Government Operations Committee on Nov. 26th, 2009

[Alex Lakroni, Acting Chief Financial Officer, Department of Public Works and Government Services]

Madam Chair, members of the committee, good afternoon.

My name is Alex Lakroni, and I am the Acting Chief Financial Officer at Public Works and Government Services Canada. With me are John McBain, Acting Assistant Deputy Minister of Real Property Branch, and Renée Jolicoeur, Assistant Deputy Minister of Accounting, Banking and Compensation Branch.

We are pleased to be here today as part of your review of the supplementary estimates (B) that were tabled on November 5.

Parliament approved the department's 2009-2010 main estimates and supplementary estimates (A), which totaled $2.8 billion. The supplementary estimates (B) request additional funding of $130,762,000. This request is for items previously approved by the Treasury Board.

As committee members may know, PWGSC is responsible for, among other things, the accommodation needs of federal employees across Canada. As was the case last year, the greatest portion of the funds requested, which is $80.2 million, addresses increased volume of office accommodation and inflationary pressures on non-discretionary expenses for accommodation and real property assets management.

The increased volume refers to changes in the office space inventory accommodating current public servants, including higher rental rates for leases being renewed, additional fit-up costs, and temporary space requirements stemming from renovations.

The inflationary pressures on non-discretionary expenses include increases in municipal taxes, utility prices, and building maintenance costs.

Another item in supplementary estimates (B) is $35.3 million, which is needed to address the cost of office accommodation for renewal of sunsetting programs or growth.

In addition, this year $21.6 million is required for operational costs related to the department activity in support of the government's economic action plan. As committee members may know, the department received additional funding of more than $400 million in budget 2009 for improvements to PWGSC-owned crown assets. The funding is being used to speed up existing plans to repair and rehabilitate bridges and buildings, improve accessibility of federal buildings, and plan for the future of the Manège militaire in Quebec City. This amounts to hundreds of projects across the country, many of which have generated significant work for small and medium-sized enterprises.

The department is well on track to spend all of the $238 million allocated to it under the economic action plan for 2009-2010. Please note that the $21.6 million in supplementary funding requested in supplementary estimates (B) is for the administration and management of the government's infrastructure program and not for projects themselves.

Another request in supplementary estimates (B) is for $12.6 million to advance improvements to the British Columbia portion of the Alaska Highway, for which PWGSC is responsible.

An amount of $8 million dollars is being requested for expenditures related to the 2010 G-8 Summit in Muskoka. As central service provider, our role in the summit is to support the activities of other departments.

A request for $4.7 million is being made in connection with the remediation of federal contaminated sites.

Also requested is funding of $4.4 million towards our initiative to modernize and consolidate the federal government's pay system. Members may recall that this committee has recommended that the existing 40-year-old system be brought up to date.

There are other smaller amounts or adjustments to the appropriations and we'd be pleased to provide additional details about these as you wish.

Madam Chair, these are the major operating and capital expenditures for which PWGSC is requesting additional funds.

My colleagues and I would now be happy to answer your questions. Thank you.

[The Chair, Liberal, Yasmin Ratansi]

Thank you.

We will start with the first round of questions, and I'm going to ask members if you want every round to be five minutes or if you want eight and five.

[An hon. member]

Eight and five.

[The Chair, Liberal, Yasmin Ratansi]

Fine, we'll start off with eight-minute rounds.

Madam Hall Findlay.

[Martha Hall Findlay, Liberal, Willowdale, ON]

Thank you very much, Madam Chairman.

Thank you so much for being here with us this afternoon.

We're here to talk about estimates, but I would be remiss if I didn't ask or try to elicit some information.

As you know, in the news now there are reports of significant investigations happening at PWGSC. Without any knowledge of what those are—and we're in the process of dealing with the estimates—can I ask first why these investigations are happening, why the secrecy, and why we're not being given any more information about what's actually happening?

I don't know who best.... Mr. McBain, I understand that you are now the acting ADM. Congratulations. I gather that's a promotion at this point.

Can you give us some input why this is happening, why we're not being given information? Can you explain specifically? We understand that it may have something to do with real estate. Maybe, Mr. McBain, you can answer. I ask if you can provide any help in this regard.

[John McBain, Acting Assistant Deputy Minister, Real Property Branch, Department of Public Works and Government Services]

Thank you for the question.

This is not an area of my responsibility. I'm not familiar with the issues you refer to, so I'm afraid I have no comment to offer at this time.

[Martha Hall Findlay, Liberal, Willowdale, ON]

Mr. Lakroni, given your responsibility as the acting CFO, again my concern.... We're talking about estimates, but there seems to be significant secrecy and some significant concern about some activities within PWGSC. Can you help us on this?

[Alex Lakroni]

It is not my area of expertise, and I can't comment on the investigations taking place.

All I can tell you is that my department has been and continues to be fully committed to accountability and transparency.

[The Chair, Liberal, Yasmin Ratansi]

May I just interrupt, Madam Hall Findlay?

It's not relevant to the estimates, so I am sorry you can't ask those questions. They are here for the estimates. Ask them questions on the estimates.

[Martha Hall Findlay, Liberal, Willowdale, ON]

Madam Chair, it actually does, with respect. If we are here approving money that the department is asking for and we are of the understanding that there are significant investigations, they may deal with finances.

[The Chair, Liberal, Yasmin Ratansi]

I am sorry. I rule that it is not relevant, because I've consulted. It's not relevant. So change your questions and ask them questions on the estimates, please.

Thank you.

[Martha Hall Findlay, Liberal, Willowdale, ON]

I would like the record to show that we are concerned, given that we are being asked to approve additional funding to a department that is now on record as being involved in certain investigations that may or may not involve financing or may or may not involve kickbacks. It may or may not involve that our job in terms of estimates actually may involve this.

I understand. I did want to raise that as a concern, given the request to approve money.

A particular question then—and I'll leave it to whoever might be the one most appropriate—is the $21.6 million required for operational costs related to the department's activities in support of the economic action plan. Can somebody explain to me where almost $22 million is going for this department for the economic action plan work that's in addition to what already has been provided before?

[John McBain]

Certainly. Thank you for the question.

These funds are to support the department in delivering its commitments to the economic action plan and to assist other government departments in delivering their commitments to the plan. As you know, Public Works and Government Services Canada is a common service organization. In that respect, we provide a wide range of services, including industrial security, acquisitions, and real property to other government departments.

[Martha Hall Findlay, Liberal, Willowdale, ON]

How does that relate to the economic action plan?

[John McBain]

When the increases were provided to various departments above and beyond their normal funding, it drives additional business for us. These funds are for the indirect costs associated with delivering the economic action plan, such as human resources, industrial security, additional finance, audit and evaluation, and the program management to deliver those programs. Costs directly associated with projects are included in the project cost.

These are funds to allow us to deliver a bigger program of work than we would normally be asked to undertake in this fiscal year.

[Martha Hall Findlay, Liberal, Willowdale, ON]

I will note that that is an extraordinary amount of money at issue here.

Does any of that have anything to do with additional advertising, just out of curiosity?

[John McBain]

No.

[Martha Hall Findlay, Liberal, Willowdale, ON]

Pardon my ignorance, but I'm not aware of why PWGSC is responsible for the British Columbia portion of the Alaska Highway. That should be a really easy question for you. If somebody could just shed light on that for me, that would be great.

[John McBain]

Actually it's a good question.

The highway was built by the U.S. army during the Second World War, and after the war it was transferred to DND. In 1964 the British Columbia portion of the highway was transferred to PWGSC from the Department of National Defence through an order in council.

We maintain approximately 800 kilometres of the highway from Fort St. John to the Yukon border.

[Martha Hall Findlay, Liberal, Willowdale, ON]

Thank you.

I have some time left. I'll transfer it to my colleague.

[Alexandra Mendes, Liberal, Brossard—La Prairie, QC]

Thank you, Madam Chair.

Thank you for your presentation.

I would like to talk to you about a very concrete issue that concerns my riding. I see that $400 million have been allocated as part of budget 2009 to repair and rehabilitate such things as bridges and buildings that are owned by Public Works and Government Services Canada.

Does that also include bridges over the St. Lawrence River?

[John McBain]

No, we are not.

[Alexandra Mendes, Liberal, Brossard—La Prairie, QC]

Therefore, the Federal Bridges Corporation is completely independent from you. That has nothing to do with the $212 million that were allocated for the Champlain bridge. Are you saying that those $400 million have nothing to do with that?

[John McBain]

You are correct.

[Alexandra Mendes, Liberal, Brossard—La Prairie, QC]

Thank you very much.