Government Operations Committee on Aug. 20th, 2024

[Samantha Tattersall]

We don't have that in place, but it's a good point. I will take note of it.

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

When you buy a house, you can well imagine that, five years later, you will have to renovate the windows, the roof, and so on. So I would imagine that there is some kind of planning for such costs. At least, I hope so.

Ms. Bouchard, perhaps I should put my question to Global Affairs Canada, but I will ask it anyway. We received an appraisal report from Global Affairs Canada for the West 55th Street residence in New York. It is actually an extraordinary building, which I saw from a distance without knowing what it was. I thought to myself that, finally, a building looked like something other than a rectangle. That said, an appraisal report establishes that the residence is worth approximately $6,650,000 in U.S. currency, if memory serves, which is equivalent to approximately $9,000,000 in Canadian currency.

Is there an equivalent appraisal report for the Park Avenue residence, which we learned recently is now for sale?

[Amélie Bouchard]

As part of its due diligence process, Global Affairs Canada used the services of my office to obtain a market value appraisal. One was commissioned in 2023. As for the exact month, I would have to check, but I believe it was in June. Then we updated the appraisal report this summer, in June 2024. I'm going by memory.

I certainly can't provide a lot of details on the content of the appraisal report, given that the building is currently for sale. The transaction could be jeopardized. However, I can confirm that a report was commissioned and updated a year later.

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

I'll come back to that later. Thank you.

[The Chair, Conservative, Kelly McCauley]

Thanks.

Mr. Bachrach, over to you please, sir.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Thank you very much, Mr. Chair.

It's good to see everyone virtually and to be back at the committee.

I want to start by thanking our witnesses for helping us understand how these kinds of purchases and sales work and the role of Treasury Board and PSPC in that process.

My colleagues have canvassed a number of aspects of this, and I understand the breadth of questioning is somewhat limited given TBS and PSPC's limited roles. I'm curious, though, about the basic process and the basic structure for these kinds of transactions. We've talked a little bit about the policies that are in place and the procedures. How far back do those procedures go?

Perhaps this is a question for Ms. Tattersall from TBS.

[Samantha Tattersall]

The current directive has been in effect since 2021, but there was a policy on real property in advance of that. I don't know how far back it goes, but it goes back a long way, so it would have covered transactions for decades now, but the current policy goes back to 2021.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Following on my colleague Ms. Vignola's question about the increase in the threshold that was made in 2022, when it was increased from $4 million to $10 million, I'm wondering what the rationale was. I assume there was a request from Global Affairs to increase the limit. What was the rationale for increasing the limit? Obviously it comes at the cost of reduced scrutiny, reduced accountability, reduced transparency and all of those things. What was the rationale that was provided for that quite significant increase in the threshold?

[Samantha Tattersall]

The thresholds have an expiry date. The last time the threshold for an acquisition for an official residence was updated was in 2006, and that's when the $4-million threshold was set up. There were 16 years in-between that. The business case looked at inflation over the 16 years and the changes in the real property market conditions.

It may be important to hear from GAC officials as well, but basically, my understanding from that increase is that they looked at 23 different markets—because GAC has missions in over 100 countries—and looked at the average price for the acquisition of an official residence. It was on that basis that the update to the limit was made.

Again, as I previously said, those limits are looked at on a regular basis, and the next scheduled review of those limits will be in 2026.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

What would the downside or the risks be of leaving the $4-million limit in place to ensure greater scrutiny of these transactions?

[Samantha Tattersall]

First, it's important to note that Global Affairs, even if it's taking the transaction under its own authority, still has to ensure that it has the proper due diligence, the proper scrutiny and the proper decision-making. That's an important first step.

The next thing would be to understand what its real property holdings are. I don't know if I have details on that, but typically.... It's a question for GAC of how many official residences or chanceries it owns around the world, and how they would bump up against the limit. The bigger, more complex ones that may have a project element would certainly come in to the board if they were over the risk capacity.

I don't have anything else to add to that answer.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

I understand that Global Affairs is responsible for its own due diligence, and I'm not questioning that process. My understanding is that the reason Treasury Board gets involved in transactions over the $10-million threshold is to provide an added layer of accountability and due diligence on behalf of the Canadian public.

Given the challenges that we've seen in procurement government-wide, why wouldn't we have, just for the sake of caution, a lower threshold in order to ensure that there are more eyes on each transaction and that Canadians are getting the best value?

[Samantha Tattersall]

It's a great question.

GAC has been managing its real property for decades, and it has had special limits since 1993. I found the number: it has 87 official residences across government.

Within that limit, it's a balance between those transactions that GAC will routinely undertake and manage against those that would be above that limit and necessitate Treasury Board approval.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Okay.

I believe you said the next review of the limits is in 2026, so it was 14 years between reviews and then four years between reviews.

Maybe I misunderstood the timeline. Is it the intention to have more frequent reviews of the limits?

[Samantha Tattersall]

Perhaps I should clarify.

The period of review hasn't changed; it's that the limits were not increased in 2019. There was a review. They were not increased in 2019. There were reviews.

There are regularly scheduled reviews. We don't necessarily update them each time they come up for review.

[Taylor Bachrach, NDP, Skeena—Bulkley Valley, BC]

Okay.

This might be a question for—

[The Chair, Conservative, Kelly McCauley]

I'm sorry. That is our time. It's past our time.

There will be lots of opportunities. We are booking tomorrow's meeting at the committee's request at 9:00 a.m., eastern time, just for you, Mr. Bachrach.

Mrs. Block, please go ahead.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much, Chair.

I would like to continue along the same lines as some of my colleagues, but I would also like to establish an understanding of PSPC's role when it comes to the real property that the Government of Canada holds, as well as the Treasury Board Secretariat's role.

PSPC is the real property manager for the Government of Canada. Is that correct?

[Mark Quinlan]

PSPC manages most of the office portfolio for the Government of Canada—roughly a quarter of the real property holdings if you think of square metres of office space or other kinds of special purpose space—and PSPC also manages a large portfolio of engineering assets and infrastructure, which are things like dams and bridges.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Does PSPC provide any sort of oversight of the property that we own in other countries?

[Mark Quinlan]

No. As previously indicated in my opening remarks, PSPC's role, following Treasury Board Secretariat policy, is to provide the appraisal services.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

I am wondering if both you and Ms. Tattersall would be willing to table your opening remarks to the committee.

[Mark Quinlan]

Absolutely, Mr. Chair.

[Kelly Block, Conservative, Carlton Trail—Eagle Creek, SK]

Thank you very much. We used to receive them ahead of a committee meeting and would be happy to have those in writing.

When GAC purchases property, is that property registered with PSPC? Where is it registered?

[Mark Quinlan]

With regards to PSPC, we do not have a registry of properties outside of PSPC's portfolio, with some very limited exceptions, so I can turn to Treasury Board to complete that answer.