Public Accounts Committee on March 21st, 2007

[The Chair, Liberal, Shawn Murphy]

Colleagues, I would like to call the meeting to order.

Welcome, Mr. Gladu.

Mr. André Gladu was the previous deputy minister of the department of regional economic development for the province of Quebec during the Place Victoria issue, which we have under investigation. We did have one or two hearings on this. It was decided by the committee to call in Mr. Gladu, as he was the deputy at the time.

This meeting has changed a little bit. We had originally scheduled it for longer. What I'd like to do is allocate up to an hour for this--we may not need an hour, but if we do--with Mr. Gladu. Then Dr. Ned Franks will give a presentation. As everyone is aware, Dr. Franks has been working with us for approximately six months now on the protocol. That is in its final stages, so we'll invite Dr. Franks to the table at 4:30.

I do want to remind committee members that the bells will be ringing at, I understand, 5:15. The meeting will adjourn then, or shortly after that.

Mr. Gladu, I certainly want to welcome you to the committee. I want to thank you very much for coming. I understand you're retired and are not part of the department right now.

Do you have an opening statement or anything you want to say prior to receiving questions from the committee members?

[André Gladu, As an Individual]

You made reference to the role I played between 1999 and 2003. I believe it is important to mention a number of dates connected with the decision of the Economic Development Agency of Canada not to move to Place Bonaventure. You must remember that our lease ended on March 31, 2003 and that all discussions with Public Works Canada with respect to preparing the process had begun more than a year and a half earlier, starting in December of 2000.

I know that as part of the testimony received thus far, a number of questions were put to the person who succeeded me, Ms. Michelle d'Auray. I reread those statements, and I must say I was very comfortable with what had been said. Indeed, it covered all the facts that I was aware of at the time.

So, I really don't have any other comments to make for the time being; I will simply try to answer your questions. They could be questions that were not asked of the person who replaced me or questions for which she was unable to provide a complete answer.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mr. Gladu. Merci beaucoup.

What I'm going to do, colleagues, is have one round of six minutes each, in this order: Liberal, Bloc Québécois, Conservative, New Democratic Party, Liberal, and Conservative. We might have another five minutes at the end, and we might not.

For the Liberals, who is going to start? Mr. Rodriguez, please.

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

Mr. Gladu, for the Committee's information, could you briefly give us your version of events with respect to the decision not to move? What exactly happened?

[André Gladu]

Well, what basically happened was this: the Economic Development Agency of Canada and all the departments that came before it, and which had responsibility at the federal level for economic development, have always had offices at Place Victoria, which is also called the Stock Exchange Tower. I believe employees have been working there for more than 30 years.

Every time that a lease is ending and there is talk of a move, it's important to realize that the prospect of moving does not always please the staff. I think that reality has to be considered here.

In December 2000 or January 2001, in accordance with established procedures, we began discussions with Public Works to see whether there was office space that could be meet our requirements at the end of our lease, which was up on March 31, 2003. That is how the whole tendering process began. As you know and heard through previous testimony, the least costly building that could meet our needs was Place Bonaventure.

As administrator and Deputy Minister of the Economic Development Agency of Canada, I was quite comfortable with the idea of moving to Place Bonaventure, even though I knew for a fact that it could be difficult to manage for the reason I mentioned earlier, which is that employees had been working there for more than 30 years and did not necessarily want to move. However, at the time, we believed that Place Bonaventure could fully meet our requirements, because we were beginning to need more space.

In the course of that whole process, we also had to determine whether we would keep employees working at the office on the Island of Montreal—for example, the ones who look after SMEs on the Island of Montreal—in the same office space. We therefore informed Public Works in September of 2001 that it was possible employees working at the Economic Development Agency's regional office on the Island of Montreal would not move.

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

How many people were involved?

[André Gladu]

About 30 people, as I recall.

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

Originally, you needed more space. Is that correct?

[André Gladu]

Originally, we needed more space because we had been given additional responsibilities. As well, some employees who were in charge of the first infrastructure program were housed in another building. So, we needed extra space to repatriate those employees.

I don't want to go into too much technical and administrative detail, but as Deputy Minister, when I received my annual budget, there was some flexibility there in terms of the way I could use it. Because we had a very significant volume of work, we had already decided to increase our human resources and lower other types of expenditures. We were talking about 30 employees at most. In fact, when the move was to occur, more than 20 had already been hired and appointed to their positions.

I just want to quickly remind you of one fact. In September of 2001, Public Works was informed of the possibility that employees on the Island of Montreal might not move. On February 5, 2002, we officially informed Public Works that we did not want to move the Island of Montreal office and that we preferred it to be located on the actual Island of Montreal, and specifically in the eastern part of the city.

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

That is where it is now.

[André Gladu]

As far as I know, yes.

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

Fine.

All of that ended up with the decision not to move. Who made the decision not to move?

[André Gladu]

Initially, Public Work took responsibility for that decision. Following a letter from Mr. Claude Drouin, which you have read and heard about, Public Works began negotiations with the owners of Place Victoria, the Stock Exchange Tower. Because they had greatly reduced the cost of the space in relation to what they initially were asking for, Public Works felt that we could stay in the Stock Exchange Tower and that it would be able to rent the space it had already leased at Place Bonaventure.

[The Chair, Liberal, Shawn Murphy]

You have half a minute.

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

In your opinion, was that decision relevant?

[André Gladu]

It depends on your viewpoint. For myself, as administrator of the Economic Development Agency of Canada, I would have preferred to move because it would have given us more flexibility in terms of office space.

Furthermore, because our offices had been at the Stock Exchange Tower for a very long time already, and that terms of the negotiations between Public Works Canada and the owners of the Stock Exchange Tower, once the leased had been renewed for five years—which will be ending next year—we were unable to make the slightest improvement in terms of bringing down costs. As an administrator, that left me with less flexibility.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Monsieur Rodriguez.

Thank you very much, Monsieur Gladu.

Monsieur Laforest, you have six minutes.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Good afternoon, Mr. Gladu.

We held a meeting on January 31. Prior to the meeting, we had received a great deal of documentation from Public Works and from the Economic Development Agency of Canada. A document dated April 26, 2002 which was forwarded to Mr. Séguin by Mr. Patrick Dolan, of Public Works Canada, states that there were negotiations with the owners of Place Victoria. It says that the latter confirmed on Thursday by telephone that the gross rate of $308 a square meter included upgrading of all base buildings.

In another document, which is actually a memo to the Minister of Public Works, Mr. Goodale, signed on June 18, 2002, it talks about a rate of $308 a square meter excluding renovations. What exactly happened between the time a rate including improvements—which was therefore advantageous to the government—was successfully negotiated and the time when the Minister was advised to sign an agreement providing for a rate of $308 a square meter excluding renovations?

[André Gladu]

I simply can't answer that question because you are only referring to memos and documents from employees of Public Works. I was in no way involved in the discussions that took place between the two dates you have referred to.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

So, you are unable to answer anything relating to Public Works Canada.

[André Gladu]

We never were in any way involved in discussions, negotiations or talks between the Department of Public Works and owners, of either Place Bonaventure or the Stock Exchange Tower. That is perfectly normal. That is the usual process. The Department of Public Works is the one that does the negotiating.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

The fact remains, however, that you had initially made certain requests. That is mentioned in a number of places. You were looking for certain fit-ups in order to facilitate access for the disabled, as well as improvements relating to computer equipment. In the end, you agreed to do without them.

[André Gladu]

As I recall, the only improvement to have been made related to handicapped access.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

And that was at the owner's expense.

[André Gladu]

I honestly don't remember, since I wasn't involved in those discussions. However, it is true that during the term of that lease—for five years, in other words—the Economic Development Agency of Canada was unable to make any improvement whatsoever, so as to avoid any additional costs.