Government Operations Committee on June 8th, 2006

[Mike Wallace, Conservative, Burlington, ON]

Thank you very much.

[The Chair, Liberal, Diane Marleau]

Thank you.

Ms. Nash.

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

Thank you.

Good morning, Mr. Fortier, to you and to your team. Thank you for coming this morning.

I have a couple of questions. The first one is about procurement in general. You have stated as your goal--and I think it's a goal Canadians support--getting a grip on the costs and getting the most efficiency possible--the best acquisitions, the best purchases possible for our tax dollars. Canadians work hard for their money, and they want to make sure it's spent as wisely as possible.

My question is around domestic or North American procurement. I appreciate that we do want to get the best value for our dollar and that we are also bound by trade agreements. Can you tell me, within the confines of those two areas, and perhaps other confines, is there any weight given to domestic production? I feel that when we are procuring domestically, we're obviously keeping people employed; we're supporting their families; there are tax dollars that get paid back to the government; there are a lot of spinoff benefits from domestic procurement. Can you tell me if this is a factor within our overall procurement policy?

[Michael Fortier]

As you stated in your question, we are bound by several trade accords. I thought the deputy was going to give me a piece of paper giving me the breakdown between what one would call non-Canadian purchase versus Canadian purchase. I know I've asked the question in the past; I know I had the answer, but you'd be surprised at how little non-Canadian purchases are. Most of the buy actually takes place north of the 49th.

Obviously some of the buy is with Canadian affiliates of U.S. companies, but I think it's fair to say that a large percentage of our procurement is with Canadian-based companies. Isn't it, Mr. Marshall?

[David Marshall]

That's correct. It is.

In cases of very large purchases like military procurement, for example, we are obliged to buy in Europe or in the United States because the equipment is manufactured there, but we work very closely with the Department of Industry to ensure that an equivalent amount of money is spent with Canadian businesses. These are called industrial regional benefits; you would have several billion dollars of that kind being procured by these companies like Boeing and others within Canada, and to assist Canadian industry, so we're very conscious of that.

[Michael Fortier]

Obviously the military is different. I view these large tickets as.... It depends how we want to do this and it depends what we want to buy, but if you exclude--

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

Sometimes military equipment is not built here in Canada, so you really have to get it someplace else.

[Michael Fortier]

Well, that's it. We used to have a very robust and vibrant defence industry several decades ago. Unfortunately, we lost that, but if you exclude those large tickets, a very large majority of our buy is here in Canada. It's de minimis what isn't.

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

Just out of curiosity, is this a policy decision, a policy requirement, or is it just seen as good for the country--a kind of nation-building exercise?

[Michael Fortier]

No, we're just following the rules. Basically anybody--an Australian company could bid today on anything we have on our screen.

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

Do I still have...?

[The Chair, Liberal, Diane Marleau]

You still have about four minutes.

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

Excellent. My other--

[The Chair, Liberal, Diane Marleau]

You don't have to use it all up.

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

Are you kidding?

My other question is similar to Madame Thibault's question around the greening of our government operations. Because the government is such a large property owner and property leaser, what are we doing to invest in retrofitting these properties to ensure that they are as energy efficient as possible?

[Michael Fortier]

That's a very good question. As an example, this week I opened, officially, the roof at the top of the C.D. Howe Building. The roof needed to be redone, and it was redone with the greening in mind. I'm not an expert on how they did this, but they laid out a lot of soil and different types of materials, and on top of the building are a number of plants. These plants will help insulate the building from cold and warm weather, even those we don't own. We don't own the C.D. Howe Building; we're only a lessee.

When we're a large lessee in a building and we're aware that the landlord is about to do major work, or if we own a building and there is significant retrofit required, we put the policy in place; we use the opportunity of investment having to be done, capitalization having to be done to the building, to put into place our greening policy.

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

All right.

Do you foresee any acceleration of that, or any desire to intensify the kind of work that had been planned previously? Given the heightened concern about the rise of greenhouse gases in Canada, are there any plans to intensify?

[Michael Fortier]

We can't force landlords to make changes. Where we're a large lessee renewing a lease, obviously we've got some leverage, so as I said earlier, that's when we'll use the leverage.

When we own buildings.... Some of the buildings in our portfolio are not young. The average age is 43 years, so many of those buildings require investment. We are looking at this, and as we retrofit buildings--not just the roofs, but looking at energy savings of all sorts--we will make those investments.

[The Chair, Liberal, Diane Marleau]

Mr. Proulx, over to you.

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

Thank you, Madam Chair. Good afternoon, Minister, and welcome.

Good morning, Mr. Marshall. I thank you and your colleagues for coming in so early this morning.

Minister, we spoke to you briefly a little earlier about the transaction involving the former campus of JDS Uniphase, a property of Minto Developments Inc.

Could you tell us how that transaction, or the idea of that potential transaction came up in your department after the election on January 23 of this year.

[Michael Fortier]

In fact, I can't answer, because we're currently negotiating with the owner. Some aspects of the transaction obviously can't be shared with you.

However, to give you a good answer to your question, we have to go back a little in time. As you may know, the origin of this transaction goes back well before the 2006 election. I'd even say that it goes back to before the 2004 election. The people from Public Works Canada, the professionals directed by Mr. Tim McGrath, had their eye on this site. Like everyone else, we had knowledge of the problems the high tech sector had experienced in Ottawa and elsewhere, but especially in Ottawa.

So these people had established that this site might be interesting, since JDS Uniphase wanted to part with it, because things were not going as well as they previously had. Talks were held with JDS Uniphase more than two years ago, before the 2004 election. We talked about moving a unit. The talks didn't come to anything because of the negotiations with JDS Uniphase and because the unit in question didn't want to move, because that didn't suit them.

Subsequently, when there was talk of perhaps moving another unit to the same site, it was still available. It also suited that other unit. Consequently, Mr. McGrath's group began talks with the owners. However, there was change of owner after the end of the talks, which broke down. You should know that we're negotiating for the units, not for us. That unit didn't want to go there any more. However, in 2005, another service said that it might be suitable.

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

Pardon me, Minister, but I only have five minutes.

Tell me about how things have sped up since the election of January 23 last? I'll be more direct. What roles did Mr. Fred Doucet and Mr. Fred Loiselle play?

[Michael Fortier]

I'm going to answer your question. I think it's important that you know... When I arrived—

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

Mr. Marshall was here a few weeks ago. Unfortunately, I wasn't here, but I read the minutes. We received an explanation—

[Michael Fortier]

All right, I'll answer you.

I was sworn in on the 6^th. My first briefing on real property affairs was on March 1. At that time, I was told we were negotiating with the owner of that site. I simply let the people do their job. They're doing a good job and I'm going to let them to their job. When they present a finalized transaction to me for approval, I'll study it.