Thank you very much, Mr. Chair.
Members of the committee, bonjour.
Thank you, Mr. Seaman, for your opening remarks, and to the Auditor General.
I thank the committee for this opportunity to discuss the Office of the Auditor General's special examination of the National Capital Commission.
I'd like to recognize the work of the Auditor General, Mr. Ferguson, as well as of Margaret Haire, Sophie Boudreau, and Étienne Matte, with whom we worked closely for several years in the lead-up to the report.
To begin my presentation today, I'll set out the five core priorities that the NCC's board of directors has established for the current planning period.
The first priority speaks directly to the Auditor General's report, and this is to address the condition of the NCC's infrastructure and assets, including the official residences of Canada. I'll return to that in a minute.
Our second objective is to foster the redevelopment of the LeBreton Flats.
Our third priority is to offer better public access and new connections for Canadians to discover the shorelines and waterways in the capital region.
Our fourth priority is to modernize the NCC's planning framework.
Finally, our fifth priority is to be a value-added partner here in the region, creating legacies that serve as sources of pride for all Canadians.
Running through all of these priorities is a meaningful commitment to corporate excellence as a federal crown corporation.
Returning to the first priority, which is addressing the condition of the NCC's infrastructure and assets, the NCC agrees with the conclusions of the Auditor General's special examination. The commission has been strengthening its asset management regime on an ongoing basis.
About three years ago I focused our efforts on cataloguing and understanding the nature and extent of deferred maintenance across the large and diverse portfolio that Mr. Seaman described in his remarks. In 2016 and 2017, the commission undertook significant efforts to gather information related to all the different aspects of life-cycle processes, inspection activities, capital investments, building condition reports, and so forth, in order to amalgamate them into an integrated framework.
I am very pleased to report that the NCC completed this review prior to the deadline set in our action plan of March 31, 2018. We now have a 10-year recapitalization plan to restore and maintain these assets to an appropriate condition. With the additional $55 million accorded by the government in budget 2018, we can now initiate this plan and address the highest priority demands. We feel this is a judicious investment at this time. It is proportional to our internal capacity to deliver on capital projects while allowing us to address the most immediate risks associated with the assets.
Looking ahead, we're working with government to define additional tranches of funding to deal with subsequent phases of these asset repairs until we can say that the entire portfolio is restored to good condition.
The second area of concern raised in the Auditor General's report is the NCC's risk management framework. Again, the commission agrees with the Auditor General's findings and welcomes the report's recommendations.
To that end, as recommended by the Auditor General, the NCC's senior management has approved a comprehensive enterprise risk management framework that sets risk tolerances, allows for the assessment of strategic and operational risks through a consistent and integrated process, and supports the provision of comprehensive risk information as part of the decision-making process, including regular reports to the board of directors.
This framework is based on an in-depth strategic risk evaluation conducted during the 2016-17 fiscal year. Further to this risk management strategy, the NCC developed an inventory of operational and corporate risks, which is updated regularly.
Risks are now incorporated into our quarterly reporting process and, of course, the board's decision-making.
We've also provided staff training to ensure the successful implementation of the updated framework throughout the organization, and we believe that the Auditor General will find, in his reviews going forward, consistency and discipline in this area.
In closing, I'll draw your attention to other findings taken from the rest of the report that I believe the committee will find encouraging. For example, the implementation of the NCC's new business systems, replacing the systems from the 1990s, was completed on budget and on scope, and through an intensive staff training process has now been fully integrated into our operations.
I would also mention that in the NCC's leasing portfolio, particularly in the residential and agricultural properties, the NCC has lowered its vacancy rates from 13% in 2012 to 3% in 2018.
We've seen substantial increases in awareness and appreciation of our public consultation process, which has been transformed in recent years.
I could mention other positive results reflected in the report, but we welcome the two recommendations, and I'll be very pleased to address these and any questions and comments the committee may have.
Finally, I express appreciation both for the NCC's internal audit function and the oversight of the Auditor General and his staff. These quarterly, annual, and 10-year exams give the NCC a deeper perspective on how it can raise its level of excellence as a federal crown corporation.
As such, Mr. Chair, I welcome this report.