Evidence of meeting #11 for Government Operations and Estimates in the 40th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was departments.
A recording is available from Parliament.
Noon
Director, Microeconomic Policy Analysis, Economic Development and Corporate Finance, Department of Finance
Both of those departments will be subject to the corporate asset review in 2009-10. I would expect that the operations of those crown corporations would be something that departments would or would not identify on the long and short lists of assets.
Noon
Liberal
Dan McTeague Liberal Pickering—Scarborough East, ON
Mr. Hirst, I would very quickly turn to you on another issue. I realize I'm going back in time, but in 1992 the federal government of the day decided to book anticipated sales of surplus lands, which were valued at substantial amounts, against the projected deficit. It's the scenario that we currently see today.
Has Public Works or Transport Canada indicated to you in any way, shape, or form a need to look at the rules governing the sale of potential lands at the Pickering airport or any other real estate asset? I'm following up on what Mr. Warkentin had asked a little earlier. Do you have an inventory of that?
Noon
Executive Director, Assets and Acquired Services, Government Operations Sector, Treasury Board Secretariat
No, we haven't had any discussions on that.
Noon
Liberal
Dan McTeague Liberal Pickering—Scarborough East, ON
Those are all the questions I have for now, Chair. I'll pass it over to Ms. Hall Findlay.
Noon
Liberal
Martha Hall Findlay Liberal Willowdale, ON
If I can go back, Mr. Botham, on the split, I have the numbers for five years. It was $2.3 billion in 2009-10, $1.1 billion in 2010-11, $1.8 billion in 2011-12, $2.4 billion in 2012-13, and $2.5 billion in 2013-14. Can you give me a general idea of how much of that is expected to be the sale of assets, as opposed to departmental review?
That's to anybody who might have an answer on the split.
Noon
Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat
For 2009-10, I can say the savings that were identified in the budget for strategic reviews were $349 million.
Noon
Assistant Secretary, Expenditure Management Sector, Treasury Board Secretariat
It was $349 million for 2009-10.
Noon
Liberal
Noon
Director, Microeconomic Policy Analysis, Economic Development and Corporate Finance, Department of Finance
That's correct.
Noon
Liberal
Martha Hall Findlay Liberal Willowdale, ON
Okay. Thank you.
When you're doing the accounting for this, you take an asset and sell it. Am I correct in assuming the amount that is shown on the books is the difference between what it's on the books for and the selling price?
Noon
Director, Microeconomic Policy Analysis, Economic Development and Corporate Finance, Department of Finance
That's correct.
Noon
Liberal
Martha Hall Findlay Liberal Willowdale, ON
In order to reach the amount of $2 billion for the fiscal year 2009-10, for the $2 billion to show on the books, it would require that assets be sold in the aggregate for an amount of $2 billion more than they were valued at when sitting on the books.
Noon
Director, Microeconomic Policy Analysis, Economic Development and Corporate Finance, Department of Finance
That is correct.
Noon
Liberal
Martha Hall Findlay Liberal Willowdale, ON
Is there any concern that in this particular market an asset at value x on the books now is not actually going to even generate x in the current market?
Noon
Director, Microeconomic Policy Analysis, Economic Development and Corporate Finance, Department of Finance
It's a hypothetical question until we have identified those assets that we will do further analysis on. As I said, the analysis includes market soundings, an analysis of the financial worth, and potential interest in the private sector. So hypothetically it is possible that after all the analysis there's a conclusion that a sale of a particular asset would not yield a value that exceeds its book value. The recommendation would take all of that information into account.
Noon
Bloc
Jean-Yves Roy Bloc Haute-Gaspésie—La Mitis—Matane—Matapédia, QC
Thank you, Mr. Chairman.
My question is to Mr. Hirst. In your statement, you said that each of the departments that has to sell off an asset is required to assess the legal risk and to take into account environmental and heritage considerations. I'm having a great deal of difficulty with your comments, because they are not at all in keeping with what I have seen in the past.
I'm going to give you two very concrete examples, the first of which is the surplus lighthouses that belong to Fisheries and Oceans and Transport Canada. All these sites are extremely contaminated, with mercury and other substances. In the past, mercury lights were used and they were simply buried on the lighthouse grounds. All these sites have lead contamination, because the paint used on lighthouses had a very high lead content. In addition, there is heating oil contamination on all these sites, because fuel was used to run the generators that produced electricity. The empty barrels were left lying around, and even buried on the grounds. The other example is that of the ports that formerly belonged to Transport Canada and which now belong to Fisheries and Oceans Canada. Most of these ports are in a very poor state of repair. Renovating them would mean that the sediment would have to be stirred up. And there is a very high concentration of contaminants in most of these locations.
What happened was these two departments—Transport Canada and Fisheries and Oceans Canada—got rid of some extremely contaminated sites without cleaning them up. They are located in the Maritimes and British Columbia. Some not-for-profit groups took over these facilities with no decontamination work having been done. That means that sometime in the future, these organizations could sue the Government of Canada because the sites were not decontaminated. I think that what happened in the past is more like a fire sale. The government got rid of some surplus assets so that it would no longer have to invest in maintaining them. To me, it looked more like a fire sale than an intelligent divestiture of surplus assets.
I come now to my question. What guarantee do you have that departments have a genuine strategic plan for selling off their facilities? Neither Transport Canada nor Fisheries and Oceans Canada nor the Department of National Defence decontaminated the sites. Forget about that. To my knowledge, there is no plan to decontaminate the sites. These sites were abandoned because the government no longer wanted to spend money maintaining them.
My question is crucial. The government could face a lawsuit anytime, and I have actually advised some of these organizations to do just that. People cannot visit a lighthouse if the grounds have heavy mercury, lead and heating oil contamination. At some point, someone, somewhere is going to wake up to this fact.
12:05 p.m.
Executive Director, Assets and Acquired Services, Government Operations Sector, Treasury Board Secretariat
I'd just mention that the federal government does have a program in place, the federal contaminated sites action plan, where departments that are specifically in that program do receive funds for assessment of those kinds of sites and then for remediation of those sites.
12:05 p.m.
Bloc
Jean-Yves Roy Bloc Haute-Gaspésie—La Mitis—Matane—Matapédia, QC
Excuse me, I am speaking about things that have already happened. Do you ensure that sites that were formerly federal government property and that have been transferred to various organizations have been decontaminated? I understand that a decontamination fund for these sites was introduced later, but this financial assistance was clearly inadequate.
Are you going to do anything about the sites that have already been transferred to other groups?
12:05 p.m.
Executive Director, Assets and Acquired Services, Government Operations Sector, Treasury Board Secretariat
I'm not familiar with those particular transactions. I don't know if Shirley is.
