Government Operations Committee on Feb. 14th, 2008

[Don Burns]

I don't think anyone would have that sort of crystal ball, but certainly the market values of the properties in Vancouver, such as the two buildings that were withdrawn from the sale, have been going up substantially over the years. I'm not sure if that was adequately reflected in the agreement.

[Charlie Angus, NDP, Timmins—James Bay, ON]

I think the issue is that the change in the market value of those buildings from 1983 to today has been astronomical. It's not just with the rise of inflation; it's just the rise of real estate. We haven't seen any phenomenal plunge of real estate prices in memory, so here we are anticipating that 25 years down the road the civil servants who utilize those buildings will be looking at properties that are probably amortized many, many times over what they are now.

The issue is that the numbers we get from the government are all based on this principle that it all goes to zero at year 25, as if we're not going to have thousands of civil servants needing to use those buildings. How are we going to continue to maintain buildings that we're paying for, to access, because they belong to us? That's my first question.

Second, we've already seen issues of owners taking over buildings that were public, and then the issues of lawsuits that have taken place over buildings and the difficulty the federal government has had in getting landlords to actually maintain the upkeep on these buildings. What assurances would you be seeking to make sure the taxpayer isn't going to be stiffed at the end of this to pay for the upkeep of buildings we no longer own?

[Michèle Demers]

You know, I think you should be seeking those assurances as representatives of the population.

Obviously we're looking at experiences here in Canada that are not positive experiences. We're looking at experiences in Australia, New Zealand, and that part of the country where they've realized it was a bad deal to sell off the government buildings and lease them back, so why are we repeating these errors of the Australian model? Why are we doing that?

[Charlie Angus, NDP, Timmins—James Bay, ON]

Here's my final question. We've looked at the sale of the buildings to Larco, but we know there's a phase two involving about 40 buildings. When you look through the list of those buildings, the audacity of this plan to give away, to sell off, federal buildings that are key assets for us as a country is breathtaking.

You say it's ideological; I think it's idiotic. It might be ideological, but it seems to me idiotic. I can't see the benefit to the taxpayer at the end of the day.

Is that the experience you've seen from Australia--that this was simply an ideological exercise in selling off public assets to anyone who came along and wanted to grab them up?

[Michèle Demers]

It was, and it was for a short-term gain. It seems to be the same situation here.

[The Chair, Liberal, Diane Marleau]

Thank you very much.

We'll go to Ms. Folco.

I want to remind you, though, that since the sale of the first, posted on the website of Public Works is the fact that there's a moratorium and they're not going to be moving forward on the rest of the buildings, at least at this time. I don't know exactly...but they are not moving forward on the sale of the balance of the buildings.

[Michèle Demers]

So far.

[The Chair, Liberal, Diane Marleau]

That's right. Anything can happen after that.

Madame Folco.

[Raymonde Folco, Liberal, Laval—Les Îles, QC]

Thank you, Madam Chair.

Ms. Demers, Mr. Burns, I would like to thank you for being here this morning.

The meaning and concept of the word “consultation” aren't the same for me as they are for my colleague Mr. Moore. Consultation, in my opinion, means that the individuals elected by the Canadian population have a responsibility, when they want to create a program, to go to the Canadian population and ask for their opinion. It's fine to consult Hansard and the minutes of this committee's meetings, but it was up to the minister and his officials to do that. In my view, they had a responsibility to go to you and to consult you, you and other organizations who are stakeholders in this affair. I find this extremely unfortunate, and this is a trend that we've noticed, in the House, with regard to government programs.

I also have a question to ask you. On page 5 of your presentation, you say that, according to a 2003 Statistics Canada study, public infrastructure lowers the cost of producing a given level of output in virtually every Canadian industry. I would like you to explain to me how and why. I wonder if that's the case, as Statistics Canada noted in 2003, if that isn't an indirect, or perhaps even a direct, consequence, of the management of businesses for the Canadian economy, since we know that there are thousands of Canadians involved in construction. Could you explain that to us, please?

[Michèle Demers]

In fact, that Statistics Canada study shows that all investment, every injection of federal government funding and every federal presence in a given sector has direct and indirect impact on the private sector. To a certain degree, the one completes the other. As regards infrastructure, this has that effect on the private sector.

[Raymonde Folco, Liberal, Laval—Les Îles, QC]

Can you be more specific?

[Michèle Demers]

I'm going to let Mr. Burns answer.

[Don Burns]

I'm sorry.

Could you repeat the question, please?

[Raymonde Folco, Liberal, Laval—Les Îles, QC]

I'll put my question in English because there is really little time, Mr. Burns.

Quickly, it has to do with the fact that when the government owns a building or builds a building or whatever, it has consequences on the building trade in general, the private building trade throughout Canada.

[Don Burns]

Yes, I understand. That's what the report has shown. When the government invests in infrastructure, the private sector reaps a benefit from that.

[Raymonde Folco, Liberal, Laval—Les Îles, QC]

Could you be specific on this?

[Don Burns]

If the government constructs a road, the private sector doesn't have to build a road to access their property. Therefore, they get a financial advantage from that. Anytime the federal government is spending money on infrastructure, there is a positive spin-off to the private sector that reaps a benefit from that, plus there is the obvious contract work and so on that they would gain from that.

[Raymonde Folco, Liberal, Laval—Les Îles, QC]

If I have enough time, I would like you, if possible, to give me an example that concerns buildings, because that's what we're talking about today, not roads.

[Don Burns]

Well, if the government builds a major--

[Raymonde Folco, Liberal, Laval—Les Îles, QC]

I'm just trying to understand better, that's all.

[Don Burns]

If the government builds a major building, the spin-off effects are that the employees who work in that building and the other private sector companies that are located around that do business with that government operation, so it improves their bottom line, I guess. It benefits.

We can have our analyst elaborate more on that particular issue.

[The Chair, Liberal, Diane Marleau]

Just for a short period of time.

[Denise Doherty-Delorme, Section Head of Research, Professional Institute of the Public Service of Canada]

Very quickly, again, an example is Saskatoon. Your federal government has put in highways to get to Saskatoon. Also there's the synchrotron there. There is now a scientific part there, so when private companies are setting up it's easier to track scientists. There are auditors. There are assistants, technical people. There is a critical mass. The private sector can access the building that's there. There are libraries. Everything that the federal government puts up the private sector can reap benefits from. So from every dollar that's spent on federal capital--just the building, the synchrotron, and the scientific part of it that's there--the private companies will get a 17% positive economic benefit.

[The Chair, Liberal, Diane Marleau]

Thank you.

We'll continue with Ms.—

[Raymonde Folco, Liberal, Laval—Les Îles, QC]

I asked you the question. I'd like to have more information from the witnesses.