Government Operations Committee on Feb. 3rd, 2011

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Thank you very much.

[The Chair, Liberal, John McKay]

Are you finished?

[Jacques Gourde, Conservative, Lotbinière—Chutes-de-la-Chaudière, QC]

Yes.

[The Chair, Liberal, John McKay]

I think we still have time left on the Conservative watch. There are two minutes left.

Ron.

[Ron Cannan, Conservative, Kelowna—Lake Country, BC]

Thank you, Mr. Chair.

Thanks, Ms. Fraser. The constituents of Kelowna—Lake Country are looking forward to having you at the UBC Okanagan talk in a couple of weeks. I hope to have a chance to visit with you then as well.

Thank you for being here today for this very important discussion. I believe that for all of us around the table, it's not a partisan issue. The Parliament buildings are a national historic icon. I can still remember the first time I brought my family here a little over a decade ago. I said that it's one of those bucket list things: every Canadian should have a chance to come here and visit Parliament Hill. It makes you even prouder to be a Canadian.

Just quickly, with my limited time, I'll say that I know you've had a great deal of research and have extensive knowledge, working with the Speaker and Ms. O'Brien. I'm just wondering if you have governance models from any other countries that you might be able to identify and that would help our committee in looking at them as we continue the study and come up with something that would help future parliamentarians as well.

[Sheila Fraser]

Thank you very much for the question.

Chair, in the report we mention the models of three countries—I'm just trying to find it here—the U.S., Great Britain, and Australia. In each of those cases, the responsibility for their Parliament buildings rests with Parliament. There are different models that have been set up. In some cases, there are organizations that are directly within the Commons administration. In other places, there's the architect of the Capitol Hill in the U.S. But in all three models, the responsibility for the buildings rests with Parliament.

It's interesting when we go back to the report that was issued in 1992. That was just at the time that Great Britain had transferred responsibility from a government department to Parliament, and one of the recommendations then was that the government here should be studying that and keeping track of how that model was working. I think we all agree that any model is going to have some challenges with it, but certainly, by looking at these three countries.... And I believe that Public Works has or would have as part of its study looked at the various models elsewhere to see the advantages and disadvantages and to determine what would be the most appropriate mechanism to put in place here in Canada.

[The Chair, Liberal, John McKay]

Thank you, Mr. Cannan.

Madam Coady, for five minutes.

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

Thank you very much.

We certainly appreciate your being here today. This is a very important topic.

I was speaking with a constituent today. I think this is where Ron was going. As I was speaking with Joe, my constituent, we were talking about the fact that I was coming to committee today and talking about this important issue and how long the renovations have been going on at Parliament Hill and how much they cost. I noted that and I mentioned it to him, and Joe came back with a point that I'm going to raise now.

We were talking about how you talked about the increasing project costs and the risks involved, and Joe's point as a Canadian and as a taxpayer was, “My goodness, why can't we get this right?” I mean, this has been going on a tremendously long time and costing us a tremendous amount of money. Can you elaborate, perhaps, on the costs and the risks you see?

[Sheila Fraser]

Well, on the costs, Chair, in the report we note that there had been an estimate done in 2005 that the total cost of the project would be somewhere in the order of $5 billion. I think we have to all recognize that it was a very preliminary estimate done at that time.

Costs have likely increased since then. There may have been, as well, different requirements--either building requirements or security requirements--that have been put in place since then. I think it can kind of give us a bit of an idea of what the extent of costs will be, but as I said earlier, I would not at all be surprised if those costs will increase as the projects are undertaken and, as well, as the actual state of the buildings is better understood.

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

That is one of the risks, I would imagine--

[Sheila Fraser]

It is a huge risk--

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

—the functionality of the buildings, the function of Parliament.

[Sheila Fraser]

--and as we note in the report, the buildings are deteriorating, and some of them are at a pretty serious stage. In the West Block, the risk of failure of key building systems is rated now as critical. In the Centre Block, by 2013 that risk is rated as high, and by 2019 as critical.

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

So I guess if we can sum up, one risk would be the costs escalating far above the $5 billion, and on the amount we really have no idea at this point. The second risk is the functionality of our actual government, and our governance of our country is at risk, based on what you've just said.

I've read your report with interest. In your report on page 7, you talk about how in 2005--and you just referenced that date--Public Works and Government Services Canada and its parliamentary partners “established a task force to review governance”. That was six years ago. In its report, “A New Approach to Governance of the Parliamentary Precinct”, they talked about the “key flaws” and made a recommendation for “a new governance model”.

Now, it is five-plus years ago that this report came out, and we're today still talking about the poor management and how that governance model has to change because of the significant risks to both the dollar value and the operation of government. Could you speak to that, please?

[Sheila Fraser]

The question of governance, as you mentioned, was studied about five or six years ago and a recommendation made. Nothing has changed since then.

But quite honestly, this is an issue that is at least 20 years old. There have been a number of reports. I think it's really time, quite honestly, that the governance issue has to be addressed, because we can see that it is affecting the projects and the rehabilitation of the buildings. If you don't have clear priorities, if you don't get stable funding, and if you don't have plans that you can actually execute, we're going to be back into 20 years again, and the buildings, quite frankly, are not going to last another 20 years.

[Siobhan Coady, Liberal, St. John's South—Mount Pearl, NL]

That's one thing, the operations of government, and we recognize that as a risk.

The other one.... I thought this was really interesting. I just recently had an order paper question answered. I asked a question regarding the long-term vision plan for the renovations, and the question was around the contracts. Of the 27 contracts that I reviewed, 25 were overbudget, and they were overbudget by over $33 million.

So when you look just at the particular section that I was looking at--those 27 contracts--25 of the 27 were overbudget by a significant amount of money, and when you talk about $5 billion, all you have to do is surmise how much more dollar value this is going to cost us, and how significant this is, not only to our treasury but also to our governance model, so I think we do have to act very quickly on this.

[The Chair, Liberal, John McKay]

Thank you, Siobhan.

Do you wish to offer any observation on Ms. Coady's comment?

[Sheila Fraser]

We didn't look at the contracts, so I can't really talk to that. But I think it's important for the committee to realize that these are very complex projects that are being undertaken in heritage buildings. As I mentioned earlier, anyone who has ever done a renovation of an old house knows that when you open up the walls, you sometimes find things that you never expected to find.

What might interest the committee--I don't know if you have done it--is to actually go with Public Works to see some of the rehabilitation work going on and some of the challenges they have in managing this. I was fortunate enough when we were doing the audit to be able to visit the site of the work that was being done in the West Block on the tower. It was actually very impressive to see the kind of care they were taking, obviously with the historic...but to see some of the challenges they had to deal with as well in doing that work. That might be a suggestion for the committee.

[The Chair, Liberal, John McKay]

Thank you.

Mr. Lemay, you have the floor for five minutes.

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

Thank you, Madam Auditor General and Mr. Ricard. I am impressed by what I see in these documents. I went back to 1992. I don't know whether you read the report by Mr. McGrath, the Executive Director of the Real Property Branch of Public Works and Government Services Canada. I will quote you an excerpt. This is what he says on page 37 of the 69-page report:

If you make a comparison with every other organization, in every project where there is an overlap of reviews, there is an escalation in costs and delays. PWGSC explained that the reason for this practice is that it helps government save money in the long term by ensuring that the concept is acceptable.

After having read this and after having heard from you, I thought that someone must be mistaken, and I don't think it is you, since you have told us the exact opposite, namely that the more people there are involved, the longer it takes; and the more you study the study which was studied based on the study of the previous study, the more costs go up. That is my understanding.

[Sheila Fraser]

Obviously, the longer you wait to do the work, the more it will cost, first, because of the increase in costs, but also because the buildings deteriorate even more.

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

There is a beautiful graph on page 7 of your report. It is magnificent. The graph indicates that the West Block was in a critical state in 2007, and that by 2013, it will be in a state of total failure. What is the difference between “critical” and “total failure”? When a person is in a critical condition, that person is really not doing very well.

[Sheila Fraser]

No, it is not doing very well.

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

For now, that does not apply to me.

[Sheila Fraser]

Oh! Oh!