Government Operations Committee on Dec. 10th, 2007

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

We are talking about something that is not entirely up to date and they give us net figures.

[Michael Fortier]

On page 28 of the Deutsche Bank document, entitled Valuation summary, they used several valuation methods, which can be found in the “Method” column, and they are presented based on experience with similar things. In other words, an office building is an office building. Even if we do not own it, we know the worth of a 14-storey office building, with a surface area of 100,000 square feet, located in downtown Ottawa, which was built in 1974 and is in a given state.

Do you agree?

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

Yes, absolutely.

[Michael Fortier]

That was their basis. Also, they said that these are hypotheses. PWGSC also makes hypotheses. Based on these hypotheses, they present the valuation methods found on page 28.

Are we out of time?

[The Chair, Liberal, Diane Marleau]

We will continue with Mr. Nadeau, who is anxious to ask a question.

[Richard Nadeau, Bloc, Gatineau, QC]

I have heard that the federal government owns about 4,600 buildings.

[Michael Fortier]

Four thousand six hundred buildings? I hope not.

[Richard Nadeau, Bloc, Gatineau, QC]

How many are there, approximately?

[Tim McGrath]

Across all of government, but Public Works has around 370.

[Richard Nadeau, Bloc, Gatineau, QC]

There are 370 if we are talking about PWGSC, but for all of Canada, the number is higher.

[Tim McGrath]

It's over 20,000.

[Richard Nadeau, Bloc, Gatineau, QC]

As you said, Mr. Fortier, the Canadian government does not have the mandate to manage buildings. We just sold seven of them. Should the government sell all the buildings? If seven buildings will be managed by someone else or will be sold and we will become tenants, would it not be logical to sell all of our buildings because it is not our specialty? Accordingly, these buildings should be managed by private companies that specialize in this, and the government would then sign agreements with the private company.

Would it go that far? If not, why is it good to sell seven buildings and keep thousands of others?

[Michael Fortier]

I should not tell you this, but if were starting a nation, starting a country today—

[Richard Nadeau, Bloc, Gatineau, QC]

You can tell me. I am very open-minded.

[Michael Fortier]

If we were starting a country and had no buildings, if we were starting with a blank page, I do not think we would immediately start buying buildings. We would find space for our public servants, as we did. Nearly 50% of our public servants work in buildings that do not belong to us. This is not a bad ratio, but I think that is not what we would aim for if you and I were starting over.

However, we are not starting with a blank page; we have several decades behind us. We started with nine buildings, and this number is now seven. As I told Mr. Holland earlier, it is a transaction. We will take it in, analyze it and examine it. For now, we are not planning on making any more transactions. This is what we wanted to do under the circumstances.

[Richard Nadeau, Bloc, Gatineau, QC]

Thank you very much.

[The Chair, Liberal, Diane Marleau]

Thank you very much.

Mr. Dewar.

[Paul Dewar, NDP, Ottawa Centre, ON]

Thank you, Chair.

My thanks to the minister and his DM and ADM for being here today.

I just want to clarify something. In your response to Mr. Moore's question—and I thank him for reading the mail I send to all residents in my riding—you didn't quite answer the question for me. I read between the lines that you're saying the arrangement that we have here in Ontario makes it a little different in terms of who gets the money at the end of the day.

In other words, this is what I will submit to you, because I didn't make this up; I got it from the City of Ottawa finance folks. The City of Ottawa, as a result of these two buildings being sold, will have $4 million less in revenue. Why? You know why, and you might as well make it public. Instead of going directly to the City of Ottawa, some of that money goes to the City of Ottawa when they go on the private market and—I think it was in the mailer I sent to Mr. Moore and others—the rest goes down the 401 for education taxes. As a result, $4 million less will go to the City of Ottawa. That's the argument. That's what happens. Seeing that maybe this wasn't noted before—and fair enough if it wasn't—I guess my question to you is whether or not that was something you were aware of.

[Michael Fortier]

First of all, our understanding is that the City of Ottawa will ultimately get 100¢ on the dollar, and it's in terms of directing—

[Paul Dewar, NDP, Ottawa Centre, ON]

They'll keep it all?

[Michael Fortier]

It's in terms of directing the traffic on that 100¢ on the dollar.

[Paul Dewar, NDP, Ottawa Centre, ON]

Let me be clear—and I'm not sure if your officials can help you here.

In directing the traffic, I can tell you where the traffic goes: $4 million goes south. That's something I would have assumed you would know. If that's the case, we've heard it said often that there's only one taxpayer. I can tell you that the taxpayers in my riding aren't too happy about this.

And it's not just the deal itself. We can go back and forth on that, but at the end of the day, they were getting 100% dollars that were staying 100% in Ottawa the day before the sale of the building. The day after the deal is done, some money is going south. It's going to Toronto for education and is not coming back. That's not a good deal, so you can understand our problem.

[Michael Fortier]

The deal you're describing wouldn't be, but that's not the deal.

[Paul Dewar, NDP, Ottawa Centre, ON]

I'm asking your official.

You're saying to me that there will be no hit at all for the City of Ottawa and no money will go to Toronto.

[Tim McGrath]

I'll explain the process and how it works.