Public Accounts Committee on Jan. 31st, 2007

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

Considering that CED stayed at Place Victoria, did you have to look for other space for some of your staff? Did the department do indirectly what it could not do directly? By staying put, have you had to move some employees or have you had to locate some new employees somewhere else?

[Michelle d'Auray]

As I said at the beginning of the meeting, Mr. Chair, a decision had to be made within the first project about the relocation of the regional office of Montreal Island. That decision was made and that office has been moved in the eastern part of the city. So, those employees have left Place Victoria, the headquarters, and have moved to the eastern part of the island.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

Is it the same Secretary of State who started the process to call for tenders and who finally decided that CED would stay put?

[Michelle d'Auray]

I believe the Secretary of state at the beginning of the process was Mr. Martin Cauchon. At the end of the process, it was Mr. Drouin.

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

Mr. Marshall, when you sign a lease such as the one at Place Bonaventure, are there standard cancellation clauses?

[David Marshall]

I believe there would be, yes.

Tim.

[Tim McGrath]

There are, but it's with a cost, which is the same as subletting-type agreements. If we don't need the space, we have the right to sublet it to other groups that may be interested.

There are standard termination clauses, but again based on a financial calculation that's normal industry practice.

[The Chair, Liberal, Shawn Murphy]

Mr. Fitzpatrick, you have the last five minutes.

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

I understand that the Minister of Public Works and Government Services has to sign off on these leases, agreeing or disagreeing with them. I would like to have that document filed with the committee, so we can see it.

Can that be provided, Mr. Marshall? I don't want a long answer. Yes or no?

[David Marshall]

Mr. Fitzpatrick, unfortunately it's not clear. That's what I want to say.

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

Okay, I'll go to the next question, because I don't want to use up my time.

I'm convinced that if this is the process we go through to procure things, we have a lot of work here with the new government to straighten things out, because this is pathetic.

Mr. Sloan, would you agree that what happened does not comply with what you understand to be the rules for procuring leased property by the Government of Canada?

[Bruce Sloan]

Mr. Chairman, we have certainly looked at the competitive tendering process and felt that it complied with the rules and regulations of the government and was done appropriately.

Our concern was that once the competitive tendering was completed and direct negotiations were entered into, then the requirements were not met.

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

Thank you very much.

This is for Mr. Marshall. I read your answer from June 8--and it's always my understanding that when we're before the committee it's the same as being under oath--to a direct question from Mr. Williams about the disadvantage of staying in the same premises, and I'm just going to take it right from the transcript:

Mr. Williams, clearly the economics and the analysis showed that it would have been cheaper for the agency to move.

Now today we are being told a different story. It would be cheaper for the agency to stay at the same place. In a court of law, inconsistent statements like that raise serious questions about credibility. That's going to be my comment on that.

Then the follow-up question on this:

We proceeded on that basis, and towards the last minute, so to speak, we received a request from the ministry to remain where they were.

That was from the ministry? We've been told there'd been nothing from the ministry here, but we've got testimony on June 8 saying there was.

Then we had a screw-around about who the minister was. A follow-up question really tried to pin down who the minister at the time was. Mr. Marshall's answer: the Minister of Public Works was Mr. Goodale at the time, not Mr. Gagliano, not Mr. Boudria. It was Mr. Goodale. So we've been going around in circles here, and there are a lot of fairly significant inconsistencies here.

I have another question about these premises--because there are a lot of documents on them. I want to know whether these premises are now fully accessible to the handicapped. If you don't know the answer, I want to know the answer, and I want it forthwith. I don't want to be waiting five months for that.

I've asked for this undertaking from Mr. Marshall, and I want to get a full explanation on it.

[David Marshall]

You would like an undertaking to know if they are accessible?

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

Right.

I'm going to raise another issue here that I think is quite crucial. The June 8 one doesn't seem to show that there's an analysis. We asked for an analysis a long time ago, and we got screwed around by your department left, right, and centre on this thing. Now, today, we get some sort of analysis.

I'm going to ask Mr. Sloan something. Did you ever understand that this analysis--and I'm trying to piece it all together--that we're being given today existed when you reviewed these matters?

[Bruce Sloan]

Mr. Chairman, I haven't seen the binder that the department provided to the committee today. We looked through the files, both in the region and at headquarters, quite carefully and drew our conclusions based on the documentation that we saw in the files at that time. We would be happy to take a copy and look at it.

[The Chair, Liberal, Shawn Murphy]

Mr. Fitzpatrick has asked a lot more questions than there have been answers to. You're out of time, Mr. Fitzpatrick. I'm going to ask if there are any answers that you have to all the statements. So we'll hear from Mr. Marshall, and anyone else for that matter, and that's it, Mr. Fitzpatrick.

[David Marshall]

Yes, Mr. Fitzpatrick, at the time when we were here before you on June 8, I was going on the basis that if the requirements were the same, it would be cheaper for them to move. That's what our analysis showed at the time, but then there was a new requirement, and when you looked at the new requirement, the analysis showed that it would be cheaper for them to stay where they were if you could backfill the other property. We felt we could backfill the other property, and that is the conclusion on that matter.

As far as whether we discussed these various analyses with the Auditor General, I do believe we did on a working basis.

Mr. McGrath, perhaps you can discuss that.

[Tim McGrath]

We did. We had discussions about the IARs and the transactions themselves and even the document provided to us by the Auditor General showing that the rate negotiated was $308 a metre. So even at that, I feel the Auditor General knew that the rate was different from the rate they were using in their analysis. This was in reference to the Claude Séguin e-mail to me. So that information was in there.

Also, when we were asked to provide information, we were told by one of the auditors not to go to any great lengths to reproduce anything. If we could get it to them quickly, that was great. So there are some issues that need to be resolved in terms of the information. Mr. Sloan did point out, rightly so, that we should be going back and updating our investment analysis once the final document or final numbers are struck, and we agreed to that. I think that's where part of the shortcoming is in some of the information.

In terms of providing that particular analysis to this committee, I don't believe we were requested by this committee to provide the financial analysis on Place Victoria. Certainly on the Hamilton building we were asked for specific information concerning that transaction in Hamilton. If we have been asked, we'll go back and check to make sure that we do provide the information, but I don't believe we were asked for a financial analysis. We were asked for a considerable amount of correspondence between us and DEC at the officials level, but we had offered to provide any type of information that we could.

[The Chair, Liberal, Shawn Murphy]

Okay, then, thank you very much, Mr. McGrath.

That concludes the hearing.

Do you have a point of order, Mr. Christopherson?

[David Christopherson, NDP, Hamilton Centre, ON]

If we're having another meeting, I can take it up at the next meeting, Chair.

[The Chair, Liberal, Shawn Murphy]

We're going to get some documents back too.

Does anyone have any brief closing remarks? We're going to adjourn and then go back in camera. Are there any closing comments from any of the witnesses?

[David Christopherson, NDP, Hamilton Centre, ON]

I am going to raise this just because it's important enough, if you'll allow me, and I'll leave it for you to decide how to handle it.

Mr. Marshall, in answering for Mr. Arès, said that you should take a look at what he knew after he wrote this, in terms of the original numbers weren't what they ended up being in the final lease and that changed his opinion. But I want to bring to your attention the two sentences that are omitted on the photocopy of the binder, which I still would like an answer to, given that it's not a machine error, given that the page number has survived and the paragraph is above that, and I'm not going to let that go. This states, interestingly, “Ever since we approved the lease...on April 2, 2002...”.

So would Mr. Arès not be familiar with all the new implications of the new lease, what wasn't required that was asked for before, the new rate as opposed to what he thought it would be? Would all that not be known to him, since he references it in his first sentence before he goes on to make the comments I referred to earlier, negating Mr. Marshall's answer of look at what he thought later when he knew all the updated details?

[David Marshall]

Mr. Christopherson, I am really at a loss to understand what is going on with this document. I'm not sure. I think if you looked at the French version, it is indeed complete, as far as I can see.

[David Christopherson, NDP, Hamilton Centre, ON]

One could argue it's a little harder to take out there, but yes, it is. You're right, factually correct.