Government Operations Committee on June 2nd, 2016

[Ramez Ayoub, Liberal, Thérèse-De Blainville, QC]

Okay. Thank you.

[The Vice-Chair, Liberal, Yasmin Ratansi]

Mr. Blaney for five minutes.

[Steven Blaney, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

To get back to the question of my colleague Kelly, would it be possible to provide us with some information on the apparent discrepancy between the cost of the food and beverages, or the rental, being higher than the revenue? Could you clear that up, maybe not this afternoon but later if possible, because I'm sure this information would be of great interest to the members of the committee?

I would now like to address the Defence Construction Canada representatives.

Your organization, which was created in 1951, plays an important role in procurement. I know that you talked about this already, but since I arrived a bit late, I would like to ask you what your priorities are for next year.

[James Paul]

Thank you for the question.

Do you mean priorities specifically around procurement, or overall as a corporation?

[Steven Blaney, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

Of DCC, of your corporation.

[James Paul]

Our priorities are always to continue to deliver the program that our client partners ask us to do efficiently and effectively. I've mentioned that the mix of services is always changing. DND and our other client partners will project a program, based on project approvals and fundings they're responsible for. After that, we track what those approvals are around, manage the procurements accordingly, and then we hire the proper skill sets, and by hire I mean we engage the private sector. We are the procurement authority and contract manager. We don't put the shovel in the ground, so to speak. Part of our role is to support the Government of Canada's economic stimulus and other support programs on the financial side. The $1 billion roughly that we expend annually is all through the private sector in competitive processes that follow all the government procurement and contracting policies.

[Steven Blaney, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

You are in charge of upgrading the military bases. Can you give me an update on the investments that have been required to welcome the Syrian refugees on military bases?

[James Paul]

Our piece of it was that we assisted DND by building additional accommodations at three bases and wings, specifically in Quebec and Ontario. Within their plans, if they were asked to accommodate Syrian refugees, they would have housed them. The main project was at Valcartier. For example, we rapidly—from when the request was made in late October, or early November, to delivering on it in December and January—built a number of additional units or new builds on a modular housing basis. We're used to doing that for the Canadian Forces Housing Agency. We have also upgraded existing cadet facilities. Even if these are not used for refugee accommodation, a legacy of that will be the much improved facilities that can be used in Quebec and Ontario for cadets, and training, and so one.

[Steven Blaney, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

I visited the cadet military base in Valcartier. How much was invested in those three military bases?

[James Paul]

Mélinda, can I ask you about the numbers?

[Mélinda Nycholat]

I don't remember the numbers exactly. It may be in the order of $1 million roughly.

[Steven Blaney, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

One million dollars?

[Mélinda Nycholat]

I think so. It's probably safer not to say any numbers.

[Steven Blaney, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

If you have the info per military base, I would appreciate it.

You are in charge of procurement, and the government has undertaken large procurement projects. You are managing $1 billion, you have an increased budget because there's more investment, and your manpower has been reduced. Are you able to cope with more projects and less people?

[James Paul]

I ran out of time to answer Mr. Weir's question fully. What I was saying in terms of our responsive model was that we are in fact growing our staff again because of the growing program. Three to four years ago, we had exceeded $1 billion, and then it came down to about $850 million. We adjust the resources accordingly. We profile some of them, and we use a strategy that involves roughly 75% permanent positions and about 25% contract term, and that becomes an excellent way to try out new resources. We are in fact staffing close to 150 new positions this year to respond to the program growth that FIP and other projects brought in.

[Steven Blaney, Conservative, Bellechasse—Les Etchemins—Lévis, QC]

How many new positions?

[James Paul]

One hundred and fifty, so we will be close to a thousand personnel by next year.

[The Vice-Chair, Liberal, Yasmin Ratansi]

Now we go to the five-minute round with Ms. Shanahan.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

I'll continue with Mr. Blaney's line of questioning. I thank him for bringing it up, because we have heard from the Auditor General's report, I think last fall, about serious problems with military housing. What I'm hearing, actually from all witnesses here today, is that you always adhere to very tight controls around your data management, around inventory, and so on. So I'd like to hear your views. You did contribute to building new military housing. What's going on with the existing stock?

[James Paul]

CFHA is one of our key clients. Of course, it is up to CFHA, which is part of the Department of National Defence, to identify their plans and program requirements, and then to get the funding approval they require. When we come in, CFHA says, “This is what we would like you to do in years one through three, coming out.” DND plans three years out on its infrastructure. We have a five-year view. Then we act on those projects. That includes both the maintenance and repair of existing facilities, housing specifically, and also the recap or upgrade of, say, older stock to modernize it, and the construction of new facilities across the country.

DND's needs shift based on where the personnel growth is. Some bases are growing, some are shrinking. Sometimes we're disposing of lands. For example, the Rockcliffe Air Base that Canada Lands is managing the disposal of now, our job for DND was to go in and do the demolition, the remediation and the environmental clean-up, so that when the site is turned over to Canada Lands, they can be confident it's a clean site that can take further development.

We respond to what our client partner, CFHA, has in their plans for their needs. I know that they are addressing the housing requirements as well as they can. but that's not really our place to comment. We're not part of the department.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

I understand.

I am impressed by the building information modelling program that you have there. It certainly sounds like.... It seemed that one of the root problems was around the data collection, around what exactly the state of the housing was across the country. We can certainly see some room for improvement there.

To speak to Canada Lands, it's also impressive. Dealing with real estate in the best of times is a very risky business, so what is the secret of your success? Are you aligning yourself with market values on a continual basis? How do you monitor those risk factors, because you can also lose money in real estate?

[John McBain]

You're quite right. To be fully transparent, one of the benefits of being a crown, working within the policies set out by the government, is that we reach an agreement with the federal custodians on the market value of the properties. We sign a promissory note. We make an upfront payment, but we don't repay the promissory note until we're in a cash-positive situation, so there's less risk for us than there would be for a private sector developer.

It stems from the concept that the government realized that it could sell the property once and get an increase in value, or it could have an organization like ourselves do the development to get the uplift that benefits the taxpayer. In consideration of the latter approach, we do get a bit of a cushion that protects us.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

Okay. Very nice. Thank you.

Chair, how much time do I have?

[The Vice-Chair, Liberal, Yasmin Ratansi]

You have about one minute and 15 seconds.

[Brenda Shanahan, Liberal, Châteauguay—Lacolle, QC]

I will cede it to my colleague, Mr. Drouin.