Public Accounts Committee on May 2nd, 2019

[Genevieve Charrois]

It's an honorific designation, so there's no way to intervene with the exception that, if they come for funding to the cost-sharing program we are running and ask for money, then we will make sure that the intervention is according to the standards.

[Randeep Sarai, Liberal, Surrey Centre, BC]

To Ms. Thomas, you said that the Department of Defence, obviously, has priorities. What I want to know, and my colleagues have said earlier.... To see it in reports over decades, the same problems over and over, is obviously a big challenge for us.

Does each ministry and its department identify the budget required to restore, maintain and preserve heritage sites and identify that as a line item in their budgets? If so, then we can know if the governments didn't fund those requirements. If it's never identified, then it's hard for a minister or a government to know that it is there. The only way I see that a government would know and be able to act on that is if there were line items every year to say what we have preserved and what we need, and this is the shortfall. Has that been done in the last decade or so?

[Jody Thomas]

That is not, in fact, how we manage the infrastructure portfolio. We're certainly aware of which buildings are heritage sites, but we have a prioritization of where we need to invest, for operational reasons. If the building is a heritage site, then we take specific steps to maintain the heritage nature, and we work with our colleagues to ensure that we're not causing any damage. If we're going to divest something, we ensure that we can legally divest it if it is a heritage site, but we don't prioritize by preservation priority.

There are many buildings that we do invest in. Armouries come to mind. Armouries are the core of so many communities. They have heritage value going back to World War I and World War II. We preserve those qualities.

[Randeep Sarai, Liberal, Surrey Centre, BC]

Sorry, I'm not talking about prioritization. I'm talking about actually maintaining, like a strata corp for an apartment building or a commercial building that would say that a budget of x is needed to maintain this building or a reserve is needed to have the roof....

Whether it gets put in or not is a secondary question. It's whether we have actual budgets or means of calculating, so at all times somebody can have a look and say that we need this, and it hasn't been prioritized because, perhaps, other issues are more important. At least somebody can have a look at it and say that we're behind on it this year or we have the ability to go at that, rather than going back and trying to find it on a list and figure out if we even own the properties or not, if they're designated or not, if it's the right picture or if it's been sold or not.

We should have a categorization and an amortization of the costs that are expected in every one, so that any minister or deputy minister could see that we're lagging on this and maybe it's time to prioritize it.

[Jody Thomas]

I'll ask my ADM to answer that question. I would tell you that we have a rough order-of-magnitude idea of what investment is required at any given time that is specific and project-by-project, not as detailed costing.

[Rob Chambers, Acting Assistant Deputy Minister, Infrastructure and Environment, Department of National Defence]

I would just quickly add that we're in the fortunate situation that because we have a clear picture of the inventory and because we'll have condition assessments of each one of our heritage buildings by March 2020—as we committed to do in response to the audit—we'll be able to say by this time next year what each one requires in the way of repairs and maintenance going forward.

[Randeep Sarai, Liberal, Surrey Centre, BC]

Would you be able to also have an assessment of what type of budget is required for that building going forward—i.e., if it needs $2,000 a month for X, Y and Z, but its roof will need repairing in 15 years, so we should commit to a reserve of 1% of the building value every year towards that—so governments can budget and allocate, not one-time costs like Centre Block—$700 million to $1 billion—but rather have it amortized over years if we know that about every single project and have reserves built up.

[Rob Chambers]

All of our heritage assets are operational assets. Each year, we are getting closer and closer to having exactly what you just described for all of our operational buildings. It's not specific to heritage, but because heritage is a part of that broader portfolio, yes, we'll have that information.

[The Vice-Chair (Mrs. Alexandra Mendès), Liberal, Alexandra Mendes]

Thank you very much.

Now we go to Mr. Christopherson.

[David Christopherson, NDP, Hamilton Centre, ON]

Thank you, Chair. I have to tell you this. You have a majority government, so why don't you pass a law that forbids flooding? That wouldn't impact the roads. Get with it.

[Voices]

Oh, oh!

[David Christopherson, NDP, Hamilton Centre, ON]

My apologies. The roads are really bad, but that's the least of some people's problems. I'm glad I got here, and I do appreciate your consideration.

This is a really bad audit. I have to tell you that when I looked at what the week was going to be and I saw CMHC the other day, I thought, okay, that's going to be the rough one, and then we'll get Heritage, and everything will be all nice and we'll talk history and it will all be very good. In fact, it was quite the opposite. I was rather impressed with their audit the other day, and this is just an abysmal report.

There's very little in here for anybody in management to be proud of—very little. The one little nugget I can throw out goes to National Defence, believe it or not, because in one area of data collection where we've been pounding on them—and they do have that message and that was reflected here—they did that right. One thing—one—was okay.

Colleagues know that nothing incenses me more than previous audits finding the same problem and making the same recommendations, with the government making the same promises, while audit after audit it's not done. It's infuriating. That's where we are with this one.

There were audits in 2003 and 2007. Paragraph 2.7 in our 2007 audit says, “...we concluded that Parks Canada's conservation efforts since 2003”, which was the earlier audit, “were not enough to ensure federal organizations conserved heritage properties.”

Let's just jump ahead to see what the final mark was, if you will. The conclusion is on page 17, at paragraphs 2.76 and 2.77. This is the conclusion from the auditor:

We concluded that Parks Canada, Fisheries and Oceans Canada, and National Defence did not work sufficiently to conserve the heritage value and extend the physical life of federal heritage properties. They did not have a full picture of their heritage properties; for example, information on the condition of their heritage properties was not current.

The life of some federal properties was at risk—properties that are for the enjoyment of present and future generations of Canadians.

Here's my first question, before we even get into the details. There were promises made, not by you individually but by the organizations and departments you represent. There were promises made in 2003 and not kept and promises made in 2007 and not kept. What on earth would have us believe that the promises you're making today you're actually going to honour?

I want to hear from you.

[The Vice-Chair (Mrs. Alexandra Mendès), Liberal, Alexandra Mendes]

From whom?

[David Christopherson, NDP, Hamilton Centre, ON]

I don't care. Somebody start talking.

[Michael Nadler]

Why don't I start? My colleagues can chime in.

Let me start with the past audits and also a series of analyses done by Parks Canada using third party help to review our whole asset portfolio. You're absolutely right and the Auditor General was absolutely right: we had insufficient resources in our capital budget to maintain the whole suite of assets that Parks Canada is responsible for.

Those audits, plus our own analyses, led to a budget proposal by a former minister and a series of successive investments that is allowing us to restore assets that had been degrading over time. The challenge for us now will be to work with Finance Canada for the long term to ensure that our capital budget is sufficient to meet the demands of the maintenance of our places and our buildings.

There's a whole series of unanticipated challenges emerging now, and your comments were prefaced by one of them. Climate change and severe weather events are a menace to our national historic sites, and we'll have to contemplate the impact of those things well into the future in our work with Finance Canada.

[David Christopherson, NDP, Hamilton Centre, ON]

That's it? It's all because you didn't have enough money? I understand that's a biggie, and I would accept that maybe that's the main driver, but are you going to tell me that's the only reason things are in this abysmal condition? For that, I'm supposed to have comfort as a member of the public accounts committee that you're going to honour your commitments this time? It's all funding?

[Michael Nadler]

Parks Canada has an A-base capital budget of $160 million a year. We have 17,000 assets valued at $24 billion. The capital budget was insufficient to maintain that scale of assets. That's being rectified now through a restoration program and, in the long term, we're working with Finance Canada on appropriate long-term investments.

[David Christopherson, NDP, Hamilton Centre, ON]

I'll be coming back to you. I gave you a chance; I'll be coming back. I want to hear from the other department heads.

[Jody Thomas]

We were not part of the 2003 audit. We were, in 2007, and what was recommended for National Defence is that we have a strategy to ensure that conservation objectives are met in National Defence buildings. The study for the strategy was completed and the strategy delivered. The reality in Defence is that we have to prioritize operational requirements. We follow the indications and the recommendations of the strategy when working on a heritage building, but we don't prioritize conservation over operations.

[Kevin Stringer]

Like National Defence, we were not in the audit in 2003—or in 2007, in our case.

There really are three things. We're identified in this audit in one, which is the tracking, and I spoke to what we're doing with respect to tracking. We have basically addressed that issue.

Then there are the condition reports, and we've said we'll have those done by 2021.

Then there's actually maintaining the buildings, which I think is going to be the challenge going forward. That really is, I think, a budget issue. As well, as the deputy of National Defence said, we along with the feds will prioritize our spending on assets that are actually being used and that are required for our core mandate.

When we are dealing with heritage buildings, we know about the requirements for heritage buildings and will be guided by the guidance that Parks Canada provides in that regard.

The funding really is an issue. I mentioned this before, but I'll give you some numbers. In our case, in budget 2017 our O & M budget for our real property for 6,600 sites or assets went from $48 million to $110 million. It was a significant increase, and we are able to do some of the things that this audit is asking to do, as well as better maintain all the buildings. On capital, we went from $44 million a year to $88 million a year. That's ongoing, and it has made a genuine difference in terms of being able to address these issues and other issues around heritage buildings.

[The Vice-Chair (Mrs. Alexandra Mendès), Liberal, Alexandra Mendes]

Thank you.

Now we have Mr. Davidson.

[Scot Davidson, Conservative, York—Simcoe, ON]

Thank you.

Good morning. How are you?

It is a very troubling report. I would echo both my colleagues' comments regarding this. I don't have to go over it again, but this report makes it clear that Parks Canada has really failed in its stewardship of our historic properties.

Is there any merit to having Heritage Canada take some more responsibility for properties that you guys have? It seems to me that everyone is giving the big numbers, and it's almost as though people can't handle what they have and are possibly just not saying so.

[Michael Nadler]

Just as a question of clarification., when you say “Heritage Canada”, do you mean the Department of Canadian Heritage?

[Scot Davidson, Conservative, York—Simcoe, ON]

Yes.

[Michael Nadler]

Parks Canada at one time was part of that portfolio. They were shifted to the Environment portfolio.