Government Operations Committee on April 1st, 2008

[The Chair, Liberal, Diane Marleau]

Will you answer his question or not?

[John Baird, Conservative, Ottawa West—Nepean, ON]

I'd be happy to. Could I have some time?

[The Chair, Liberal, Diane Marleau]

Answer it.

[John Baird, Conservative, Ottawa West—Nepean, ON]

Great.

I consulted lawyers, we looked at the contract, and it clearly stated that there was a 60-day extension if the federal government had not signed on to the contribution agreement. So it allowed 60 days, and we availed ourselves of that 60-day period.

I was looking at the contract for one simple—

[Mark Holland, Liberal, Ajax—Pickering, ON]

Did you talk to the city? It's just a yes or no question.

[The Chair, Liberal, Diane Marleau]

Thank you.

[Mark Holland, Liberal, Ajax—Pickering, ON]

Did you talk the city—

[John Baird, Conservative, Ottawa West—Nepean, ON]

Before we made our announcement, we—

[Mark Holland, Liberal, Ajax—Pickering, ON]

Before you made a public—

[John Baird, Conservative, Ottawa West—Nepean, ON]

Yes, we did contact the city beforehand.

[Mark Holland, Liberal, Ajax—Pickering, ON]

Okay. That's not what they said. That's interesting.

[The Chair, Liberal, Diane Marleau]

Thank you.

The time is up for both of you on this round.

Thank you very much, Mr. Holland.

We will go to Madame Bourgeois.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Thank you, Madam Chair.

Good morning, Minister.

Firstly, I would like you to state whether you agree with me that the management of a city is the responsibility of its municipal councillors, duly elected by its residents.

[John Baird, Conservative, Ottawa West—Nepean, ON]

Indeed.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Would you agree with me that the light rail transit project was a major issue for Ottawa in 2006?

[John Baird, Conservative, Ottawa West—Nepean, ON]

Absolutely.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

City officials, including the City Manager, a city lawyer and a former director of the City of Ottawa's Economic Development and Strategic Planning Branch, told the committee that it took three years to develop the project. They analysed the project and submitted it to the Department of Transport and other departments, who approved it. They also told us that the project did not run over budget and that it had received Treasury Board approval.

After municipal officials and duly elected councillors had followed all of these steps, why did you suddenly decide to change the rules of the game and interfere in this matter? Were there serious grounds for doing so?

[John Baird, Conservative, Ottawa West—Nepean, ON]

I can tell you that the decision Treasury Board made was the one that was announced publicly. So when you say Treasury Board supported the project as is, that's not the case.

You had mentioned that the project had been working with the federal government for some 36 months. That's about 150 weeks. That is certainly the case. I believed that it was wrong to approve the project 33 days before people voted, and that if it had been working 150 weeks with the federal government it could go for another 33 days. The contract specifically allowed for a 60-day extension, and I thought this was wise.

I can remember the decision made on the eve of an election back in 1993 with respect to Pearson Airport and the EH101 helicopter project, which led to billions of dollars of problems when the new government took over. I thought if it had been going on for 150 weeks it could certainly be postponed for 33 days. The contract the city had signed specifically allowed, if the federal government had not signed a contribution agreement, a 60-day deferral. I saw no reason to go against that.

When I read the contract there were many, many portions of the project that were not funded. You said there were no cost overruns. Of course, there had been no shovel in the ground yet, so there couldn't have been cost overruns to a project that hadn't started. But there were many areas in the project that were not funded.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

What I find surprising is that it seems, according to the information that we have available, that a number of departments had analysed both the technical aspects of the project and the possibility of it running over cost before submitting it to Treasury Board. It was your own department that approved the decision to grant the $200 million.

I am not questioning your integrity, your intelligence or your understanding of your files, but do you not find it strange that a minister suddenly finds fault with a contract, and decides to cancel funding for a light rail transit project, right in the middle of an election campaign where the said project is a major electoral issue?

[John Baird, Conservative, Ottawa West—Nepean, ON]

I'm happy to correct the record. You said staff in my department are the ones who have to approve the project. That is not the case. Under the Financial Administration Act, it's required to go before a group of elected ministers, members of the Treasury Board. Treasury Board itself is composed of six cabinet ministers who are ultimately responsible for approving the project. So the project is not approved by the secretariat. By law it is required to go in front of ministers for a decision.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Excuse me...

[John Baird, Conservative, Ottawa West—Nepean, ON]

You say that the minister “showed up”. In fact, it is law that it has to come before me and the other five members of the Treasury Board for a decision. So it was not an issue we inserted ourselves in. It is actually one that by statute we are required to approve.

[Diane Bourgeois, Bloc, Terrebonne—Blainville, QC]

Your staff recommended that you approve it. The $200 million funding envelope had been approved; the City of Ottawa had begun negotiating contracts. What I am struggling to understand, Minister, is why you personally decided not to release the $200 million when officials from various departments had recommended that Treasury Board approve it? Do you not think that this was an unfortunate decision and one that could be viewed as interference?

[John Baird, Conservative, Ottawa West—Nepean, ON]

It in fact wasn't me personally who made the decision; it was a unanimous decision of the Treasury Board to...not as you said. The decision was to approve the project, just requiring that the new city council in 33 days signal their support for it. They, at the end of the day, would be on the hook for the cost overruns, for all the unfunded portions of the project. I read the contract. There are significant amounts of the project that are not funded.

I can tell you that it was not my choice to decide when this came before the board; it was when it was submitted. I found the world as I found it; I didn't choose that it come before the board at this time. It's been going for 150 weeks. It certainly would have been better for it to come before the board not during an election campaign.

We did not put an end to it. It was approved and it did have 33 days.

The board is the ultimate decision-making authority for spending within the federal government. It is not up to the officials to make that decision. At the end of the day, the buck stops with me, with the members of the Treasury Board, as to whether the project would get the green light. It is explicitly our responsibility and not that of the unelected officials within the department to make those decisions.

[The Chair, Liberal, Diane Marleau]

Thank you very much.