Public Accounts Committee on Oct. 31st, 2023

[Lorenzo Ieraci]

I have seen the picture you referenced before, sir. That's the picture I have seen. I have not had a chance to visit as of yet.

[Jake Stewart, Conservative, Miramichi—Grand Lake, NB]

Is there anything you can tell us about the $8-million barn that nobody else knows but the two of you? Is there anything you can inform us about? I asked you about contracts. You didn't know who got them. You knew that it was flexible, with less scrutiny than normally.

What has the Treasury Board done to make certain this aligns with government priorities?

[Brian Gear]

Mr. Chair, as I've explained in the past, the corporate plan outlines the major activities undertaken by the NCC, or that they are planning to undertake. That plan was checked to see whether it was in line with the mandate of the Crown corporation and broader government priorities, and whether or not it was financially sustainable. As I said, we do not detail it project by project within corporate plans. There's a reason for that: so it respects the independence of the Crown corporations to manage their funds and budgets, in line with their own individual business requirements.

[Jake Stewart, Conservative, Miramichi—Grand Lake, NB]

Thank you for that.

The Treasury Board is perfectly fine with it and feels it's a good expenditure that meets targets.

Is that what you're saying here today?

[Brian Gear]

Again, the corporate plans are submitted by the responsible minister to the Treasury Board for consideration.

[Jake Stewart, Conservative, Miramichi—Grand Lake, NB]

With all due respect, there are no responsible ministers, as we've seen over and over dragged out through this committee.

At any point in the project, did anyone in the Liberal government stop to suggest that maybe $8 million is too much to spend on a barn? If you want me to call it a storage shed, I will. I have one of those. It's not heated. It doesn't have Internet capabilities. It does have electricity. You can turn a light on in there. It certainly isn't worth $8 million.

Did anyone ever stop to think that was too much money?

[Lorenzo Ieraci]

I think the question you asked is whether the government did.

Again, I think the National Capital Commission could let you know what information it provided during its work. As I indicated before, from an overall perspective and a corporate planning perspective, these are not detailed.

[Jake Stewart, Conservative, Miramichi—Grand Lake, NB]

Was there no way to build a storage facility—an $8-million barn facility—at Rideau Hall for less than $8 million? Should it have cost $8 million?

[Lorenzo Ieraci]

Again, the National Capital Commission will be able to provide you with more answers. My understanding is that—

[Jake Stewart, Conservative, Miramichi—Grand Lake, NB]

Thank you for that.

I'm curious to understand your opinions on the $8-million barn. Clearly, you're worried about a few processes. There's no accountability. I don't feel like there's any accountability for the $8-million barn.

The public cannot understand how an $8-million barn, laced with private security, despite it being the most protected property, likely, in the city and maybe in Canada.... It already has RCMP and parliamentary policing. They had a private detail outside during the construction phase. They have an elevator and nobody knows where it goes. It costs $8 million—

[The Chair, Conservative, John Williamson]

Thank you, Mr. Stewart. That is your time, I'm afraid.

Mrs. Shanahan, you have the floor for five minutes, please.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Thank you very much, Chair.

Let me start by thanking the witnesses for being here today.

We can see that you are doing your best to answer questions that, frankly, are not in your purview. The committee is looking forward to receiving Mr. Tobi Nussbaum, the CEO of the National Capital Commission, when he gets back from vacation. He is the one who will be properly able to answer these questions. We can ask our questions at that time.

At the same time, it is educational for all members of the committee to get a better understanding of how the lines of accountability work. I appreciate some of the answers you gave earlier concerning the fact that the NCC submits a budget, but it's up to them to do the operational part of it.

There's just one question I have concerning abatement. We know that when we're renovating existing buildings, very often there are problems. An environmental assessment has to be done. There are other issues that can arise that wouldn't arise with brand new construction.

Mr. Ieraci, in your experience, what are some of those measures and why would they cost money?

[Lorenzo Ieraci]

I mentioned that there were previous buildings there. Depending on the age of the building, there could be some abatement work that is necessary in terms of removing potentially hazardous materials. We know that some construction material that was used in the past is obviously no longer used, and it can be dangerous if it's not properly disposed of. From an abatement perspective, that would have been part of the preparation for the demolition work that had to be undertaken by the NCC prior to the construction of it.

I also understand that there was soil contamination in some of the soil around the buildings. That needed to be remediated. Obviously, that would have to be considered and included as part of the expenditures for the new building.

Those activities were undertaken by the National Capital Commission as part of getting the site ready in order to be able to do the construction.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Thank you for that.

Setting aside this project for the moment and speaking generally, what are the tools that PSPC uses to determine a fair price and do cost comparisons in a unique or stand-alone project? Can you give us some insight?

[Lorenzo Ieraci]

Is that from a departmental perspective in terms of the procurements we undertake, or some of the activities that we would do as a department?

I'm sorry. The reason I'm asking the question is that Crown corporations have different sets of rules from the ones for PSPC, which I'm not necessarily as familiar with. I just want to make sure I answer the question.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

It's for PSPC and where you see that there would be some commonality with Crown corporations. I'm going to get back to Crown corporations in a moment.

[Lorenzo Ieraci]

My colleagues from the procurement branch would probably be able to provide a more definitive response, but there are two approaches. One is that procurements are typically done on a competitive basis and, through the competition, there is an incentive for bidders to ensure that the price they're submitting is going to be competitive, to increase the likelihood or chances of their being successful on it.

In instances when there's something really unique, either because we're buying something that only one company has or because there's a specific geographic component, where what would be considered directed or sole-sourced contracts would come forward, within the department, we do have cost analysts who are able to undertake assessments of the proposed price to determine whether or not it represents fair market value in terms of what the company charges other preferred clients, and so on.

Within the department, there are some activities and initiatives we have to be able to take a look at the question of value for money, as it's more commonly defined.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Mr. Gear, I think you mentioned a couple of times that the NCC operates at an arm's length from the government. It's well known that prior to 2015, it was the minister at the time, John Baird, who personally controlled the NCC, but after 2015, that practice changed. Can you share your thoughts about why it's important that the NCC operates at an arm's length from the government?

[Brian Gear]

The decisions are made to set up Crown corporations, again, because of their unique mandates, responsibilities and activities. These unique mandates require a certain amount of flexibility in terms of their administration and management. For example, there are a number of Crown corporations that operate in a competitive environment, where there are certain sensitivities about what they can reveal and report, and there are certain limitations. That's a specific regime that applies to those types of Crown corporations.

In the case of the NCC, again, it has its own accountability structures and policies, with a board of directors that is accountable through the responsible minister to Parliament. The NCC then undertakes its day-to-day operations under the oversight of that board of directors.

There is reporting that is required of Crown corporations, so, as I mentioned, corporate plan summaries are submitted to Parliament. Annual reports are submitted to Parliament by the responsible minister every year. Also, there are a number of other reporting requirements that the Crown corporation undertakes through various other means, for example—

[The Chair, Conservative, John Williamson]

I'm going to have to stop you there, because we're well over the time, but I appreciate it. You're welcome to come back to that at a future opportunity.

Ms. Sinclair-Desgagné, you have the floor for two and a half minutes.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

Thank you, Mr. Chair.

I have little hope of getting any answers today, but I'll nevertheless ask my questions and give it a try.

The board of directors of the National Capital Commission approved the reconstruction project in the work area at Rideau Hall in 2019. The construction project was postponed at the request of the Office of the Secretary of the Governor General.

Does either one of you know why the work was postponed, if the barn was in such a state that so much money had to be spent?

[Lorenzo Ieraci]

Thank you for your question.

I unfortunately don't know the reasons why the National Capital Commission decided to suspend or delay the project. I apologize.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

I see.

Do you know whether “The Barn” is a designated heritage building?

[Lorenzo Ieraci]

That's a good question. I don't know the answer. I'd say it's probably no, since it's a new construction, but I don't have a definitive answer.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

It's stated on the National Capital Commission website that the entire Rideau Hall complex is designated as heritage property.

I'd like to know why you destroy a building in that complex and replace it with an expensive new building. Would you have any ideas about that?