Public Accounts Committee on Jan. 31st, 2007

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mr. Sweet.

Thank you, Mrs. Beal.

Madam Brunelle.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

Good afternoon, ladies and gentlemen.

A few things are very troubling in this file, We are told that CED needed more space and that is why Place Bonaventure was considered. Suddenly, another decision was made. Mr. McGrath provided some bits of information but I'm still very concerned. Take the example of what happens in our ridings. When we ask government offices to move to another region, there is a very long lead time. Those are long-term plans and I find it difficult to believe that the strategy could be changed overnight.

I have another concern. I see in the report on the Auditor General that, since her report of 2002, the federal government's Expenditure Review Committee has determined that our real estate activities could lead to savings of about one billion dollars over five years. That is why the department started a strategic initiative based on this financial objective. At least, I wouldn't think that your strategy was to make sure that you would pay more in this case. I find it very difficult to understand how the decision could be reversed when you got a winning bid through a call for tenders. The Auditor General has reminded us that the department has the power to impose a solution to his clients relating to their space needs. Since you had a strategy, why did you not use this power to force Canada Economic Development to move?

[Carol Beal]

In 2002 the department was very much focused on client service. The changes that have come into place with respect the downsizing of space, achieving expenditure savings for the crown and so on, have been changes that have come in in the last few years. So part of our mantra, part of our philosophy, was to attempt to satisfy, as best as possible, where it was economically justifiable for the crown to do so, the desires of our client operation. We were severely criticized for not satisfying them enough. The dual role of service provider and policing agent was one that caused many people in the department to be somewhat schizophrenic. And at the time our deputy and our associate deputy were very strong on having to improve the relationships with our customers, so as long as there was a defensible business case to proceed then we would try to accommodate the needs of our customer department.

Now, the fiscal situation and the philosophy of the department has moved towards reducing the overall cost of accommodation to the crown, and achieving some economic savings, which have already been booked in the books of Canada. So the philosophy has shifted to a much more rigorous view, where economics may become more of a driver than the client.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

Excuse me but you're telling us that you wanted to satisfy your clients when it was economically justifiable. Is an additional cost of 4.6 million dollars justifiable? Should Canada Economic Development not have used that money for something else, for economic development perhaps, instead of wasting it?

[Carol Beal]

The money, with the exception of the direct cost to the client here, was Public Works' money. The decision, as has been pointed out, was based on an economic analysis that we did. We showed that the transaction, in and of itself, netted a positive benefit to the crown of approximately a million dollars in not moving this client. The costs to the crown have been incurred by us fulfilling our obligations under the lease tender to bring the Place Bonaventure space on and not being able to backfill that space as quickly as we had anticipated.

So with respect to CEDQ, leaving CEDQ in situ at that point was numerically correct.

[Paule Brunelle, Bloc, Trois-Rivières, QC]

I would like to ask a question, Mr. Chair, if you will allow me. Would it be possible to get a document indicating the names of the owners of Place Victoria and Place Bonaventure in 2002, please? Thank you.

[The Chair, Liberal, Shawn Murphy]

Okay.

Ms. Beal, if you could provide us with that information...to the clerk as soon as possible.

Merci, Madame Brunelle.

Mr. Poilievre, five minutes.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Let's summarize. A competition was held, a winner was named, politicians intervened, the winner became the loser and the loser became the winner, and instead of one affordable building, the taxpayers got a more expensive building and an empty building. Is that an accurate assessment? Have I made any mistakes in the chronology?

Madame d'Auray.

[Michelle d'Auray]

Mr. Chair, I don't think there was a loser per se because Place Bonaventure was leased, if I....

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Everybody is a winner except the taxpayers, who ended up paying $4.6 million more than they needed to?

[Michelle d'Auray]

I would defer to my colleagues at Public Works with regard to the analysis they did in terms of the cost-benefit.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

I have the analysis of the Auditor General, who says here that “The Agency's request not to move, combined with the lack of adherence to established guidelines, has cost taxpayers an additional $4.6 million.”

Was it your decision not to move? Was it your decision to incur this extra $4.6 million?

[Michelle d'Auray]

The only response I can make to that, Mr. Chair, is that the request was made by the Secretary of State at the time. If possible....

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Okay.

Was it his decision or your decision?

[Michelle d'Auray]

The request was made—if I may—to the Minister of Public Works at the time to remain in Place Victoria, if possible. A cost-benefit analysis was done by Public Works that it was possible to do so, and the decision was rendered in a letter to the Secretary of State from the Minister of Public Works agreeing to the request.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Okay.

The decision you have just confirmed was made by the Minister of Public Works. You have just confirmed that, because you said it was made in a letter from the Minister of Public Works.

[Michelle d'Auray]

The response that was received, Mr. Chair, to the letter from the Secretary of State at the time came from the Minister of Public Works, agreeing to his request.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Okay.

The Minister of Public Works at that time was Mr. Goodale, right?

[Michelle d'Auray]

That is the response from Mr. Goodale.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Okay.

Mr. Goodale made this decision to cost taxpayers $4.6 million more than they would otherwise have paid?

[Michelle d'Auray]

If I may, Mr. Chair, Minister Goodale responded in his letter saying that he agreed to the request, since the....

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

From his Secretary of State.

[Michelle d'Auray]

From the Secretary of State.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Okay, from the....

[Michelle d'Auray]

It wasn't his Secretary of State. From the Secretary of State, if it were possible to do so, and the analysis... I will defer to my colleagues, because....