Government Operations Committee on Dec. 10th, 2007

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

So you have not met.

[Michael Fortier]

That's right. That's why I answered your question by saying—

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

Excellent.

[Michael Fortier]

—that we do not meet with him, nor does my staff.

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

Thank you.

[The Chair, Liberal, Diane Marleau]

Thank you.

We'll go to Mr. Holland again, for five minutes.

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

Thank you, Ms. Chair.

I want to come to the issue of transparency. This committee had a great deal of problem in getting documents with respect to the sale of nine buildings, and now seven buildings. In fact, it was my colleague Garth Turner, when he was on this committee last spring, who requested the confidential memorandum, along with a raft of other documents. These documents weren't given to us until Wednesday of last week, at our last meeting. In fact, there were still details missing, specifically in regard to Larco's financing.

We had asked for information on where their financing is coming from. I know you were talking about Larco being a Canadian company, but we don't know where its financing is coming from. Can you provide that information, and can you tell us today where that is originating from?

[Michael Fortier]

I think how they got financed was actually in the paper. I read it in the Globe and Mail, so I would suggest that you ask one of your staff to just punch in “Larco”.

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

With respect, Minister, we've been requesting this information for some time.

[Michael Fortier]

No, you have not.

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

Yes, we absolutely have been.

[Michael Fortier]

When I came before committee, you're right that Mr. Turner asked. At the time, we hadn't made a decision on who had won the deal, so it couldn't have been when Mr. Turner was there, Mr. Holland.

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

I'm saying that we asked numerous times for that information. I'm just simply asking you if you can provide it.

[Michael Fortier]

I'll let François answer, but to me this is a private transaction between them and their banks.

[François Guimont]

There are a number of other documents that have been asked for by the committee, Madam Chair. We had a discussion with my staff, and together with the minister's office, we want to be as open as we can vis-à-vis the request. That request represents 2,000 pages, and they're being translated as we speak on a priority basis.

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

We appreciate that. The concern, of course, is that the information is coming in dribs and drabs. In fact, even though it had been requested the previous spring, the majority of it didn't arrive until last Wednesday.

Because my time is limited and I only have five minutes, I want to talk about heritage buildings. I have a particular concern with a question that Mr. Moore had asked about Larco.

Minister, you have exalted the virtues of Larco, and I'm not taking exception to that except in regard to one area, and that's heritage. I didn't see you mention that as a caveat.

We just saw the Graham House demolished in Vancouver. It was designed by Arthur Erickson. There was an enormous amount of outrage about that.

Given the fact that phase two is not cancelled but is simply on hold at this point in time, and that there are a number of federal heritage buildings, I want to know what types of assurances we would have in dealing with these matters; that heritage properties would indeed be protected; and whether or not you have any concern with the way Larco has handled this building, the Graham House, which was designed by Arthur Erickson and was considered by many to be a very significant piece of natural architecture.

[Michael Fortier]

I'll comment on the seven buildings, if you don't mind.

With respect to heritage, we have contractual provisions between us and them. I think it's a covenant on their part, and if they breach that covenant, we obviously have all the benefits of seeking retribution. We have actually built this into our contract with them. Basically, they need to protect and guarantee that the heritage status, an identity of the buildings that have had that status among the seven, will be maintained. That is already in the contract between us and Larco.

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

I know my time is tight, so if I could, I'd like to move to operating costs.

One of the claims that was made in the document that justified this leaseback was that the private sector was going to be able to deliver a 20% improved efficiency through operating costs. This is even though the private sector is already operating buildings that are under federal ownership. I'm wondering how the private sector can improve on something that has already been managed by the private sector.

[Michael Fortier]

I don't like to quote other people, but the 20% line actually comes from a Toronto Board of Trade speech made by your own colleague Scott Brison on September 21.

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

I don't have a problem. I'm just asking—

[Michael Fortier]

I never said 20%.

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

Okay, so you take exception to that.

As I understand it, that's an assumption built into the document; that's an assumption built into this particular deal.

[Michael Fortier]

What I take exception to is basically Canadian taxpayers owning so much in terms of bricks and mortar—particularly in office building space—and then always holding the bag at the end of a 25-year period. We've transferred ownership risk to the private sector. Even in the private sector, if you look at the major Canadian banks, Mr. Holland, except for their branches, which obviously are very strategic, they've all transferred their high-rise buildings. In downtown Toronto, Montreal, and Calgary, even the banks—for-profit companies—don't own them anymore, because you need to be in that niche to actually make something out of it. We are certainly not in that niche, we're not in that zone. This is why we undertook this transaction.

[The Chair, Liberal, Diane Marleau]

Thank you very much.

Ms. Bourgeois, you have the floor.

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

Thank you Madam Chair.

Mr. Minister, since I do not understand this very well, could you provide me with the real figures? You signed a lease with Larco. I imagine the lease is up for renegotiation in five years, unless that has already been established?