Public Accounts Committee on Jan. 31st, 2007

[Mario Arès]

Which memo are you referring to?

[David Christopherson, NDP, Hamilton Centre, ON]

It's from July 5, in the fourth paragraph.

[Mario Arès]

Indeed, we were then at the planning stage aimed at establishing if the investment would be advantageous or not. The client had already expressed his needs and we were working jointly with him. At the time, we received from the office of Mr. Gagliano or Mr. Jean-Marc Bard a request not to issue a call for tenders for this space. We were asked to wait for directives before going forward.

We still continued our analysis because we had a preliminary step to conclude. According to the timetable, we had to be able to leave the building by April 1, 2003. Going backwards, the call for tenders had to be issued at the latest at the beginning of September 2001, if I am not mistaken.

[David Christopherson, NDP, Hamilton Centre, ON]

Excusez-moi. I'm not sure we're on the same page. I don't understand your answer at all.

I was referring to the fourth paragraph, where you say—and this is all I'm asking about specifically:

It is also important to remember that CED was burned more than three years ago with the abortive move of its office to Place Ville-Marie. The client is watching us closely on this project. Failure is not an option; our image and reputation are at stake.

I was just asking what you were referring to. What are we talking about here, when we talk about “burned three years ago”, and why were you so concerned about how you looked in this, in addition to your other concerns?

[Mario Arès]

When the previous lease expired, we had faced a similar situation. I was not involved at the time but Canada Economic Development has told me that the same analysis had been carried out relating to a move. At the time, if I remember correctly, CED was to move to Place Ville-Marie. For reasons I do n ot know — and I will let CED people give you the details, if they are able to do so — this move did not happen.

At the time, the client was miffed. I remember that my contact at CED told me that they wanted to avoid a repeat of this situation. This is one of the reasons why we then used the services of Consulting and Audit Canada, in order to ensure the integrity of the process.

As far as the move to Place Ville-Marie is concerned, in 1999 or 1998, I don't know if the people at CED would be able to answer.

[David Christopherson, NDP, Hamilton Centre, ON]

I'm assuming you felt your department had made some errors that caused them this grief, and that's why you were worried about how you would look this time.

[Mario Arès]

I am unable to answer that question. I was not aware of the situation. I do not know what happened at the time.

[David Christopherson, NDP, Hamilton Centre, ON]

I don't want to get too lost in this. I don't know why I'm having so much trouble getting a straight and complete answer.

You must have known something, because you made the comment that “they were burned three years ago”, and you said: “The client is watching us closely. Failure is not an option; our image and reputation are at stake.” All I want, sir, is a confirmation that you were worried as much about your image in this process, because of a previous problem, as you were about actually doing the job at hand; that's all. Or does it mean something else? It's not standard office talk, that's all.

[Mario Arès]

That is a fact. At the time, the service provided to the client was very important to me and I wanted to make sure that, this time, the move would happen according to the rules.

[David Christopherson, NDP, Hamilton Centre, ON]

So it would be standard language in all of your e-mails dealing with all of the files to tell everybody that your reputation was at stake.

You're making this a bigger thing than it is, sir.

[Mario Arès]

I wanted to emphasize the fact that this file was a priority in order to avoid any misstep in the tendering process and because I saw that there were undue delays. The process had been determined by the Minister's office. I did not want to risk missing the deadline set for concluding the matter.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mr. Christopherson.

Mrs. Sgro.

[Judy Sgro, Liberal, York West, ON]

Thank you.

My question is to Mr. Marshall. The Auditor General says there's $4.6 million in additional costs, and you say it's $2.1 million in lost rent. When an audit is going on, I assume you must have fairly lengthy discussions with the auditor when issues like this come up. Were you unable to convince her of the way you figured these things out versus the way she or her department figured them out?

[David Marshall]

We did have extensive discussions around this number. We explained how we saw the number, and the auditor on the job made a decision to see it the way they did. We explained where we got our number, and I guess the auditor would have to explain how they got their number.

[Judy Sgro, Liberal, York West, ON]

It seems awkward.

[David Marshall]

It is awkward.

[Judy Sgro, Liberal, York West, ON]

You're all government, and you can't figure out the numbers and do a very convincing job of what your numbers were. So I have to go with the assumption that the auditor did her work and her numbers were correct.

Mr. Arès, at a very early stage in the process the department was asked to put a hold on this project but didn't. Why didn't they? Can you explain that to me?

[Mario Arès]

Could you repeat your question?

[Judy Sgro, Liberal, York West, ON]

At an early stage in the process the department was asked by the minister's office to put a hold on the project, and you did not put a hold on it. Why not?

[Mario Arès]

We could continue the analysis of the project up to the call for tenders and not issue any call for tenders. As to why the Minister's office asked us not to go forward, I do not know. I cannot answer that question.

[Judy Sgro, Liberal, York West, ON]

I guess the question is, why didn't you put a hold on the process, since the minister asked you very early on to do that?

[Mario Arès]

No, the minister did not ask for the process to be stopped. He was asked the question and his answer was that we could continue the analysis, the feasibility study and the performance study, but that we should stop before issuing a call for tender. That is what we did.

[Judy Sgro, Liberal, York West, ON]

At what point did EDC decide they had sufficient space? Initially they indicated that they were going to require a move, and then they changed their mind and wanted to stay. How much time did you have between them saying initially that they were going to move, and the call back to say they were going to stay where they were?

I would expect that when a major department like that is going to make a change there's a fair amount of notice to you that they are going to require additional space, are not going to renew the lease, or whatever. How much time had evolved when you received that notice?

[Mario Arès]

As to the project I managed, it was completed according to our regional strategy which was to issue a call for tenders and to find space for CED. That project was completed. The contract with Place Bonaventure was signed on April 2nd. That was the deadline set for giving that contract, which we did. It's later that CED decided to remain at Place Victoria. However, I am unable to answer that question because the decision was made at another level. So, until April 2nd, CED accepted to move to Place Bonaventure. We even have a letter to that effect in the file, dated March 26th or 29th, from Mr. Gladu — who was the boss at the CED at the time — indicating that he had accepted the results of the call for tenders, which is to say that they would move to Place Bonaventure.

[Judy Sgro, Liberal, York West, ON]

How often do departments change their accommodation requests once arrangements have already been made?