Government Operations Committee on June 8th, 2006

[David Marshall]

Well, yes, I think it's a matter of public record that it was Chuck Guité.

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

No, no, no. I don't believe you're correct. I believe Mr. Guité was under that individual and accepted instructions. Who served as executive director of the communications coordination services branch? Do you recall?

[Michael Fortier]

Which period are you referring to, Mr. Kramp?

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

I'm referring to the time of the infamous Mr. Guité escapade.

[David Marshall]

Maybe you could refresh my memory. My understanding is that it was Guité in charge of the communications branch, who then reported to the deputy minister, and then acted in ways we all are familiar with now.

I'm not sure. Is this a trick question?

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

No, it's not. I'm deeply concerned. Obviously you have a set of checks and balances in place, and you have a number of departments. I can understand one or two departments slipping by your watch, or whoever's watch at that particular time, but when you have a number of branches and a number of departments that all of a sudden fall under the responsibility of not their own mandate but simply a mandate, I find it most interesting that Mr. Guité would put all of that together.

[David Marshall]

Clearly the people who were authorized to put that under him did so. He was named the head of it, but clearly there were various actions taken by the minister, the deputy minister, and others to allow that to happen.

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

Okay, thank you.

Maybe I'll just totally change gears here. There are so many transactions that occur within your department--literally hundreds and thousands, potentially millions, I suppose. With the invoices that flow back and forth and the checks and balances, could you tell me what kind of a system you have, or whether you have a system, to ensure that there has been delivery of a product before the cheque is issued or cut for that? In other words, have there been instances in which a product has not been delivered and yet payment has been made? Are you aware of any instances of such, or is that basically under control?

[David Marshall]

There is a very sound system of control to ensure that under the Financial Administration Act any officer who is receiving goods must certify the goods were received before payment can be processed. This is called certification under section 34.

The things that Public Works buys for itself to maintain buildings or other things are certified by its own officers in that way. The things that are being delivered to other government departments must be certified, with invoices passed to their finance officers to pay. So that is definitely a control there.

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

So you're confident there's a good set of checks and balances now in place? Or does there need to be work done on this?

[David Marshall]

There is a good set of checks and balances. We do check it and audit it from time to time to see it's working, yes.

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

So you do run interval audits at least?

[David Marshall]

Yes.

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

Thank you very kindly.

If I have a moment left, I'll split my time with Mr. Warkentin.

[The Chair, Liberal, Diane Marleau]

Thank you. You're done.

Monsieur Proulx, go ahead, please.

[Marcel Proulx, Liberal, Hull—Aylmer, QC]

Thank you, Madam Chair.

Minister, I'd like to ask Mr. Marshall or Mr. McGrath what the construction or leasing costs are for Public Works and Government Services per square metre or square foot on the Ottawa and Quebec sides of the Ottawa River. There is a difference, since real estate values are not the same.

[Michael Fortier]

Tim, can you take that one?

[Tim McGrath]

Actually the cost of construction, Madam Chair, is very similar on both sides of the river. What's different is the price of land. The price of land differs between the two sides of the river, but the construction costs are very much the same. This does translate into lower rental rates on the Quebec side, so generally there is anywhere from $2 to $3 a square foot difference between the two sides of the river.

[Marcel Proulx, Liberal, Hull—Aylmer, QC]

How much would the total value of that difference be? If we're talking $2 or $3 on a $5 price tag, it's very important. But if we're talking about a $2 or $3 difference on a $2,000 price tag, it's very different.

[Michael Fortier]

What's the average that we pay per square foot ?

[Tim McGrath]

It depends on the building. It depends on the location. On the Ontario side, we pay around $295 a square metre; on the Quebec side it's around $270 a square metre. I should point out, though, that on the Quebec side we represent 80% of the market. We basically take every piece of inventory available to us. On the Ontario side, we're less than 40% of the market. So we like to lease on the Quebec side.

[Marcel Proulx, Liberal, Hull—Aylmer, QC]

Minister, there is one issue that somewhat troubles small and medium enterprises. I'm not criticizing Public Works for using more cost-effective management methods, but at some point you have to be a little fairer with small and medium business enterprises.

For example, under our government a few years ago, what was called the bundling policy was introduced at Public Works. Suppliers were asked to provide goods and services across the country. For example, there are a host of small computer services contractors in the region, on both the Quebec and Ontario sides, that sell services to the Government of Canada. If we did a bundling and told computer service suppliers that they had to be able to serve all of Canada, we would eliminate a number of players.

I'm told that Public Works is currently considering adopting a very similar policy for the supply of goods. Let's take the example of furniture. They would tell contractors that, to supply furniture to the Government of Canada, they would have to be able to supply all the furniture that Public Works would want to buy. Of course, from a management standpoint, that's easier for Public Works in that it has a single supplier and a single series of invoices.

If that's really what your department is contemplating, that troubles me. I'm citing the example of furniture, but I'm not sure there are any furniture manufacturers in Quebec or elsewhere in Canada that would be able to supply the department with all the furniture that the Canadian government might need across Canada.

Minister, could we hear the comments of your officials on that subject?

[Michael Fortier]

I'm going to answer you briefly.

Earlier, I said that we would soon be issuing 34 or 35 major calls for tender for goods.

[Marcel Proulx, Liberal, Hull—Aylmer, QC]

For what you call commodities?

[Michael Fortier]

Precisely, but for all kinds of items. But, as I said earlier, there will also be regional calls for tenders aimed at companies that are not located in the Ottawa-Montreal-Toronto triangle.

Your question is an interesting one. As Ms. Marleau knows, in this department, we always have to be concerned about getting the best price for taxpayers, but we also have a responsibility to ensure that there is a mini-industrial policy behind the $19 billion that we've been spending on average for the past five years. That's important for us, first, because it's the money of all Canadians, not just those who live in the triangle I just referred to, but also because it makes sense because we want to reach small and medium enterprises.

So two policies apply, one of which helps the Government of Canada save money, because the call to tender process will much more rigorous. So there will be national calls for tenders, but there will also be regional calls for tenders.

I turn the floor over to Mr. Marshall.