That is a very good question.
For either buildings or land, Treasury Board policy always requires that they be leased at a price that corresponds to the market value. We therefore have an entire team that assesses the market value in a particular location. Then we negotiate, particularly when there is a single owner or there is not a lot of space.
Some of our commercial leases are negotiated by mutual agreement, directly with the owners. It is commonly the case that for the kind of space required and the market where the desired buildings are located, there are not enough owners and so there is no competition. However, we always produce a market analysis report and retain third parties in the private sector to determine the market value.