Government Operations Committee on June 2nd, 2016

[Robert Howald]

Actually, that's a question that we're asked many times when we acquire a piece of property, namely, what are our plans? However, we do sincerely and honestly start without any plans or preconceptions. In the case of the Kingston Penitentiary site, there is active visioning and a community day that's been advertised coming up later this month in Kingston, and there are many different fora where the public can provide their initial thoughts or initial ideas. Our plenary session with the public at the end of that day is more just about identifying the land and the site. It will be some months before we will be taking what we've heard from the community, putting down our own ideas, thoughts, and experiences on it and having a plan come forward. We have no plans at this time.

[Erin Weir, NDP, Regina—Lewvan, SK]

I'm certainly not trying to put any words into your mouth about what the plans might be. I'm just curious. Could you tell us even what some of the options coming from the city, the public, or other stakeholders might be?

[Robert Howald]

It's more a philosophy, but there's an understanding with the city—and obviously, for it to make sense for Canada Lands—that there has to be financial viability for the project. There is a tremendous amount of heritage and history with that site, but it can't cover the entire parcel of land. It's just not viable for that large of a site to be maintained in that manner.

Using very open wording, it will be a mix of uses, as I see it, on the site. What that mix will be, whether it will be residential, commercial, heritage, or museum, I don't know. It will likely be in some form a mix for that site in conjunction with the Olympic Harbour site immediately to the west.

[Erin Weir, NDP, Regina—Lewvan, SK]

It seems like in the United States there's been a fair bit of success in developing Alcatraz as a tourist attraction. Is that one of the options that's being looked at for the Kingston Penitentiary?

[Robert Howald]

If I can get this right, the St. Lawrence Parks Commission is working with the city this summer to be able to provide tours of the Kingston Penitentiary site, so from our perspective that will be a good test of the viability or interest in that. Certainly I can imagine that the first weekends will be very busy. How will that hold out through a summer? It's a good test for us to see what the public interest is in that very historic site.

[Erin Weir, NDP, Regina—Lewvan, SK]

Fair enough. Thanks.

I have a question for Defence Construction about this Borden data centre with Shared Services. How is that project proceeding? Is it on track? Do you have a sense of when it will be complete?

[James Paul]

Absolutely. Mélinda Nycholat is our lead on it.

The minister's announcement a week ago Tuesday was on the successful award of the.... So that's the completion of the procurement phase and award, on time and on budget. I can tell you that absolutely, and it is being delivered as a P3. That's proven to us to be a very effective vehicle for ensuring on-time delivery.

Would you like to add anything, Mélinda?

[Mélinda Nycholat]

Certainly, the project company that we have contracted with on that contract is leaning forward very much. Even before we signed the contract, they were already getting ready to finalize their design. We have several submissions from them to review. The design is well under way and the plan is to start excavation of the foundation by the end of July. That's just a couple of months away, so it's very aggressive.

[Erin Weir, NDP, Regina—Lewvan, SK]

You've made the point a couple of times that it's a P3, and I'm wondering in exactly what sense it is a P3, because of course, as you said, it's normal to contract private companies to do the construction. Is this going to have financing or maintenance from a private company?

[James Paul]

It's a public-private partnership in the formal sense. In this case, there's a major risk transferred to the private sector, because they actually provide not only the financing, but, really, they own the facility. What they're committing to is a performance-measured operations availability to SSC, and their payments only start being made once the facility is available. If there is a delay, they don't get paid, and yet they're funding the construction up front. More importantly, if the facility isn't available to SSC and doing what it's supposed to do every month, then there would be subtractions from what they receive.

That's over a 25-year operating phase agreement, following the three-year construction plan. That's what the P3 brings to the table.

Now, as I said, we do close to 2,000 infrastructure projects a year. We've done a handful of P3s. So it's still not the preferred approach for every project.

[Erin Weir, NDP, Regina—Lewvan, SK]

Could I ask you what the rationale is for private financing, given that the government could presumably finance it at a much lower interest rate than a private company could?

[James Paul]

It's a great question. I have mentioned a few times that our job is to step in when our client partner has the funding approval from Treasury Board to proceed with a project. That decision would have been one that, coincidentally, our minister, because we're under the same minister at PSP, would have made with SSC at the time to use that approach. The federal government did announce that it had an almost preferred approach for $100-plus-million valued capital projects to explore a P3.

So PPP Canada did a screen, approved it as a very suitable project for a P3, but that's something PPP Canada does, and then we were just asked to deliver it.

[Erin Weir, NDP, Regina—Lewvan, SK]

Was the P3 screen applied under the previous Conservative government, or under the current government?

[James Paul]

For a project like that, typically it's at least three years in the planning and making before it comes in, but PPP Canada does the screen. They are also an independent crown corporation. They are applying a comprehensive key screen for these projects that would respond to government policy if it changed. It would be the same screen, I believe, that was used a year or two years ago.

[The Vice-Chair, Liberal, Yasmin Ratansi]

We go to Mr. Ayoub for the last seven minutes.

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

Thank you, Madam Chair.

I will probably share my time with Mr. Drouin, but I would first like to discuss a few issues I am interested in.

I will address Ms. Payette, from the Montreal Science Centre.

According to the Corporate Plan 2015-2016 to 2019-2020 Summary, there is a renewed effort to become more self-sufficient. There currently seems to be a lack of self-sufficiency. New activities are also being sought. That's according to the corporate plan summary. I would have liked you to tell us a bit about attractions that will be changed or future attractions. What is you plan for increasing your self-sufficiency and changing or improving the service offerings?

[Julie Payette]

Thank you for the question, Mr. Ayoub.

I have many colleagues in other parts of the country and around the world. For a science centre, our organization is very self-sufficient. By generating 75% of our revenue ourselves, we are the all-out champions in that department.

Our challenge is to ensure the Montreal Science Centre's sustainability and future with our main partner, Canada Lands Company, but especially with outside partners, our sponsors.

We also have a foundation we use to find money to subsidize the scientific content of our exhibits. Of course, that's something we constantly have to work on, as money doesn't grow on trees.

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

The plan contains something of an analysis, and it talks about new attractions and new content.

Is a plan for the next few years already in place to make changes and stay relevant, or is that currently in the works?

[Julie Payette]

If I may, I will give you an example.

We currently have an IMAX theatre where we use film. However, film is becoming rare in 2016. We just submitted a full plan to enable us to make a change and update in order to move to a more advanced large technological format and make a wider variety of activities possible. For example, as Montreal is a hub for the technology development of video games and digital technology, we want to use that big screen to develop passions for IT.

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

We are preparing for the interviews.

[Julie Payette]

It shows.

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

Yes, but I did not realize that the strike took place last week. That's unfortunate. I can't ask you too many questions because you will tell me that you are in negotiations anyway. That's not a problem. That being said, we have to hope for everyone's sake that the summer activities can get started again. That must actually have an impact on revenue.

Mr. Cavis, I would like to come back to the Old Port of Montreal Corporation.

Was there a change for 2014-2015 in the accounting procedure or the calculation of expenditures and income when it comes to rental operating costs and general and administrative expenses? In 2014, we see that the costs were $3 million, but they were $13 million the following year. Conversely, the general and administrative costs in 2014 were nearly $16 million, but fell to $1.3 million the following year.

What is behind those differences?

[Basil Cavis]

I'm trying to find the columns in question.

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

It's on page 25 of your report. I'm talking about rental operating costs, and general and administrative expenses.

[Basil Cavis]

Okay. We will have to—