Government Operations Committee on Aug. 21st, 2024

[Garnett Genuis, Conservative, Sherwood Park—Fort Saskatchewan, AB]

Well, that doesn't make any sense then, because you have ongoing carrying costs associated with both properties for as long as you own them.

Now, in the context of selling one property and purchasing another in New York, the Government of Canada may have had to pay but may have been exempt from the following: capital gains tax, the U.S. Foreign Investment in Real Property Tax Act, state and city transfer taxes and New York's mansion tax.

Which of these taxes or costs did you have to pay, and which, if any, were you exempt from?

[The Chair, Conservative, Kelly McCauley]

I'm afraid no time has been left for an answer, so we'll get back to it again, or perhaps you can commit to putting that in writing to us.

Mr. Longfield, welcome to OGGO. Now it's your turn. Go ahead, sir.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you, Mr. Chair. and I think it's okay that we've just cut to the next speaker since the witness wasn't being allowed to answer questions in the first place.

Maybe I could go to the statement earlier about the life cycle of the building itself, looking at 55 to 60 years. To put that into context, I've visited many consular offices in my role as member of Parliament.

One of them was the consular office of India, which was next door to the house of the Leader of the Opposition, who was Andrew Scheer at the time. The consul general was Vikas Swarup, who was working with me and the University of Guelph to facilitate the setting up of a centre for Indian studies at the University of Guelph. The University of Guelph subsequently started that centre and has appointed an interim chair for Indian studies, who is visiting from India.

So the important work that goes on in a consular office is not strictly entertainment. There is some socializing, and it's a different venue. We talked about jazz that night as well, but we were really focused on creating a centre for Indian studies at the University of Guelph.

Since then, we've had a change in the Leader of the Opposition, and we've had a change in the consul general from India.

What's a normal time for a consul general to occupy one of the residences that their government provides?

[Stéphane Cousineau]

Chair, I welcome the question. I will actually turn to my colleague Mark Allen, who is DG for North America and who can talk about these operations.

[Mark Allen]

We've recently established set time frames for diplomatic postings. In the United States it is four years.

[Lloyd Longfield, Liberal, Guelph, ON]

That's terrific.

Part of the arguments the Conservatives are making is that this is a house that the Prime Minister is giving to one of his buddies, one who was also a moderator at the Conservative leadership convention, which kind of disconnects.

Is any staff involved, including the acting government lead at the consular office, in the selection of properties?

[Stéphane Cousineau]

Mr. Chair, once again, I welcome the question. The process, the decision-making, is all managed at HQ, and there's no influence from any staff other than the people responsible for the stewardship of the real property.

[Lloyd Longfield, Liberal, Guelph, ON]

That's great. Thank you.

I know we will be getting some of this in writing, as was requested, but on the cost savings that have been determined by the independent body—not a political organization that's giving the Liberal government any money—for a smaller location versus the location that we have been occupying since the 1960s, could you maybe comment just in general? I know we will be getting details.

[Stéphane Cousineau]

Mr. Chair, thank you very much for the question. I will turn to my colleague Robin, because indeed we have downsized, and there are going to be definite savings tied to this.

[Robin Dubeau]

Thank you, Mr. Chair.

The question is about the cost savings, and of course when you look at the cost of renovating an aging property, this is a cost that you're not really going to be recouping because you're only bringing an asset back to where it should have been, in this case by investing or putting down $2.6 million.

That saving alone is quite significant, but if you look at the difference in prices as well, we're anticipating quite a substantial profit out of the transaction. So those are the two elements for savings in addition to the ongoing savings that you mentioned.

[Lloyd Longfield, Liberal, Guelph, ON]

Thank you.

I have one quick question on the “Future of Diplomacy”, the report that was tabled in the House about a year ago. How does this transaction match up with the study that was approved by the Senate as well as by the House of Commons committee?

[Stéphane Cousineau]

Mr. Chair, thank you very much for the question.

This investment is actually very much aligned with the “Future of Diplomacy”, not only with respect to what we are going towards in terms of investments but also in terms of how and the introduction of agility, effectiveness, cost-effectiveness and, again, value for money.

[The Chair, Conservative, Kelly McCauley]

Thanks very much. That is your time, sir.

Mrs. Vignola, go ahead, please.

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

Thank you very much, Mr. Chair.

My take-away from your presentation, Mr. Cousineau, is that one problem with the current location is that it's a co‑operative, and that using the residence for work-related events seemed to somewhat disturb—though it's not entirely clear—co‑operative members. The board of directors must have changed a lot in the last 60 years for it to become a problem, wouldn't you say?

[Stéphane Cousineau]

I thank the member for her question.

You're right, the board members have changed. We noticed that the rules became stricter in recent years and things were more difficult.

Combined with the cost and the other factors I mentioned, that was one of the factors that forced us to reach the decision we made.

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

Okay.

Of course, a representative of Canada also had to be a member of that board of directors. Did he have no influence?

[Stéphane Cousineau]

Mr. Chair, I'll rely on Mr. Dubeau, since I'm not exactly familiar with this board of directors and its operations. However, we are part of it, yes, and we have voting rights. It's a large building.

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

Thank you very much.

Generally speaking, there are three types of properties in New York, especially in Manhattan: duplexes, condominiums and co‑operatives. Each has a unique operating approach. I see that none of the 21 properties visited were duplexes. Is there a reason for that? Is it a problem for a country to own a duplex, in whole or in part?

[Stéphane Cousineau]

That's a great question. One of the things we have to consider is the whole security issue.

I'll call on my colleague Mr. Dubeau to give you more information about these criteria.

[Robin Dubeau]

That's a good question.

Although we haven't ruled out the possibility of buying a duplex, they have two special characteristics. They're often more expensive, because the owner has a private address and is also responsible for maintaining the outside, not just the interior. So a duplex is often very expensive.

Furthermore, since they're often located at ground level, the many security-related renovations we would have to complete would be quite costly. That's why buying a duplex is not very attractive.

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

Thank you.

[The Chair, Conservative, Kelly McCauley]

Thanks very much.

Mr. Bachrach, go ahead, please, sir.

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

Thank you very much, Chair.

You know, we've heard in previous testimony that Steinway Hall, which I believe is the heritage building that the new apartment is located in, is somewhat different from Steinway Tower, but they're connected and associated. I guess my first question is whether they share the same residential address.

[Stéphane Cousineau]

Mr. Chair, the answer is simple: Yes. Actually, the annex, which is a skyscraper, is the new annex that was added later on, and it is at the same address.

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

Steinway Tower, Mr. Cousineau, has been a somewhat controversial building. I was reading in one report that according to the Manhattan district attorney, the construction company that built Steinway Tower, Parkside Construction and its affiliates, stole more than $1.7 million in wages over three years from about 520 workers at the tower and seven other high-rise buildings. The company also hid nearly $42 million in wages from state insurance officials to avoid paying millions in workers' compensation premiums.

Was Global Affairs aware of this controversy during the evaluation process? Was the controversy around the construction of Steinway Tower considered as a risk factor when it came to the perception and brand image that would come with locating Global Affairs' operations at that address?