Government Operations Committee on Feb. 15th, 2007

[Michael Fortier]

As I said earlier, we made clear our case with respect to Canada. We do not accept the extraterritoriality application of U.S. laws to our Canadian citizens.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

I sense some frustration on your part, and you can probably sense it on my part.

Minister, Americans are our friends.

[James Moore, Conservative, Port Moody—Westwood—Port Coquitlam, BC]

[Inaudible--Editor]

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

I'm not addressing you, Parliamentary Secretary. I'm sure you'd like to be the minister, but you're not.

Minister, we have friendly relations with the Americans. Not quite a year ago, in June, after the Prime Minister recessed Parliament, over the next week he rolled out $17.5 billion of announcements of military procurement. Two days later, he flew down to the White House to celebrate President Bush's birthday. That's indicative of the friendliness of that relationship. In fact, he called him Steve and only the Prime Minister's mother and I guess President Bush dare to call our Prime Minister Steve. So that indicates a very friendly relationship.

The foreign minister invited the Secretary of State Condoleezza Rice. They spent an intense few days out on the east coast. They emerged, mind you, at a Tim Hortons.

What use are these friendly and cozy relationships should they interfere with our ability to stand up for Canada's sovereignty and Canada's rights under the charter? I would assume they'd be able to resolve this.

[Michael Fortier]

I'm not frustrated at all. I want you to understand I'm not. Maybe you're frustrated. You said you're frustrated. I think you're confusing a lot of issues. Maybe it's because you haven't had a chance to spend some time being briefed by what we do here at Public Works.

You're confusing what we do. You're confusing three things. As the government, we are buyers of goods, with the code of procurement in our relationship with a supply chain. You're confusing that with a contract we signed with Boeing to buy four aircraft and you're confusing the third thing, which is that Boeing has to reinvest in Canada, dollar for dollar that we give them, using their own supply chain of Canadian manufacturers. I think you're having difficulty understanding how these three circles work and I think you're being very —

[The Chair, Liberal, Diane Marleau]

Thank you, Minister. Thank you.

[Michael Fortier]

I'm sorry. I was going to help you, but —

[The Chair, Liberal, Diane Marleau]

We'll go to Mr. Kramp.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

Thank you again, Madam Chair.

My question is to the minister and/or perhaps to Mr. Marshall on this.

When purchasing military equipment, there are of course many approaches. Whether it's sole-sourcing, whether it's a phased approach, there are numerous approaches you might take when purchasing military equipment. What criteria do you factor in when deciding which approach to take? Could you give us an indication, whether it's ships or whether it's aircraft?

[Michael Fortier]

The type of asset doesn't really matter. Once a department has identified a need for itself, then we are approached, and there's a description of that need, whether it's a service or an asset. So a discussion takes place between my department and the department that needs to buy something.

We have folks in procurement who know a lot of the industries out there and the supply chain for each of these industries. So as a result of the specifications required by that department, we know there are a vast number of potential suppliers. We will issue an RFP and indicate what we're looking for and wait for people to come back to us.

However, if a specific department comes to us — it could be, for example, for vaccines — and says they need a vaccine that does this specific thing, and they know this vaccine is manufactured by only one company because of copyright or patents, then we will issue an ACAN, an advance contract award notice, because it's our belief, because of the professionals at Public Works — and we could be wrong — that there's only one company. We issue an ACAN, which is not a sole-source contract. It's an advice to the world that we're looking for a vaccine, and this is the vaccine we're looking for.

So if we're wrong and people say they produce that vaccine too — because in the ACAN we will say who we think that manufacturer is — they'll say they've got one of those. Then a process begins whereby we discuss with the other suppliers what this vaccine they are believed to have actually is. Then we either determine there was more than one and then issue an RFP so that the one we thought was the only one and the new guy face off or, if we can conclude there's only one guy, we start negotiating with that person.

[Daryl Kramp, Conservative, Prince Edward—Hastings, ON]

Thank you.

[The Chair, Liberal, Diane Marleau]

Mr. Rodriguez.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

Thank you, Madam Chair.

You said at the start that you had not made a decision about the buildings. Yet, listening to you and your colleagues, I get the strong feeling that the decision has been made. This is a personal opinion, but I don't think that you will wait too much longer before acting.

I also think that you are spending so much money here and there trying to nudge your far-right government toward the centre that perhaps you want to sell some buildings to avoid running a deficit or to make some cash in the short term. That might be true too.

If buildings were sold today and then rented, how would these transactions be booked? You sell them in 2007. Would there be, for example, an entry for $1.5 billion in 2007 and then unanticipated expenditures under rentals in the future?

[Michael Fortier]

Once a decision is made, I will be happy to explain its impact, if any, on public finance to you. At present, no decision has been made. So, we are talking about hypothetical situations. Your numbers mean nothing to me.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

It was in the media. Never mind the amount. According to you, it is public speculation, but ultimately, I think the decision has been made. We shall see.

[Michael Fortier]

I am going to talk from an accounting perspective. Buildings have a book value, just like your house. You sell it...

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

I would not sell my house and then rent it back. To me, that is not logical.

[Michael Fortier]

I am talking about accounting, whereas you are trying to make this political. I would be happy to talk to you about politics, but you were asking me about accounting.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

I was not talking to you about politics, come on!

[Michael Fortier]

There is no doubt in my mind!

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

Okay.

You issued a call for tenders in June to get strategic advice on this. Is this possible?

[Michael Fortier]

Not only is it possible, it is true.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

Right.

[Michael Fortier]

I don't know whether it was in June.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

No matter, it was sometime last summer.

Who won?