Public Accounts Committee on June 8th, 2006

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

Two years ago the Ministry of Defence turned down this JDS opportunity. Earlier you stated that the RCMP had needs but did not take advantage of this possible opportunity. I guess circumstances hadn't matched in a certain way. Perhaps you could explain that.

[David Marshall]

Mr. Chairman, at any one time we would have demands from clients that are not met. When an opportunity becomes available there's a question of which is the best suited for this to be satisfied. We try to match up, as close as possible, the client's needs and its particular priorities, how long its been waiting, or other stresses it's going under with a particular opportunity.

At the time we were working with these two departments, the Department of Defence appeared to be the better fit for this particular site. Since they turned it down, we turned to the RCMP and asked if this might also suit their needs and should we look at it on their behalf. They inspected the site and said this was very much something that would suit their needs, and we proceeded to work with them on options that way.

Tim, I think we've got right now about one million square metres of--

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

Before we get into those sorts of details, you were still negotiating, or speaking with the owner, about how perhaps the RCMP would be interested at that time? Or was it clear-cut that there was no interest in the property?

[David Marshall]

You mean when we declined to go ahead?

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

That's correct.

[Tim McGrath]

As we stated earlier, we can't speculate without having a guarantee from a client that somebody is going to move into the space. DND decided they couldn't make that guarantee to us, although they requested us to pursue that option. Later they came back and said, we can't guarantee it.

At the same time, the RCMP was looking at options for the renovation of their campus. We then spoke to the RCMP and the RCMP gave to us a commitment letter because they had funds they needed committed from their existing reference level as well.

With that we went back to talk to the owner of the building at the time, which was JDS. I'll tell you, JDS was gun shy in dealing with us because of the time it was taking. They were getting pressure from the Securities Exchange Commission in terms of the writedown of that property that had some tax implications and felt they couldn't negotiate with us.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

The deal comes apart and a new purchaser shows up, buys it at fire rate prices, and at that point you're not negotiating because they're providing you with unsolicited proposals.

[Tim McGrath]

We were not negotiating with JDS at the time, nor were we negotiating with the new owner at that time.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

So Minto is just producing these unsolicited proposals.

[Tim McGrath]

That's correct.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

We're also aware that the member for Nepean--Carleton, Mr. Poilievre, is lobbying very hard obviously in his caucus and with his minister. Did he ever speak with your department or anyone within your department about this opportunity?

[Tim McGrath]

He certainly never spoke at the bureaucratic level. I can't comment on whether he spoke at the ministerial level at that time. That I don't know.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

Do you have one more minute?

[The Chair, Liberal, Shawn Murphy]

There are 52 seconds.

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

I wonder if Borys could table those papers he's always referring to. It would be good for the rest of us to see.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

Which papers did I refer to?

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

You were quoting from some paper in your first round.

[Borys Wrzesnewskyj, Liberal, Etobicoke Centre, ON]

The Ottawa Citizen? Oh yes, not a problem.

[Brian Fitzpatrick, Conservative, Prince Albert, SK]

Oh, that's where you get your information--the Ottawa Citizen.

[The Chair, Liberal, Shawn Murphy]

A lot of people get their information from the press. That will be part of the public record.

I will go back to Ms. Ratansi.

[Yasmin Ratansi, Liberal, Don Valley East, ON]

You mentioned that you don't have the luxury the private sector has in terms of profit margins or your return on investments. Could you tell us what are the factors you put in for determining what a risk is? If you were in the insurance business, you would do something else. If you were a private sector property manager, you would do a risk analysis on a very different basis. Could you please table a document for us on how you do risk assessment, so we have an understanding and we can ask you logical, intelligent questions? We really don't understand sometimes how your risk assessment is done. I'd really appreciate it. Others may understand it; I may need it for my benefit.

Thank you.

[The Chair, Liberal, Shawn Murphy]

That would probably be better done in a written form.

We're going to move now to Mr. Williams.

Five minutes, Mr. Williams.

[John Williams, Conservative, Edmonton—St. Albert, AB]

Thank you, Mr. Chairman. I have a question to Mr. Libbey.

You were talking about the carry-overs when a capital purchase is not completed by the fiscal year-end of March 31. You said there is a carry-over allowable on the capital acquisition. Am I correct in saying that? Do you agree with that?

[Jim Libbey]

I think you need to talk to Blair James.

[John Williams, Conservative, Edmonton—St. Albert, AB]

Okay, Mr. James.

My point is that I presume there is an amount in the appropriations for an expenditure if the expenditure can't be completed prior to March 31. There's a policy that allows a carry-over the following year. My question is, do you have a subsequent appropriation for that amount or do you use the appropriation of the previous year, and how is it recorded in the financial statements?