be questions about what these costs include and how they were calculated.

The final slide, slide 14, shows the current project approvals for the major projects currently underway in the precinct, as well as completed project and leases for the West Block rehabilitation program. All major projects continue to track on or ahead of schedule and within budget.

At this time, I am happy to answer your questions. I will call on my colleagues if the need arises.

Thank you very much for your patience, Mr. Chair.

[The Chair, NDP, Pat Martin]

Thank you very much for that presentation, Mr. Mongeau. You're right. There are a great deal of concerns and questions associated with what you've told us today.

Linda Duncan will begin for the NDP.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Thank you, Mr. Chair, and thank you very much to the witnesses for coming out on this chilly day. We had summer one day this week.

As you've noted, the Auditor General, in her report in 2010, found that project management was generally sound, but the majority of her report was heavily critical of the overall management system for this project. She reported that control and responsibility should rest with Parliament, not with Public Works and not with Treasury Board. She expressed strong concern that the government's framework provided for very fragmented decision-making, which could cause delays, cost overruns, and general problems in proceeding.

Given what you said, it sounds as if things remain the same. I'll give you an opportunity to advise us what changes have been made in the government's framework to address the Auditor General's concerns.

[Pierre-Marc Mongeau]

Thank you very much for your question.

As you just mentioned, the 2010 Auditor General's report had two aspects. One of the elements was the governance, the other was the work done by Public Worlds and Government Services Canada. In terms of the work done by Public Works and Government Services Canada, I remind you that no recommendations were made. There were congratulations on the various methods that we had put in place to control costs, on the lessons we have learned, and on the management of the buildings and the environment.

In terms of the governance, Public Works and Government Services Canada took action following the report. We acknowledged the report's recommendation on governance, and we looked at other types of governance in other countries. We went to England and Australia to see them. We even checked with governments like those in Ontario and Quebec to find out about systems in place there. In some cases, they had systems like here, with a senate and an elected chamber. In other places, there was only one chamber.

We examined those reports thoroughly. The part of the work that was supposed to be done by Public Works and Government Services Canada was done. Now we have to sit down with representatives of the Senate and the House of Commons to determine the next steps in the examination of the governance.

Having said that, Mr. Chair, I must add that the current relationship between the House of Commons, Public Works and Government Services Canada, the Library of Parliament and the Senate is excellent, which was not always the case. In the past, perhaps there were differences, likely because of different objectives. But today everyone understands that the global financial situation is difficult.

I can tell you that, over the last two years, the relationship has improved a great deal, as I told you earlier. Management systems have been put into place. We now have joint committees of the House of Commons, Public Works and Government Services Canada and the Senate. Projects are developed and then sent to review committees. Some projects go before the Board of Internal Economy or the Committee on Internal Economy, Budgets and Administration depending on whether the projects are for the House of Commons or the Senate. On our side, we look for the normal approvals from the House of Commons, from the Treasury Board and from various offices. In a word, the current situation is going very well.

The issues we faced, say, two, three or five years ago have disappeared now. When issues arise now, basically, the clerks of each of the two chambers and I sit down and solve the problems. We find solutions. We are always looking for savings.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

I've probably got less than a minute left. Connected to your response, I'm wondering if you could provide us with an outline of the new management framework in response to the Auditor General's report.

Her second major concern was that there's no funding commitment for the long term. As you say, in her report she recommended considering the systems in the U.K., Australia, and the U.S., where they've taken the decision-making away from the government and created a separate entity. I'm wondering if you've given consideration to some kind of an entity, a trust, with a long-term commitment of the dollars.

Are you suggesting that this project may drag out longer because of cutbacks? Is this project potentially at risk because of economic problems in the Government of Canada? Have you given consideration to the importance of this project—which successive governments have committed to, and the public is supportive of—in providing long-term commitment to funding?

[The Chair, NDP, Pat Martin]

Could we have a very brief answer, Mr. Mongeau?

[Pierre-Marc Mongeau]

It's a long question.

Right now, the latest thing we have decided to do is to go with five-year tranches. By doing that, we have better control of the spending. We can go back to Treasury Board or go back to cabinet. We have a structure that allows us to give the government the control it wants to have. This is the main thing that we did, to go with a five-year tranches, instead of going with a five-year....

We can provide the documents we have on the current structure, if the committee so wishes.

[The Chair, NDP, Pat Martin]

Thank you very much.

For the Conservatives, we have Jacques Gourde.

Go ahead for five minutes, please, Jacques.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Mr. Chair, can we just confirm that they will send us the framework?

[The Chair, NDP, Pat Martin]

I think that's what I understood Mr. Mongeau to say, that he will forward the structural framework of the new administration.

Jacques.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Thank you, Mr. Chair.

My thanks to the witnesses for joining us today.

The model you have brought is very interesting. I see that the glass roof seems to be in two sections. Can you tell me about the mechanics of the glass roof? I don't think we have ever talked about it and a lot of people are intrigued.

[Pierre-Marc Mongeau]

Thank you for the question.

In a few moments, I will turn things over to my colleague, Mr. DiMillo, who is responsible for the design and construction of the project.

I would like to emphasize that the object of the model is to show the effect visually. The photos that we are showing you do the same thing. Then I am available if you need any more explanation.

The roof has two levels, which gives us a working space. The first layer, the direct protection, is triple glazed. There is a work area in the middle where we will see the mechanical systems and some other ones. Then there will be what we call the laylight layer, the part you will see.

Ezio, maybe you could talk about what's going to be happening in this structure.

[Ezio DiMillo, Acting Director General, Major Crown Projects, Parliamentary Precinct Branch, Department of Public Works and Government Services]

As Mr. Mongeau mentioned, the upper layer is a triple-glass layer, which prevents the elements from getting in. It also soundproofs the chamber. Underneath that, there is what we call a laylight layer essentially forming a pillow. The roof is like a pillow. That's quite beneficial, because we will actually capture heat from the pillow. Even during the winter months it will be capturing heat. It will be recirculated into the occupied space. All the mechanical and electrical systems that are extracting that heat will be ducted down into the actual chamber. That roof will produce approximately 10% of the energy requirements of that building on a sunny day even in the wintertime.

The laylight layer also acts to improve the sound characteristics of the chamber. When you have a large volume of space, managing sound is something you need to consider. The laylight essentially reduces the volume and allows us to control intelligibility.

[Pierre-Marc Mongeau]

Mr. Chair, I would like to add that the roof is made in such a way as to not be visible from the street. After discussions with a number of our experts, we have come to understand that the heritage value of the building should not be affected or diminished by the addition of the roof. You can see that it is almost horizontal. The roof, as I said, will not be visible from the street so that we can maintain the building's historic character. But when you go inside the Chamber, the roof will be very visible.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Mr. Mongeau, the biggest challenge with this kind of roof—and I have worked in this area—is the weight of the snow. In the event of a heavy snowfall—we often get heavy snow in Ottawa and a foot of snow can fall, melt quickly and still be very heavy—is there a way to make it melt more quickly? Or could there be 60 cm of snow on the roof for four or five days with the potential to cause problems?

[Pierre-Marc Mongeau]

Thank you for your question.

The roof is reinforced. You can see in the model that, inside, there is a new series of columns, independent of the building, that will hold the roof up.

In terms of the weight of snow, the engineers we are working with are very well-regarded in Canada. The weight of the snow is always calculated when the roof is being designed. We have an independent structure, the roof is reinforced, as are the supports, and there are drainage systems for any water. The roof really is designed to accommodate the entire environment in which it will be built. It will comply with all the codes. It is not a problem for us at all.

[The Chair, NDP, Pat Martin]

Be very brief please, Jacques.

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

You said earlier that the work will be completely finished by 2017. That is what we want, given that 2017 is a very important year for Canada because it is the 150^th anniversary of Confederation. Will all of Parliament Hill be clear for the festivities, or will work still be going on? Could there be some downtime? A lot of people will be in Ottawa during that time.

[Pierre-Marc Mongeau]

We are aware that 2017 is an important year. For the buildings, the work is scheduled to end by the spring of 2017. The other work we are doing will allow us to have the frontage and the large lawn that connects the three buildings clear. Our objective is to have that area clear for 2017.

Work will still be going on, but we do not want it to obstruct the front of the buildings.

[The Chair, NDP, Pat Martin]

Thank you, Jacques.

For the NDP, we'll have Denis Blanchette.

[Denis Blanchette, NDP, Louis-Hébert, QC]

Thank you, Mr. Chair.

My thanks to our guests.

Can I talk about the costs? These projects represent a good deal of money , after all. At the public accounts committee, we have seen a major increase in renovation costs for the West Block. I see your defensive move on page 14. I understand it. You were expecting this question, of course.

I would like to understand how the costs evolved. How is it that, under the heading “West Block Rehabilitation”, there is a whole other building? In “Completed Projects and Leases”, what is really for the West Block and what is for other projects? How is it that everything is wrapped up into one?

[Pierre-Marc Mongeau]

Your question has two parts: first about costs and second, from Public Accounts, about the amount of a little more than $1 billion.

If I may, I will deal with the cost management system first.

Costs have changed over time. It is important to understand that our process includes two major stages, planning and execution. Planning is what allows us to consider evolving needs and translate them into renovations to a building. In recent years, there have been changes of direction in the requirements we have to deal with. It bears saying that this project began around 1997. It had been in the works since 1991, but I am talking about the West Block itself. The deterioration has increased over time, exponentially so every two or three years, especially the masonry. So the associated costs increase as well.

In addition, changes were made to the Building Code, especially in regard to earthquakes. There are more requirements in that area. So each time we do renovations, we have to make sure that we meet the requirements.

Since 2001, there have been a lot of changes in security rules. Events like those in 2001, among others, mean that we have to increase the level of security. There are new requirements for parliamentarians. It all drives up the costs.

[Denis Blanchette, NDP, Louis-Hébert, QC]

I am aware of all that, except that, as of 2005—I do not want to go back too far—the cost was under $800 million. That amount has now increased. So could you talk about what has happened recently? I have no problem with the rest. I would like to know where things stand at the moment.

[Pierre-Marc Mongeau]

That is a very good question, Mr. Chair.

The program you mentioned, the West Block program, includes projects that have been done in recent years as well as the project itself. If we calculate the amounts for the projects that have already been included, we can see the entire program in the public accounts.

Now, the program you mentioned, the West Block program that is currently underway—and therefore locked in—comes to $863 million. That is the amount I am evaluated on. Part of that amount of $863 million goes to construction contracts. It also includes consultants' fees and all the third parties we want to analyze things. We also include contingencies.

So the West Block renovation project will cost $863 million and will be finished in 2017. Other projects were added to it. For example, last year, the Sir John A. Macdonald Building project increased the amount of the program by $99 million.

There was also movement in the Clarica Building, for example. We had to vacate the La Promenade Building and sign new leases as a result. The costs of those leases are included in the program. We renovated the La Promenade Building and then moved people from the West Block to La Promenade.

That entire process is included in the program. We also had some obstacles to deal with. For example, the Southeast Tower was rehabilitated a few years ago because we could not wait for the approval of the entire major project that we are talking about. The tower had serious problems. The masonry work was falling off and the foundations were not solid. So we had to step up the pace. We got that project going more quickly. So it is not part of the $863 million, but it is part of the $1.1 billion.

It is just a question of managing various projects.

Mr. Chair, if the committee so wishes, I can give you the exact list of projects included in the public accounts amount.