Evidence of meeting #35 for Public Accounts in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was space.
A recording is available from Parliament.
4:45 p.m.
Acting Assistant Deputy Minister, Real Property Branch, Department of Public Works and Government Services
There's usually a reasoning for whatever decision they've made.
Elections Canada, for example, was going to move to a certain building. Then, in their terms, an event came up that made it impossible for them to move within the timeframe that we'd stipulated. As a result, they stayed in—
4:45 p.m.
Conservative
David Sweet Conservative Ancaster—Dundas—Flamborough—Westdale, ON
In this case, though, from what you know, there was no radical change of operations, was there?
4:45 p.m.
Acting Assistant Deputy Minister, Real Property Branch, Department of Public Works and Government Services
There was a change in requirement expressed by the client that they'd made a decision that they weren't going to amalgamate their regional office with their headquarters, and that they had projected some growth, as it was described to us, thinking they were going to get Treasury Board approval for that growth, and that never came about during that timeframe.
4:45 p.m.
Conservative
David Sweet Conservative Ancaster—Dundas—Flamborough—Westdale, ON
In your opinion, though, would that legitimize the amount of liability that the Crown was exposed to? If I'm not mistaken, the crown would have to sign a ten-year lease with Place Bonaventure, as well as the lease with Place Victoria. Is that correct?
4:45 p.m.
Acting Assistant Deputy Minister, Real Property Branch, Department of Public Works and Government Services
We didn't have to sign the lease with Place Victoria. If we hadn't been able to strike what we felt was a reasonable rate with Place Victoria, we would not have entered into the lease agreement, and they would have had to move.
4:45 p.m.
Conservative
David Sweet Conservative Ancaster—Dundas—Flamborough—Westdale, ON
However, we would have been subject to legal action, their having won a tender fair and square.
4:45 p.m.
Acting Assistant Deputy Minister, Real Property Branch, Department of Public Works and Government Services
No, because part of the strategy was looking at a number of backfill clients that we had in the Quebec region at that time—Veterans Affairs, the crime prevention centre.
4:45 p.m.
Conservative
David Sweet Conservative Ancaster—Dundas—Flamborough—Westdale, ON
What I'm saying is that to mitigate an extreme case of liability, because we did not give the person who won the tender.... We needed to lease that property--that or subject the crown to legal action.
4:50 p.m.
Acting Assistant Deputy Minister, Real Property Branch, Department of Public Works and Government Services
That is correct.
4:50 p.m.
Conservative
David Sweet Conservative Ancaster—Dundas—Flamborough—Westdale, ON
And in doing that, we brought about $17 million of liability. However, I understand you were hopeful about backfilling it—and fortunately we did—but the fact is that was the difference in having to lease that whole space, am I correct?
4:50 p.m.
Acting Assistant Deputy Minister, Real Property Branch, Department of Public Works and Government Services
I'm not sure if it would be $17 million, because a lot of that goes to the various operating costs of the asset, which they would have incurred. But certainly there would have been a profit element in there that—
4:50 p.m.
Conservative
David Sweet Conservative Ancaster—Dundas—Flamborough—Westdale, ON
Do you know what the percentage of occupancy is in Place Bonaventure right now?
4:50 p.m.
Acting Assistant Deputy Minister, Real Property Branch, Department of Public Works and Government Services
I know all the space that we lease in that building is occupied, and I think we have around 15,000 metres of space in total in that building.
4:50 p.m.
Conservative
David Sweet Conservative Ancaster—Dundas—Flamborough—Westdale, ON
Okay, but you're not aware of what the historical occupancy rate was or what it is today?
4:50 p.m.
Acting Assistant Deputy Minister, Real Property Branch, Department of Public Works and Government Services
No, I don't. The building was a convention centre before, and they were in the process of converting it into office accommodation, so I'm not sure what the history of the building was prior to that.
4:50 p.m.
Conservative
David Sweet Conservative Ancaster—Dundas—Flamborough—Westdale, ON
Mr. Arès, I just need you to answer, and please just be direct.
Mr. Fitzpatrick was asking you about a memo from May 3. At the end of the memo it says, “This partly explains why it is preferable that I not write a memorandum to the minister on this matter because it would not say what certain interest groups would want it to say.”
Could you please identify very specifically who those interest groups, in this case, would be?
4:50 p.m.
Regional Manager, Assets and Facilities Management, Department of Public Works and Government Services
Which paragraph are you referring to?
4:50 p.m.
Conservative
David Sweet Conservative Ancaster—Dundas—Flamborough—Westdale, ON
This is the last sentence in that memo, May 3.
4:50 p.m.
Regional Manager, Assets and Facilities Management, Department of Public Works and Government Services
As I said earlier, I had answered that request. On May 3rd, 2002, we had not yet obtained the new rent of 308 $ per square meter that had been renegotiated with Place Victoria. The information I had at the time to renew the lease at Place Victoria was based on the rent of the fourth bidder which was 430 $ per square meter. Obviously, a rent of 430 $ per square meter was not advantageous for the Crown. It was clearly higher than —
4:50 p.m.
Conservative
David Sweet Conservative Ancaster—Dundas—Flamborough—Westdale, ON
Mr. Chairman, I have a point of order.
4:50 p.m.
Liberal
The Chair Liberal Shawn Murphy
Mr. Arès, I thought the question was pretty clear. You were talking about certain interest groups in the last sentence of the last paragraph, which you signed. I think the questioner wants to know which interest groups you were talking about.
Am I correct there, David?
4:50 p.m.
Conservative
4:50 p.m.
Regional Manager, Assets and Facilities Management, Department of Public Works and Government Services
I had nobody in mind when I wrote that. At that time, it was quite clear to me — and I said it — that if the decision to sign a lease at 430 $ per square meter was maintained, but without knowing who would be the beneficiary...
4:50 p.m.
Conservative
David Sweet Conservative Ancaster—Dundas—Flamborough—Westdale, ON
That's okay. There are no specifics.
Ms. Beal, you were the ADM at the time, and there have been three ministers identified—Minister Gagliano, Minister Boudria, and Minister Goodale. Who did you receive direction from to cancel this lease, and in what form did it come? Did it come in written form or verbally?
4:50 p.m.
Assistant Deputy Minister, Real Property Program Branch, Department of Public Works and Government Services
I believe I have already indicated that I did not receive any direction directly from the minister's office in this regard. My instructions to hold the activity would have presumably come via either the associate or the deputy minister.
You would understand that there is a lot of non-written communication between the office of the deputy and the associate. There is also communication at meetings that I would have attended with the minister's office. But at no time on this file do I recall direction being received from the minister's office on this. It's five years ago, so my recollection is a little vague, but I believe it would have come from the associate deputy minister of the day to hold and to look up analysis and options with respect to this file.