Evidence of meeting #96 for Public Accounts in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was assets.
A recording is available from Parliament.
Chief Executive Officer, National Capital Commission
I'll answer that.
We have done a deep dive portfolio analysis of all the official residences of Canada, which are in a fair condition when you look at all of them. However, 24 Sussex Drive rates as being in poor condition. We are conducting the studies and working with government to address that, but looking at it from across the whole portfolio.
There is no risk to people working in 24 Sussex. It's a safe environment to work in. However, the asset is in poor condition.
Conservative
Gérard Deltell Conservative Louis-Saint-Laurent, QC
Okay, it's not working. We're talking about living conditions—this is a house—
Conservative
Gérard Deltell Conservative Louis-Saint-Laurent, QC
—especially for a young family. We know that today we have a young family there, and we know that in 24 months from now, we'll have a younger family there.
Just a little hint of what's to come, friends.
My question is very serious.
Is this the best way to revive it, or is it better to strap down and start with a fresh, new house?
Chief Executive Officer, National Capital Commission
We're working with the government on this project, and the discussions continue.
I can tell you that the public response I'm receiving on this is a steady, positive response that supports action to work on the residence.
We're focusing on areas such as security and the livability of the house. The house does not divide private and public quarters, as the residence of a G7 leader would normally. The house is not universally accessible. It has low environmental performance, and it's a heritage property. These are all aspects that are being studied, as well as how best to have the public experience it. These are part of our discussions with government going forward.
Conservative
Chief Executive Officer, National Capital Commission
A substantial amount of work has been done on this.
Conservative
Gérard Deltell Conservative Louis-Saint-Laurent, QC
That's not my question. When will you finish the studies?
Chief Executive Officer, National Capital Commission
The studies will continue in detail leading into a renewal of the residence, because there'll be more to do. This is a highly studied property.
I can't give you an exact date. We don't have an exact date.
Conservative
Gérard Deltell Conservative Louis-Saint-Laurent, QC
Very well.
There are two options: keep the residence and bring it up to par—or restore it—or build something brand new.
In your studies, do you look at both of those options?
Chief Executive Officer, National Capital Commission
I can't talk specifics in terms of the options, but I can say that there are five buildings on the grounds. It's a four-acre property located between a cliff and a parkway, so making the residence safe, usable, and accessible is a challenge. It is possible, though. The project can be approached in a number of ways, and we are continuing to work with the government to assess the options.
Conservative
Gérard Deltell Conservative Louis-Saint-Laurent, QC
As you do that, do you attach a cost to each option?
Chief Executive Officer, National Capital Commission
In some of our studies, we looked at the cost element.
As I said, though, the problem has more to do with design. It's too early to say what the exact cost will be.
Conservative
Gérard Deltell Conservative Louis-Saint-Laurent, QC
Mr. Kristmanson and Mr. Seaman, I must say I'm surprised. This isn't a new problem.
The current government has been in office two and a half years now. It has nothing to do with the government, but the Prime Minister has not been able to live in the residence for two and a half years. You've had two and a half years to conduct every study imaginable and unimaginable.
You have been free to do whatever you needed to for two and a half years, and yet, you still can't say when the studies will be complete. I find that shocking.
Chief Executive Officer, National Capital Commission
The NCC is an arm's-length federal crown corporation with responsibility for the official residences of Canada. As the stewards of the property, we continue to do our work. The long-term strategic direction for the official residence is, obviously, a matter of state. We work with the government on this, and we will take the government's advice and lead. Once we put into motion the renewal of the residence or the next phase of the project, we'll be in a position to talk in detail about it, assume the responsibility for it, and advance it.
At the moment, it's still under study.
Conservative
Gérard Deltell Conservative Louis-Saint-Laurent, QC
After two and a half years of study, you do not know exactly what to do, and you don't know when you will finish your study?
Chief Executive Officer, National Capital Commission
I really can't comment further on this except to say that the NCC team that's worked on this is extremely professional and the understanding of the residence is thorough. When we go into operation, we will create a distinguished home for our Prime Minister and his or her family.
Conservative
The Chair Conservative Kevin Sorenson
Thank you very much, Mr. Deltell. We'll come back to you later.
We'll now move to Mr. MacGregor, please.
Welcome to our committee.
Alistair MacGregor NDP Cowichan—Malahat—Langford, BC
Thank you very much, Mr. Chair.
Mr. Kristmanson and Mr. Seaman, I'll start my questions with you.
In the Auditor General's report, there is a passage in paragraph 18 that reads:
However, in its annual five-year corporate plans, the Board and management did not clearly describe this significant risk or the mitigation strategy and its related financial impact. The corporate plan is a key vehicle for the Corporation to inform the government every year of its activities, strategic issues, and key risks.
Why, when you are responsible for reporting to the minister, was that information not included in that corporate report?
Chief Executive Officer, National Capital Commission
Following the Auditor General's report of 2007, the commission entered into an enterprise risk-management development process that I think was very constructive and lead to improvements. What it didn't do well enough and what is noted in the current report was integrating all of the elements of risk assessment and management, and integrating them vertically from the bottom to the top of the organization. Without presuming to interpret too much from the Auditor General's report, I think it is safe to say that it found there to be strong risk management processes around the different assets, but the integration of those was needed.
We have worked on that. For the past three years, we've been taking these disparate processes over this broad asset base and bringing them into an integrated process. That has been filtering its way up and is now in our corporate plan. These things don't happen instantly.
I would just comment that we participated in government-wide measures to control expenses and so forth, and there was an attitude of looking at ways of reducing costs through most of the ten-year....
NDP
Alistair MacGregor NDP Cowichan—Malahat—Langford, BC
Going forward, you can assure this committee that the minister will now have the appropriate risk information in future reports?
Chief Executive Officer, National Capital Commission
Yes. I think it's a very fair comment from the Auditor General, and we agree with it.
NDP
Alistair MacGregor NDP Cowichan—Malahat—Langford, BC
Thank you.
I want to go on to the analysis of the state of deterioration of your assets, that just above a quarter of your assets are in fair, serious, or poor condition. Has your agency done an analysis of how much the costs increase every year we wait to fix these properties?
Chief Executive Officer, National Capital Commission
We can do that estimate through the facilities' conditions indices on an overall basis. We would like to do it on an asset-to-asset inspection basis, which will be a much more accurate one. There are now groups of assets for which we can tell you in great detail how much an investment now will save later on with that particular asset or group of assets.
Our analysis has not yet been sufficiently developed over the whole portfolio to be able to roll that up into one number. Normally, 2% of the assets should be reserved for recapitalization, and 2% for life-cycle management. We know that in our asset base, we're not even close to that, so one-time funding will help.
We will also have to be talking with the government about a longer-term strategy so that the reinvestments occur and we don't have to deal with excessive expenses later from deferred maintenance again. Generally, investing in life-cycle management saves you in the long term.
NDP
Alistair MacGregor NDP Cowichan—Malahat—Langford, BC
Were you asked to reduce your costs and budget by the government during the 10-year period from 2007?