Thank you, Chair.
I'd like to thank the witnesses for appearing before us today.
All of this stems out of an Auditor General report of May 2006, in chapter 7, and it actually stems from one table, exhibit 7.2, which is used as an example of mishandling by the department. It says:
A client's request and a decision by Public Works and Government Services Canada not to enforce standards results in additional cost of $4.6 million.
I guess some of the discomfort that's been expressed at this committee has been around this number of $4.6 million stated by the Auditor General. She then goes on to give a breakdown. In that table she says:
Renewing the lease at Place Victoria cost $2.5 million more than the winning bid in the tendering process, and PWGSC paid $2.1 million in unproductive rent to that bidder while trying to locate tenants for the additional space.
The $4.6 million is broken down into two parts: $2.5 million and $2.1 million of unproductive rent, with $2.5 million being the additional cost of Place Victoria compared to Place Bonaventure.
You said you've gone through all the evidence. A year ago I tabled the summary of proposals, the tenders, and in it we find out—because it's not footnoted by the Auditor General—it appears that $2.5 million was based on a gross rental rate offered at $430.80. We know that the final rate arrived at was in fact $308. Additionally--and there are three points to this--for us to arrive at an accurate number, there are three aspects. If I'm incorrect with my calculations, outside of rounding errors, please stop me.
Place Bonaventure was at $236.81, but its basic unit operating rate was $99.57--almost $100--for a total of $336.38. On top of the $308 at Place Victoria, you have to add in $48.33 for the operating rent, so we end up at an actual cost of $356.33, compared to $336 at Place Bonaventure, so still about $20 per square metre higher, or $2 per square foot, approximately.
Then we find out that when the rate was renegotiated, the square footage was slightly smaller: it was 5,340 square metres, as opposed to 5,790 square metres at Place Bonaventure. When you extrapolate out, what you find is the rent at Place Victoria, after we go through those three steps, was in fact $291,062.20 less over a five-year period, and that means a savings of $1,455,311, as opposed to the loss of $2.5 million that was referred to based on a rental rate that wasn't the real rental rate, because the real rental rate was $308. That was what I assume the department's decision was based upon. You're actually looking at a savings of almost $1.5 million, but you still have the problem of the unproductive rent of $2.1 million. If you take out the savings, you're still facing a loss of $644,000.
You said you went through the testimony before this committee. A year ago Mr. André Gladu appeared before the committee, and when I asked him what the moving costs were, he said he remembered a figure of between $500,000 and $1 million. You said that you'd gone through the testimony. That's within the $644,000 cost that I've just gone through all the mechanics of arriving at. Do you have a more specific number?
