Public Accounts Committee on Nov. 5th, 2018

[Rémi Massé, Liberal, Avignon—La Mitis—Matane—Matapédia, QC]

Thank you, Mr. Chair.

My question is for Ms. Lemay or Mr. Trudel.

Mr. Trudel mentioned earlier, in response to questions he was asked, that the GCSurplus website had received about 100,000 views and 29,000 transactions, if I remember correctly.

Mr. Trudel, could you tell us about the number of people who are registered with GCSurplus? I ask because I am also interested in this kind of system. Since I like cars, I look at the many vehicles that GCSurplus offers. A few years ago, I wanted to buy a beautiful Prius that had a battery problem. I thought it might be interesting. However, the price asked was particularly high compared to what I wanted to pay. In some cases, I think the government is getting a good return on its investments. I also remember that, to register, I had to provide my credit card number and that, despite my experience with this type of transaction, I found the process relatively complex.

Could you tell me about how many people are registered with GCSurplus in order to use the service?

[Nicholas Trudel]

It's close to 100,000 people. Actually, I believe the number is 94,000.

[Rémi Massé, Liberal, Avignon—La Mitis—Matane—Matapédia, QC]

Which category would you place these people in? Are they primarily companies that sell vehicles, or are they users, in general?

[Nicholas Trudel]

The vast majority of people visit the site for personal use because, like you, they want to buy goods. Still, a number of people do so with the intention of buying, reselling or using these goods for commercial purposes. About a quarter of users report having a commercial interest.

[Rémi Massé, Liberal, Avignon—La Mitis—Matane—Matapédia, QC]

Okay.

Earlier, some colleagues asked you questions about the challenge of generating enough funds through GCSurplus to carry out your duties. I don't remember any mention of supporting you any further. I'm thinking in particular of modernizing your systems to make them more up-to-date. As I mentioned earlier, the site would benefit from an update.

Could you tell us how the government could support you further?

[Nicholas Trudel]

At the start of the next fiscal year, we want to introduce some features that would allow us to post the sale and, I hope, improve our financial results. This would include improving the transparency of auction sales, so that people can see the price that is winning.

[Rémi Massé, Liberal, Avignon—La Mitis—Matane—Matapédia, QC]

Are the funds you have available during the fiscal year going to allow you to modernize the site, or do you have another strategy to get the necessary funds?

[Nicholas Trudel]

The program is fully funded by cost-based commissions. Our program is effective enough to allow us to make reinvestments, and we are very cautious about the funds we have.

Commissions are overseen by the Treasury Board. So you can't just write a cheque. However, we have some flexibility in the administration of the program. Thanks mainly to the efficiency of the latter, we will be able to reinvest in the modernization of the computer systems we need.

[Rémi Massé, Liberal, Avignon—La Mitis—Matane—Matapédia, QC]

Thank you.

Mr. Chair, if I may, I have another question for Ms. Lemay or Mr. Trudel.

My memory is failing me. Year in, year out, what is your budget for GC Surplus? What are the organization's revenues as compared to its expenses, roughly speaking?

[Nicholas Trudel]

For the fiscal year that just ended. GCSurplus sold roughly $60 million in products, and the program's operating costs were just under $12 million.

[Rémi Massé, Liberal, Avignon—La Mitis—Matane—Matapédia, QC]

Okay.

So the revenues generated from your sales covered your costs. You have no choice but to balance your budget, essentially, and to cover your costs. Is that correct?

[Nicholas Trudel]

Yes. The difference between sales and commissions, which is roughly $50 million, is either returned to the departments that owned the assets or, in very rare cases, paid directly to the receiver general.

[Rémi Massé, Liberal, Avignon—La Mitis—Matane—Matapédia, QC]

I have one last question on a completely unrelated topic.

Ms. Lemay, you said that you and the RCMP were looking at a kind of validation in principle of the ways donations are made. I see in your notes, however, that you also want to work with underrepresented groups and communities that might face social inequalities, for example. As I said at the outset, it would obviously be very worthwhile to help those groups or community organizations in remote regions such as ours. Can you briefly explain what you intend to do to provide greater support to those communities and organizations?

[Marie Lemay]

Yes, phases 1 and 2, which are the validation in principle and the first pilot project respectively, will help us determine that.

As you can well imagine, some thought and analysis are needed in order to be fair and transparent in offering those assets to organizations. That is why we can see, starting with very specific projects and very specific assets, whether there is really a way to launch and operate a long-term, transparent program.

That is what Mr. Trudel and his team are doing right now with the RCMP. There are also a few other programs, including the PSPC program. In fact, we also decided to launch a pilot project to dispose of our assets with the help of another part of our organization.

[The Chair, Conservative, Kevin Sorenson]

Thank you very much.

We'll now go to Mr. Christopherson.

[David Christopherson, NDP, Hamilton Centre, ON]

Thank you, Chair. I have only five minutes, so I'll try to keep it tight.

The first thing I want to do is underscore Mr. Chen's excellent question on the moratorium. The AG identified that it was the moratorium that seemed to be the key to CRA's success in this regard. He asked for some comments back. They weren't all straightforward, and I get that—a moratorium's not always the complete answer—but the AG is suggesting it made a big difference.

I'm just asking colleagues that I think we should ask all the entities here to provide a more comprehensive answer, in writing, to us about the issue of the moratorium, as well as Treasury Board, because, again, CRA is outside their plans. If we're going to make some changes based on what CRA did, the way for them to be most effective is to do it at the Treasury Board level, which then applies across the board to all the ministries.

It was an excellent question, Mr. Chen, and I'm really glad you brought that out.

Second, Chair, at the risk of getting close to the line and hearing you say that I'm out of order, I'm going to skate up against it. There's a current article out on the National Post website about the fact that there were 631 new cars bought for the G7 conference at a price of $23 million, and that most of them have very low kilometres—around 1,000 kilometres or less for some—and they're all put on sale at major discounts. It's an active file right now.

I don't have the time to hear the answer and then respond, but I would ask if the RCMP has anything to say about why we would go out and buy so many brand new cars, only to turn around and sell them all right afterwards. Was there no other way to do this? It's just a clear waste of millions of dollars.

To the AG, is there maybe something to look at going forward, Jerome? Motorcades are going to be needed in the future. I've been in them. We've all been in them when we travel. They're going to come up again. We belong to a lot of international organizations, to our credit and to our health—G7, G20, the Commonwealth, OSCE, and on and on. These are going to happen over and over. Surely to goodness we don't go out and buy hundreds of vehicles all over again every time we do this. We shouldn't have to start from square one.

Is there maybe something there that we can look at to avoid this situation? I understand more than most people that there are security issues, but still there's kind of a common sense issue here. As my friend Jack Layton used to say, this just doesn't pass the smell test.

Third, to the Auditor General, you didn't mention this, so I'm assuming it's not a problem. One of our witnesses did comment that you didn't find any backroom cahoots going on. I mean, when there's value to be had and money to be made, there's always the risk that people are making deals on the inside. You didn't mention it, so if you get a chance when you respond, you could just say no, that you had none of those concerns. I did hear some good answers, but I'd like to hear it from you that you were satisfied that there's no “silly bugger” stuff going on here.

Last, I believe there was a reference in the Auditor General's report, Madam Lemay, to GCSurplus and their inability to do long-term investments because of the way they're structured. If you get a chance, could you comment on that and give any suggestions for improvement you might have? That would be appreciated.

Thanks, Chair.

[The Chair, Conservative, Kevin Sorenson]

There were a number of questions there. We are working on a little draft statement here, and we're hoping that you will be able to provide us some thoughts on that moratorium, but we'll read that a little later on.

Where do we start?

Mr. Dompierre or Mr. Berthelette, I think there was a question on perception of...I don't know. “Corruption” is a tough word, but there was a perception of insider deals. Was there any evidence of those? That was Mr. Christopherson's question.

[Jerome Berthelette]

Mr. Chair, the audit team had no concerns.

[David Christopherson, NDP, Hamilton Centre, ON]

Very good. I'm glad to hear it.

[The Chair, Conservative, Kevin Sorenson]

Mr. Watters, go ahead, please.

[Dennis Watters]

Initially, when the G7 was coming about, we had to do some preplanning way ahead. At that time, for the G7 there was a lot of uncertainty about what dignitaries and what countries would be coming and how many would be part of the delegations that would be coming over to Canada.

We prepared a business case that compared the costs of leasing these vehicles versus buying them, and the business case concluded that it would be in the Crown's best interests to buy and then sell. We did do a business case for that.

Also, at the risk of repeating myself, at the onset it's very hard to say how many people are coming and how many vehicles you are going to need. I agree with you that it's a lot of vehicles, but the risk tolerance for those events, as you know, is pretty much zero. This is why. We worked with the security unit at the RCMP, and they were there to determine what the needs for the event were going to be. For sure we were not going to need all these cars once the event was finished. That's why, at the end of the event, instead of keeping the vehicles and doing nothing—we must be able to afford them as well—the decision was made to dispose of those vehicles.

[David Christopherson, NDP, Hamilton Centre, ON]

I don't have time to respond, or I would.

[The Chair, Conservative, Kevin Sorenson]

Go ahead, Mr. Christopherson.

[David Christopherson, NDP, Hamilton Centre, ON]

Thanks.

The problem with that is you didn't look at any other options. Thinking off the top of my head, are there not any major dealerships that would love to get credit for providing the cars, and they do just that?

I believe one of the motorcades I was in had Audis, and they were beautiful vehicles. I asked, “Where did you get all these Audis?” They had cut a deal with the Audi manufacturer and they took the credit for it. They gave them the vehicles, they were used, and then they got them back. For them, the loss of the dollars was worth it.

Is there not any other agency in government that could make use of a vehicle like that?

Again, I hear you did the business case of lease and purchase, but one of the things we're talking about here is reusing and reallocating to other parts of government. I didn't hear you suggest that was looked at in the business plan, sir. That's one of the issues we're focusing on here today. That needs to be done more. It would seem to me that vehicles would be an asset that could be utilized across the country, because Lord knows we must own enough vehicles in the Canadian government.

[Dennis Watters]

I agree with you in the sense that we need.... As part of our recommendation, we'll be looking at how we do our life cycle of assets. Like many other government departments, as the Auditor General highlighted, we don't spend enough time looking at the possibilities of transfers across government.