Public Accounts Committee on March 6th, 2008

[Alfonso Gagliano]

As I said, I had no knowledge, and the way I understand it, in reading the document, my executive assistant was asking questions and was waiting for answers, and in the meantime, until those questions were answered, the project was not proceeding. But I remind everybody that the tendering process at that time was not yet started. That's the difference.

[The Chair, Liberal, Shawn Murphy]

On a point of order, Mr. Williams.

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

I want to record that the memo said instructions were given. This was not information provided, as the witness would have us believe.

[The Chair, Liberal, Shawn Murphy]

I think the memo is part of the record of the committee.

That concludes our time. I'm going to allow Mr. Laforest 45 seconds.

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

Thank you, Mr. Chairman. This will be very brief.

Mr. Gagliano, you repeatedly told us that you were not there when these decisions were made. That seems clear to me. Another minister, Mr. Boudria, succeeded you. When you left and he arrived, did you get in touch with him either before or after your departure to inform him about various files, and especially this one?

[Alfonso Gagliano]

No, there was no contact between Mr. Boudria and myself.

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

There was no contact.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mr. Laforest.

Thank you, Mr. Gagliano. I want to thank you very much for appearing before the committee. We're now going to adjourn for two minutes and we're going to resume with Mr. Goodale.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Mr. Chair, would it be possible to ask one closing question?

[The Chair, Liberal, Shawn Murphy]

Mr. Poilievre, a brief question, and then we're going to adjourn.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

One of the things you said in the last series of responses was that all the rules were followed until “after I left”. Is it your position that all the rule-breaking in the public works minister's office occurred after you departed?

[Alfonso Gagliano]

I don't know if any rules were...but the problem you're debating is that the decision to stay at Place Victoria was taken after I left. While I was there the tendering process went ahead according to the rules. Everything was done according to the rules and the guidelines. What happened afterwards I cannot be held responsible for; I wasn't there.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mr. Poilievre.

On behalf of the committee, I want to thank you very much, Mr. Gagliano, for your appearance here today.

We're going to suspend for two minutes.

[The Chair, Liberal, Shawn Murphy]

I would like to call the meeting back to order. This is the second hour of the meeting scheduled for today. I will not go over the formalities again; we all know why we're here.

The second witness appearing before us today is the Honourable Ralph Goodale, former Minister of Public Works and Government Services. Welcome to the committee, Mr. Goodale, and thank you for taking time from your schedule to be with us here today.

Without any further comments, I'm going to go right to our list.

First of all, I'm going to ask Mr. Goodale if he has any opening remarks, and then I'll go to our list and we'll follow the same procedure we did at the last meeting. We're going to have six individuals, eight minutes each.

Mr. Goodale, do you have any opening comments you would like to address to the committee?

[Ralph Goodale, Liberal, Wascana, SK]

Yes, Mr. Chairman, just briefly.

Thank you, Mr. Chairman.

I have a few comments regarding the study now before this committee, namely the rental of offices in Montreal for Canada Economic Development.

The specific property under review is, of course, located at Place Victoria, which has housed CEDQ offices for more than 30 years. When I arrived as Minister of Public Works and Government Services on May 26, 2002, this leasing transaction was essentially complete, awaiting only final ministerial authorization.

I no longer, of course, have access to the department's records, but the material presented to this committee would indicate that a process began in December 2000 to address CEDQ's accommodation requirements.

That process resulted in a recommendation to me, two ministers later, dated May 31, 2002, just five days after my appointment as Minister of Public Works. I accepted the department's recommendation exactly as it was presented to me.

The description of what went into that recommendation is best captured by the two former deputy ministers who appeared before your committee, Mr. Marshall and Mrs. Cochrane. As their comments show, the department was satisfied that the lease for CEDQ at Place Victoria provided good economic value to the crown because of four factors.

First, the amount of space required by CEDQ had been reduced from their original request. Second, apart from improvements with respect to access for disabled persons, physical fit-up costs and IT costs would be avoided. Third, there would be no moving expenses involved. Finally, and most importantly, the actual rent that had been negotiated was nearly 30% cheaper. It was $308 instead of $430.

For whatever reason, it is regrettable that this final cost information was not provided to the Auditor General in a timely manner to be taken into account in her examination.

The other factor that went into the department's recommendation to proceed at Place Victoria was their professional assessment that the new space leased at Place Bonaventure before CEDQ changed its specifications was useful space that could be and would be used economically to meet other federal requirements in Montreal.

The former deputy ministers have both indicated that the expectations about Place Bonaventure were not fulfilled as quickly as originally anticipated, but they were reasonable in the view of both those deputies at the time they were made in the summer of 2002.

Overall, the Department of Public Works and Government Services actually does better than the private sector in managing and minimizing excess space. I think the statistics on that have been put before the committee.

Nevertheless, the Auditor General has recommended, first, better coordination among departments when decision-making is a collective exercise; second, better information systems for financial analysis; third, a tougher enforcement approach on the part of Public Works; and finally, updated data for the Auditor General. I think all of that is very good advice.

Thank you.

[The Chair, Liberal, Shawn Murphy]

Thank you very much, Mr. Goodale.

We're going to go to the round, as I said, of six individual examiners, each with eight minutes.

Mr. Hubbard, you have up to eight minutes.

[Charles Hubbard, Liberal, Miramichi, NB]

Thank you, Mr. Chair.

Good morning, Mr. Goodale.

When you received the letter from Madam Cochrane--you were only five days in office--did you ask any questions about it?

[Ralph Goodale, Liberal, Wascana, SK]

We would have had a conversation, I'm sure, Mr. Hubbard. Now that is five or six years ago, and I honestly would not be able to recite for you the details of the conversation.

Typically, in my experience in Public Works, I asked, on files like this, two types of questions. First, have the rules been properly respected in terms of how the transaction is being handled? And second, is there good value for money? Those were two questions that were typically always asked by me in dealing with Public Works files.

[Charles Hubbard, Liberal, Miramichi, NB]

In the information we received this week, the name Gary Polachek came up. He was a witness on Tuesday. Do you know this gentleman?

[Ralph Goodale, Liberal, Wascana, SK]

No. I saw the testimony. Someone from the committee was good enough to send it over to me. But I don't know that gentleman. No, I don't.

[Charles Hubbard, Liberal, Miramichi, NB]

You had no conversations with him as the representative of the landlord at—

[Ralph Goodale, Liberal, Wascana, SK]

No.

[Charles Hubbard, Liberal, Miramichi, NB]

Now, in the role of minister, apparently you get 500, 600, or 700 of these types of recommendations to sign off on each year.

We heard the word “hold” come up here in terms of being minister or someone in the minister's office. This was a tender that had been called, and then there was a second building they wanted to maintain occupancy of. In your mind at the time, was there any thought that this seemed to be irregular? Was somebody using undue influence within your staff or department?

[Ralph Goodale, Liberal, Wascana, SK]

No, sir. I think both the staff in my office and I handled this matter appropriately. The department made a recommendation. They indicated that the analysis had been done, the rules had been followed. They made a recommendation and I followed that recommendation.

[Charles Hubbard, Liberal, Miramichi, NB]

We also hear the name of Lino Saputo, a very important part of the economy in fact of that region and also involved in Canada big time. Did he make any representation to you as a possible owner of Place Victoria?