Government Operations Committee on Aug. 21st, 2024

[Stéphane Cousineau]

As mentioned in my opening remarks, the investment that we've made was a long-term value with a net present value of $7.4 million—and that's after doing the option analysis, looking at multiple properties and going for a space that had been reduced and was offering a very cost-effective solution. We believe that purchase was a very good investment for Canadians.

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

I guess my question was more along the lines of a comment that was put out on a news broadcast, where it was suggested that if Canada wanted to play in the big leagues, it needed to spend money.

Do you think that if we don't spend this kind of money, we won't be taken seriously by the United States?

[The Chair, Conservative, Kelly McCauley]

Give us a very brief answer, please.

[Stéphane Cousineau]

As the stewards responsible for the infrastructure around the globe, our main goal is to ensure stewardship and value for money, so we're always looking at that aspect.

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

Thank you.

[The Chair, Conservative, Kelly McCauley]

Thanks very much.

Ms. Atwin, please go ahead.

[Jenica Atwin, Liberal, Fredericton, NB]

Thank you very much, Mr. Chair, and thank you to our witnesses.

I've got questions that are all over the place, but I'll try to keep them coherent.

For the first one, there's a piece about the savings year over year and the reduction of ongoing maintenance costs. Can you speak to what the maintenance costs were for the previous residence in comparison with what we're expecting for the new residence?

[Stéphane Cousineau]

I will turn to my colleague Robin, who can talk about this information.

[Robin Dubeau]

There are different kinds of costs that emerge from real property that we have. You have the ongoing real property costs, like condo fees and other elements. There's also regular maintenance that needs to be done on the asset, and there's recapitalization of the asset that comes on a cyclical basis.

We know that the new official residence has just been renovated, so the investment in maintaining it will be minimal. In comparison with the old residence, we're now saving 50%, or $10,000 a month, on ongoing fees.

That's what I could offer the committee as details.

[Jenica Atwin, Liberal, Fredericton, NB]

Thank you very much.

How about the property taxes for the current residence? Will they be lower than those for the previous one?

[Robin Dubeau]

Yes, all taxes are included in the ongoing costs that we've reported.

[Jenica Atwin, Liberal, Fredericton, NB]

Okay, perfect.

Mr. Cousineau noted that there was $2.6 million in estimated renovation costs for the previous residence, and I note that the previous residence is being readied for sale, so it is not yet sold. Are there any concerns around not having done that maintenance for getting the best value for money in the sale of that residence?

[Stéphane Cousineau]

In fact, the maintenance has always been done. That's our responsibility. What we are talking about here is systems that are coming to the end of their lives. You could think about your water heater and you could think about electricity, so it's not that maintenance hasn't been done.

We are very confident that the sale will go well. Thank you.

[Jenica Atwin, Liberal, Fredericton, NB]

Okay, that was my next question. Is there a confidence, in this current market, that we're going to get the asking price that will hopefully balance out this cost-benefit analysis we're trying to portray today?

[Stéphane Cousineau]

As was mentioned before, we actually have been working very closely with a real estate agent who knows that market very well.

I'll turn to Robin to speak about what we've learned from that market and what we expect.

[Robin Dubeau]

Thank you.

Briefly, I know that we worked with a very experienced real estate broker whom we hired through a competitive process, and we followed the advice of the real estate agent when we put the asset in the firm's hands for the sale. It's being listed at a price that reflects the current condition of the asset, as assessed by our real estate agent according to comparables in the area.

[Jenica Atwin, Liberal, Fredericton, NB]

Excellent.

One of my questions was going to be about going to a third party appraiser or perhaps even a conversation about a broker.

Can you speak to why it's important to have that kind of expertise on the ground in making some of these decisions?

[Robin Dubeau]

Absolutely. It's important to have a third party assessment of our assets. We do it. That asset has been assessed twice. We got an update a couple of weeks ago, just before we put it on the market, to reassure us that we had a good appreciation of the fair value of the asset.

It's also mandated by policy that we do it, but we do it as a matter of course, because it's important for us to know the value of the asset we have in our hands before putting it on the market.

[Jenica Atwin, Liberal, Fredericton, NB]

Excellent. Thank you.

For anyone who might be curious, was the consul general, Tom Clark, involved in the decision to purchase a new official residence?

[Stéphane Cousineau]

As mentioned, this was a smart acquisition. This was actually a process that was sound, policy-compliant, well-documented and exempt from any influence, including from Mr. Clark.

[Jenica Atwin, Liberal, Fredericton, NB]

Thank you.

How many years do you expect the residence to serve the current consul general, or the office itself?

[Stéphane Cousineau]

I'll turn to Robin just to ensure that I have the right number of years.

[Robin Dubeau]

The investment is made on a very long term. The last official residence we owned since 1961, and for this one, there's no indication that we're going to be disposing of it anytime soon. I would say it's going to serve for its lifetime, which is estimated to be between 55 and 60 years.

[Jenica Atwin, Liberal, Fredericton, NB]

Thank you.

[The Chair, Conservative, Kelly McCauley]

Thanks very much.

We'll go back to Mrs. Vignola for two and a half minutes, please.