Evidence of meeting #6 for Government Operations and Estimates in the 39th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was value.
A recording is available from Parliament.
4:20 p.m.
Conservative
Daryl Kramp Conservative Prince Edward—Hastings, ON
And besides their report, there are hundreds of pages of reports and evaluations that have been completed on this file now.
I have another point. You suggested that the properties could be worth even substantially more than the bidders think. My understanding is.... How many bidders were in this? Do you know how many?
4:20 p.m.
Chairman and Chief Executive Officer, Informetrica
I believe it was 11 or 13, or something like that, in the final analysis.
4:20 p.m.
Conservative
Daryl Kramp Conservative Prince Edward—Hastings, ON
So if this property is worth significantly more, somebody is going to want to pay more, wouldn't you think?
4:20 p.m.
Chairman and Chief Executive Officer, Informetrica
I wouldn't be surprised, if you had access to all the bid documents, that you would find residual values that are higher from some of the bidders.
The overall package is such that Larco presumably came in higher. We don't know that, but we—
4:20 p.m.
Conservative
Daryl Kramp Conservative Prince Edward—Hastings, ON
My understanding is that obviously it was a “highest bidder” process and that Larco was the highest bidder. But of course when we have them here we could certainly ask them.
4:20 p.m.
Chairman and Chief Executive Officer, Informetrica
It may have been that they were willing to take all the properties and that this made them an attractive thing, too, because it costs the government about $10 to write a cheque.
4:20 p.m.
Conservative
4:20 p.m.
Chairman and Chief Executive Officer, Informetrica
Our scope was to take the numbers as made available and to do an analysis as if we were buying or selling it, from the government's viewpoint.
So our analysis was based on whether this was a good deal from a benefit-cost framework for government. Would you go out and raise money this way? That's essentially the question we're answering. The answer we came back with was no, not unless you got a value of something close to $2 billion for these nine properties. If you got something more like $1.7 billion, $1.6 billion--
4:20 p.m.
Conservative
Daryl Kramp Conservative Prince Edward—Hastings, ON
Are you assuming that the government, at the end of this period, would buy it back, or not? Have you assumed one way or the other?
4:25 p.m.
Chairman and Chief Executive Officer, Informetrica
Whether they would do what?
4:25 p.m.
Conservative
Daryl Kramp Conservative Prince Edward—Hastings, ON
Have you assumed that at the end of the lease period the government would definitely buy it back, and what the terms would be, or that they would not? Did you come to a conclusion?
4:25 p.m.
Chairman and Chief Executive Officer, Informetrica
We had put a residual value, the government exercising their option at that price, per the formulas contained in the lease.
4:25 p.m.
Chairman and Chief Executive Officer, Informetrica
If they did not, then they would, of course, not own the buildings after that 25-year period. The issue would then be what happens after that period.
4:25 p.m.
Conservative
Daryl Kramp Conservative Prince Edward—Hastings, ON
But do you believe the continued operation of public property by public administration is the only way to go?
4:25 p.m.
Chairman and Chief Executive Officer, Informetrica
It certainly is a way that we have established as a major tradition in Canada, particularly if in this case you're saying we need it for at least another 25 years, and we're prepared to enter into a firm lease agreement for that.
If what they were doing was releasing the property, then that's a different story.
4:25 p.m.
Conservative
Daryl Kramp Conservative Prince Edward—Hastings, ON
Are you aware that Public Works leases 43% of their buildings now?
4:25 p.m.
Chairman and Chief Executive Officer, Informetrica
I'm aware that they do lease a lot of property, yes.
4:25 p.m.
Chairman and Chief Executive Officer, Informetrica
Okay, it sounds good.
4:25 p.m.
Conservative
Daryl Kramp Conservative Prince Edward—Hastings, ON
My understanding is that this would take it up significantly, to 47%.
I have no more questions.
4:25 p.m.
Chairman and Chief Executive Officer, Informetrica
It's the first phase you're talking about, not the second--43% to 47%? Just these seven buildings, or the nine?
4:25 p.m.
Conservative
Daryl Kramp Conservative Prince Edward—Hastings, ON
I may have just one other question, if I have that 30 seconds.
