Evidence of meeting #19 for Public Accounts in the 39th Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was bonaventure.
A recording is available from Parliament.
11:30 a.m.
As an Individual
Yes, I do. Carol Beal would have been present at meetings with Jean-Marc Bard, as well as the associate deputy minister of the day, to provide information about ongoing transactions.
11:30 a.m.
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
How many other files of this kind, roughly, did Minister Gagliano's office interfere in?
11:30 a.m.
As an Individual
I don't recall any files in which he or his office interfered. We did roughly 500 leases a year at that time, not to mention hundreds of other procurement types of transactions that weren't necessarily based on real estate, and the minister's office wanted information about them, but that doesn't amount to interference, in my view.
11:30 a.m.
Liberal
March 4th, 2008 / 11:30 a.m.
NDP
David Christopherson NDP Hamilton Centre, ON
Thank you very much, Chair.
Thank you both for attending today.
I just want to get refocused here. Our big problem is that we have not yet determined who made the pivotal decision and why, after all the work. An enormous amount of work was done, then two weeks after the deal was signed, the government changed its mind. We don't yet have a rationale for that, nor can we yet find out who takes responsibility for saying “I made the pivotal decision. I said this stops, this starts.”
So we're seeking your assistance in doing that. I want to again remind all of us what the Auditor General said directly. Two weeks after the tendering process had closed and the winning bidder had been selected, the secretary of state for the agency sent a letter to the Minister of Public Works asking him to renew the lease at Place Victoria. The Minister of Public Works approved the renewed lease at Place Victoria, despite the fact that Public Works guidelines require an economic advantage to the crown to exist in order to justify a direct non-competitive negotiation of a lease. Despite the absence of any economic advantage to the crown, Public Works entered into direct negotiations to renew the lease with the landlord at Place Victoria. The agency's request not to move combined with the lack of adherence to established guidelines has cost the taxpayers an additional $4.6 million.
So my question is this, Ms. Cochrane. How much do you know about why this decision was taken, and can you give us some rationale as to why they would proceed without the adherence to the established guidelines, as the Auditor General has referenced?
11:35 a.m.
As an Individual
My understanding is that the department disputes the Auditor General's figure of the amount of money that was lost as a result of this transaction and the department stands behind the $2.1 million figure of unproductive rent as a result of not backfilling the space quickly enough.
Having said that, what happened after the lease was signed was the letter arrived in the department from the minister responsible for the Economic Development Agency, not directing the department to do anything, but asking that options be reviewed. As a result of any request by a minister of that nature, we would review options and indeed did review options at this time.
The result of the analysis that was completed was that in fact there was an economic advantage to the crown in leaving the Economic Development Agency in that space, provided that the newly negotiated lease rate could be secured and the department was willing to forgo other fit-up costs that they had initially requested. So it was based upon that analysis that the department was of the view that the minister could be advised that the wishes of the client could be accommodated.
11:35 a.m.
NDP
David Christopherson NDP Hamilton Centre, ON
All right.
I want to back up one step. The correspondence we have under tab 23 from the Secretary of State just says:
The offices of the Economic Development Agency of Canada are currently located at 800 Place Victoria in Montreal and occupy.... The lease will expire on March 31, 2003. I think you would agree it's essential to find a building offering adequate space in a prestigious address.... In my opinion, Place Victoria fully meets these criteria. You can rest assured.... Consequently, I would ask you to sign a new lease with Place Victoria, if possible.
That's dated April 15, 2002. Is that the first indication that you knew there was a change, or are there steps previous to this that I'm not seeing?
11:35 a.m.
As an Individual
It would appear as though there was a heads-up. It may have been a verbal heads-up from the minister's staff to senior officials in the department, notably Carol Beal, who have indicated, I believe, that earlier than the date on which this letter was sent and received, information was received by officials that some further analysis might be necessary.
The letter that was received from Monsieur Drouin from April 15 did not ask the minister to sign a new lease. He said if it is possible, please sign the new lease. That was what triggered--
11:35 a.m.
NDP
David Christopherson NDP Hamilton Centre, ON
No, I'm sorry. Please. “Consequently, I would ask you to sign a new lease with Place Victoria, if possible”. That's pretty clear.
11:35 a.m.
As an Individual
The letter I have says
“Consequently, I would ask you to sign a new lease [...], if possible.”
Is that the same letter?
11:35 a.m.
NDP
David Christopherson NDP Hamilton Centre, ON
Well, I don't speak French, so I don't.... All I know is what I just read from the letter of April 15 in our binder. I can only go by what's placed in front of me.
11:35 a.m.
Liberal
The Chair Liberal Shawn Murphy
Are you dealing with an English translation of what's she's got? Perhaps the clerk can speak to that.
11:35 a.m.
NDP
11:35 a.m.
As an Individual
They're the same: si cela est possible and “if possible”.
11:35 a.m.
NDP
David Christopherson NDP Hamilton Centre, ON
Okay, but the direction is do it if you can, not look at everything and then we'll see if this happens to be one. There's a pretty clear direction there. The “if possible” sounds more polite than anything, but fair enough, if there's a block, just say no, but other than that, they're saying directly, go with the lease and this would follow....
This is what drives us crazy. On March 28, 2002, a letter was sent to the people at Place Bonaventure telling them we've got a deal. On April 15 we have a letter from a minister saying we don't have a deal. What we're trying to do is find out why. What happened in this discussion, this heads-up thing? You can appreciate how frustrated we are. Who made this decision and why? We're still not hearing that.
Why was the deal that was signed when Place Victoria came in fourth...? The whole process was done, and weeks later there's just this edict that comes down. The heads-up phone calls are all nice and fine, but the official paperwork says an edict came down weeks later, after the darn thing.... The ink was hardly dry and a minister shoots off a letter on April 15 saying go back to Place Victoria. Why?
11:35 a.m.
As an Individual
Well, I don't know exactly what prompted the minister to write the letter, but I have looked at Mr. Gladu's testimony, and it appears as though he was new in his portfolio. He was briefed by the deputy minister to the effect that many of the staff were not happy, notwithstanding the fact that he, the deputy minister, had already indicated his willingness to move to Place Bonaventure; and that prompted the minister to decide to determine, with his colleague, Minister Boudria, whether other alternatives might exist.
11:40 a.m.
NDP
David Christopherson NDP Hamilton Centre, ON
Well, former deputy, I appreciate your loyalty and your professionalism, and I don't question anything at all that you're saying, but it's hard to swallow. You're stating what you know to be the facts and interpreting what you can. I'm still having a great deal of difficulty with this.
I can't imagine that one would go through this whole process and you would never know that the staff there aren't happy and that wouldn't be taken into account; that we went through all of this and the reality is that somebody new came in and found out that the employees weren't happy and they scuttled the whole thing. It doesn't make sense.
11:40 a.m.
NDP
David Christopherson NDP Hamilton Centre, ON
It doesn't pass the smell test. That's why we're not letting go of this.
I'll just say, whether we're talking $4.6 million or $2.1 million, we still don't have an answer as to why it was wasted, and that's what we're seeking here.
Mr. Polachek—
11:40 a.m.
Conservative
Pierre Poilievre Conservative Nepean—Carleton, ON
On a point of order, I know our transcripts don't take gestures into account, but I think it's very important for the purposes of clarity and historical record-keeping that when David Christopherson said “This does not pass the smell test”, describing the whole process, Ms. Cochrane nodded her head in agreement.
Are you stating that you agree with that?
11:40 a.m.
As an Individual
I was nodding that I was listening to the honourable member, not that I agreed with the comment.
11:40 a.m.
NDP
David Christopherson NDP Hamilton Centre, ON
Thank you, Chair.
How did it come to your attention that the decision had been changed?