Government Operations Committee on Aug. 20th, 2024

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

Okay.

Mr. Quinlan, if I correctly understand what you said earlier, PSPC is responsible for the government's real property in Canada, but not its real property outside of Canada. Please answer yes or no.

[Mark Quinlan]

Mr. Chair, I wish I could answer yes or no. Unfortunately the question requires a slightly more nuanced reply. I'll be very brief.

In terms of built space, real property under the responsibility of PSPC represents approximately 25% of the Government of Canada's real property assets. Several other custodial departments are also responsible for real properties. For example, Correctional Service Canada or National Defence come to mind. PSPC is responsible primarily for office space and certain infrastructures, particularly bridges and dams.

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

So, the assets that you're responsible for are located in Canada, not outside of Canada.

[Mark Quinlan]

Exactly, Mr. Chair.

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

Is GAC solely responsible for real property outside of Canada, or are any other departments responsible for that kind of property too?

[Samantha Tattersall]

Twenty-eight federal institutions are custodians.

GAC is a custodian, but Global Affairs also plays a common service provider role to other departments that have a presence internationally.

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

Thank you very much.

Is the real property management portfolio concentrated in one department, or is each custodial department responsible for managing its own portfolio, including repairs, sales, and so on?

[Samantha Tattersall]

Each custodian is responsible for renovations.

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

Thanks very much.

Thank you, Mr. Chair.

[The Chair, Conservative, Kelly McCauley]

Thanks very much.

Mr. Bachrach, go ahead, please.

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

Thank you, Mr. Chair.

I'll start with a question for Ms. Bouchard. It was mentioned earlier that these properties aren't only expenditures, but they're also investments. I'm wondering if you can speak to the real estate trends in the area in which Global Affairs has purchased this apartment. Regarding what we're seeing in Manhattan and specifically the neighbourhood where this apartment is located—Billionaires' Row—and the vacancy rate in the building versus vacancy rates in the nearby area, are those things you would have looked at as part of the appraisal? Can you provide a bit of context in terms of the value of this particular apartment now and in the future?

[Amélie Bouchard]

Thank you for your question.

I don't know if you've had a chance to read the appraisal report. I understand that it's very long and full of information.

Obviously, the chief appraiser of Canada can't be an expert on real estate in every country. We seek out independent, local experts to help us determine the value of assets that we're asked to have appraised.

My information on the market in Manhattan, and in the neighbourhoods where the properties being discussed today are located, comes from the appraisal report provided to me. I didn't go double-check the specific market trends affecting this building. We hired an independent expert to conduct a market analysis and, as you and I can both see, its focus moves from the general to the specific. The expert begins by analyzing the New York State real estate market, and then moves on to the New York City market in each of the five boroughs. He focuses first on Manhattan and then on two neighbourhoods—the Central Park South residential submarket, immediately south of Central Park, where the building of interest is located, and Midtown Manhattan, where comparable properties are up for sale.

Like you, I appreciated the appraiser's analysis. He used information sources routinely consulted to gather these kinds of statistics. He conducted a socio-economic analysis of the neighbourhoods' residents. We also see annualized and monthly data on sales volumes and average sale prices. The report even includes information showing market changes over time, as well as data on recent years and forecasts.

We also see that the markets seem to respond differently according to the type of co-ownership involved. Co‑operatives and condos are covered, and note that a separate analysis was performed for both these market segments.

That's what I notice. There are some similarities in the behaviour of those markets and real estate market trends here. Obviously, we are facing the same, or at least a similar socio-economic phenomenon. Demographically, we note a degree of stability. We see no major population increases in Manhattan or in these neighbourhoods. Forecasts indicate that population numbers could increase slightly over a five-year timeline. As far as I know, the report doesn't contain information about vacancy rates—

[The Chair, Conservative, Kelly McCauley]

Ms. Bouchard, I have to ask you to wrap it up. We're past our time.

[Amélie Bouchard]

I'm sorry. I'll stop there. That's the market information I have. It's the information you'll find in the appraisal report.

[The Chair, Conservative, Kelly McCauley]

Thanks.

Mrs. Block.

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

Thank you, Chair.

I have five minutes. I'll keep my questions pretty tight because I want to share my time with my colleague Mr. Genuis.

Prior to 2019, how many purchases over $4 million were referred to the Treasury Board Secretariat by Global Affairs Canada?

[Samantha Tattersall]

I'll have to follow-up on that question in writing. I don't have that.

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

Okay. You'll provide that to us.

[Samantha Tattersall]

Yes.

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

Thank you very much.

Between 2019 and 2022, how many requests of over $4 million were received from Global Affairs Canada by Treasury Board Secretariat before the policy changed?

[Samantha Tattersall]

On the number of transactions that exceeded their limits, I'd have to come back with an answer.

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

So in essence, a policy was changed in 2022 but you don't have the numbers to give us to demonstrate perhaps why the limit had to increase from $4 million to $10 million.

[Samantha Tattersall]

There are two separate things. The transaction limits are reviewed on a regular basis, and then the policy was updated. Those two weren't tied.

You're asking specifically how many transactions exceeded those limits. I don't have that information with me here today.

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

So you're saying the increase in the limit was not tied to the number of requests TBS would have been receiving that were over that $4 million threshold?

[Samantha Tattersall]

The business case would have been related not just to the transactions but also to a market analysis and a look at the increase in inflation. It also was substantiated by a review by Global Affairs of 23 markets and what the average price of acquisition was for them.