Government Operations Committee on Aug. 20th, 2024

[Majid Jowhari, Liberal, Richmond Hill, ON]

Treasury Board sets out the policy, but because it fell under the $10 million threshold there was no need, under the policy, to proceed, for completeness, by asking whether they had this or that.

[Samantha Tattersall]

There are two things.

One, hundreds of real property transactions may occur in any given year, and that limit is delegated to the department, so they are responsible and accountable for that transaction. Within their governance and oversight the expectation would be that when they undertook the transaction they would ensure that their real property management framework set out all the right decision points, approaches and steps to ensure consistency with the policy.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Is GAC the only department that has a threshold?

[Samantha Tattersall]

No, GAC is one of eight departments that have special limits. Every department has general real property limits, and seven others have special limits. That takes into account their specific operational needs in real property, so they are not the only ones.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Are you aware of any transactions in the past that fell under the threshold and on which they said they were going to conduct the transaction but they didn't have to specifically report it to TBS, or that TBS said fell under the threshold and therefore they weren't going to review?

[Samantha Tattersall]

Across government within departments there are lots of transactions that fall within their transaction limits.

[Majid Jowhari, Liberal, Richmond Hill, ON]

On average, what's the size of these transactions? Do you have any idea? I know they're under the threshold, so you—

[Samantha Tattersall]

It's a good question, but because they fall under the threshold I don't have a line of sight into them. I think it would be interesting to ask GAC that to understand what their transactions are. I do know—I tried to prepare a bit for this committee—that a lot of their transactions are actually in respect of leases, because they do a lot of real property transactions for staff quarters, but in terms of the amount and for what, the higher-dollar-value ones will typically be related to official residences or chanceries.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Thank you.

[The Chair, Conservative, Kelly McCauley]

Thank you very much.

Mrs. Vignola, go ahead, please.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Thank you very much, Mr. Chair.

Ladies and gentlemen, thank you for being with us on this chilly, fall-like summer day.

Ms. Tattersall, a few moments ago, you said that the transaction limit was originally set in 1993 and that it had been reviewed since then.

When was the last review, the one that brought it up to $10 million?

[Samantha Tattersall]

Thank you for your question.

The limit was last reviewed in 2022. That's when it reached $10 million.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

What was the limit at the time of that review?

[Samantha Tattersall]

At that time, the last update was in 2006.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

No, in 2022, it was—

[Samantha Tattersall]

In 2022, it went from $4 million to $10 million, but the last review was in 2006. So 14 years passed between the two reviews.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

From 2006 to 2022 is more like 16 years. If you go back to 1993, that's 29 years.

What explains the increase from $4 million to $10 million? Were the requests for authorization to purchase so frequent that it was felt that the limit was clearly too low?

[Samantha Tattersall]

I think a review is done every six years.

The next review will be May 19, 2026. It had not been updated for 16 years. Your math is better than mine. GAC did a review of where it holds properties in 23 markets.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Okay. I will rephrase my question.

How many requests were there for authorizations over the $4‑million limit to justify increasing it to $10 million, two and a half times the original limit?

[Samantha Tattersall]

That's a good question, but I will have to provide you with a written answer, as I don't know.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Okay. Please do. Thank you.

In 2007 and 2008, for example, I see a $15‑million construction in South Korea, a $3.5‑million parking lot—this transaction was under the limit—and a $6‑million chancery being built in Bangladesh.

Is the real estate portfolio often worth more than $5 million, $6 million, $7 million or $8 million abroad, or is it exceptional?

[Samantha Tattersall]

There are two aspects to consider.

A construction project, for example, may require a Treasury Board review.

If it's a project and it's above their capacity, there's an assessment for that and it could come to Treasury Board.

During the last few years, I'm not aware of any major real property transactions that have come to Treasury Board.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

If I understand correctly, in the case of the purchase of real estate in New York, you did not have to give authorization because the value of the transaction was less than $10 million.

Does that $10‑million limit include the life-cycle costs of the condo, or is it just for the purchase, period?

[Samantha Tattersall]

It's for the purchase.

[Julie Vignola, Bloc, Beauport—Limoilou, QC]

Do you have an idea of what the life-cycle cost is? Has any maintenance planning been done so that we don't end up with a condo that is said to be obsolete again because we have to invest $3 million in its restoration?