Government Operations Committee on April 24th, 2007

[David Marshall]

Yes, I am, Mr. Poilievre. We received three bids for this contract. The technical part was evaluated by five separate, individual evaluators, who did not talk to each other during the process. The financial part was evaluated by a lead evaluator and checked by a second one.

I was briefed after the process had progressed to a certain extent. I was not told who won the contract, but I asked my chief risk officer, since it was potentially a large one, to assure me after a review that all the proper processes had been followed; he did so.

The minister's office was informed in due course on March 14, much later, when it was getting ready to be sent over to Treasury Board.

I personally interviewed the evaluators, and they've assured me there was absolutely no interference from anybody, let alone the minister's office, so the evaluations were never changed.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

The minister wasn't one of the evaluators?

[David Marshall]

No, he was not.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

He wasn't in contact with any of the evaluators?

[David Marshall]

No, he was not. In my opinion, a fair and proper process took place, and the government should have full confidence in the result, as I do.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Did any of the evaluators complain about Minister Fortier's involvement in the contract?

[David Marshall]

Absolutely not, and I asked them that question point-blank.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

You did, and they said there was no involvement from the minister?

[David Marshall]

Absolutely not.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Okay.

On the issue of the banks that have been retained to help the government pursue these real estate transformations, was the minister involved in the process of selecting the banks?

[David Marshall]

No. Once again, he had absolutely nothing to do with it. We had an independent committee. The invitation was published on MERX. In fact, not only banks applied; the accounting firm of KPMG also applied and was qualified and received an evaluation as well.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Did the minister have any part in selecting the committee that chose the two banks for the real estate study?

[David Marshall]

No, he did not. We asked him for suggestions for qualified people and we made our own selection of the committee.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Okay.

Minister, regarding the transformations that you are proposing to the government's real estate portfolio, can you tell us a little bit about the plans that had been in place that you learned about from the previous administration? Were they as ambitious as your own or were they more ambitious than your own?

[Michael Fortier]

I am afraid of using the word “ambitious”, because where I come from, “ambitious” has a positive connotation. I'll just say this—

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Were they more sweeping in scope?

[Michael Fortier]

They were certainly.... The ambit of the study that was being proposed that failed actually covered the entire portfolio. The request for proposals, the RFP, was several hundred pages long. I went through it, and if it had been successful, it could have led to a real estate investment trust for the entire portfolio.

Obviously that didn't go ahead because the whole thing collapsed because it was far too complex, but my conclusion was that in terms of the number of buildings and assets, there would have been many more of them involved in a privatization than we're considering at the current time.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

So you were not in favour of the previous administration's plans to privatize almost all of the assets, the real estate assets of the government?

[Michael Fortier]

No, and I'll tell you why. Out of those 350, 360 buildings, they're not all office buildings. Some of them have other usage, if you want, and they're not necessarily of interest to the private sector.

I think that if we focus on the office buildings, which is what we're doing right now, that is a much more logical and efficient way forward in terms of transferring some of the risk to the private sector.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

The procurement of goods and services is another matter altogether. Were there objectives and planned savings set out in the previous government's financial plan ever achieved?

[Michael Fortier]

Are you talking about procurement?

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Yes.

[Michael Fortier]

I have already expressed my opinion on this to the committee. I believe that the figures that were put forward following studies carried out in 2004-2005, with all due respect for those who did them... When we hired consultants, rather than asking them to explain the various avenues that could be taken, we asked them to verify the figures, like we did with the real estate portfolio. Clearly, this had not been done with regard to procurement and, as a result, unfounded figures were being used.

This is something that I know because, since becoming minister, I have spent a lot of time with Mr. Marshall and his team trying to assess how much we could save with regard to procurement. Mr. Marshall and his team, together with Treasury Board, have worked very hard. Their work over the last year has allowed us to quantify exactly how much we could save.

[The Chair, Liberal, Diane Marleau]

Thank you.

Ms. Nash, it's your turn.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Thank you, Madam Chair.

Good afternoon, Minister, and welcome to the other witnesses this afternoon.

I'd like to go back to the real estate issue, and of course you've discussed that with the committee before. We had asked you about it, and at that point obviously the arrangement wasn't as far along, so it was just in the works. It sounds now as though the decision has been made to sell these buildings and that is going to move ahead. Is that correct?