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.
Conservative
Bradley Trost Conservative Saskatoon—University, SK
Is there anything from the Auditor General's Office, before I go to my next question?
Auditor General of Canada, Office of the Auditor General
I think they've given you a specific example. Getting back to your original question, in the case of many of these assets, of course you're dealing with assets that people interact with. It's therefore important to understand the risks and what could go wrong, because when something goes wrong, there could be people and health and safety issues involved. Being proactive on potential risks and what could go wrong is something that every organization needs to do. It's very important to have that integrated approach. The other thing we identified is the need to make sure that decision-makers along the way are alerted, because at some of these stages there are critical decisions that need to be made about either to repair an asset, or to keep an asset, or to ask whether it is an asset that we can no longer afford to maintain. Understanding the risks, I think, is a very important aspect for this organization.
Conservative
Liberal
Shaun Chen Liberal Scarborough North, ON
Thank you, Mr. Chair.
I just want to start by acknowledging what Mr. Kristmanson said earlier, which is that these properties, whether they are Rideau Hall or 7 Rideau Gate, are a great source of pride for Canadians. Therefore, it's so important that we see them well-maintained, and for those that are public buildings, parks, and other assets that can be enjoyed and used by the general public, we see them as being accessible.
I want to continue some of the questioning by my colleagues today. We know that when it comes to assets, the longer you wait to repair them, the more expensive it can get. There's a snowball effect, just like with your own house. If you have a roof that is 15 or 20 years old, you want to replace it before there's a leak and it causes further damage.
The Auditor General's report noted that some of those properties among the 27% of assets that are in poor, fair, or critical condition do generate revenue. In effect, then, when we are not proactive in maintaining these properties, not only are we losing revenue, but we are inevitably spending more money to do the repairs that are ultimately required.
I have a couple of questions related to this. Are any properties in such a bad state of disrepair that they are now prohibitively costly to repair?
Chief Executive Officer, National Capital Commission
I will quickly answer your question by just saying that in our capital budget process, we spend the $22.7 million that we get with an eyedropper. The heaviest weighting is for safety and security. As the Auditor General said, the safety of the public is the primary thing, so the money goes first to those areas, and then it trickles down to the other areas.
Liberal
Shaun Chen Liberal Scarborough North, ON
How much of that money is being spent proactively to avoid assets getting into the category where they are no longer safe or pose a health hazard?
Chief Executive Officer, National Capital Commission
There are a certain number of assets that are foreseen to be demolished and the land naturalized—not many, but there are some. Some are in that category.
Of the assets that are not heritage treasures but are revenue-producing and are part of the fabric of a community, and therefore should keep going, that's part of our leasing portfolio. They have to make a business case for recapitalization. Part of that is what the revenue is versus the...and the business case will usually justify a certain amount of recapitalization.
It's also a client relations issue, and Chandra, I think, would back me up here. We spend a lot of time on client relations, working with our farmers in the greenbelt, and so forth. Almost every case is different, but in each case we try to seek excellence and even to leverage partners, municipalities, and other funding to invest in the assets. I think it would be wrong to think there's a host of decaying, awful assets about to be—
Liberal
Shaun Chen Liberal Scarborough North, ON
I don't have much time left. What you have described makes perfect sense. I know that the Auditor General has described in his report a significant deficiency in asset management.
To the Auditor General, would you attribute that, essentially, to a need for further funding, or are there other aspects we need to consider?
Auditor General of Canada, Office of the Auditor General
Again, I think you can start by coming at the problem from the two extremes. Are there too many assets? If there can't be any more funding, then does that mean there are too many assets?
If there are not too many assets, and that's the stock of assets you want to have in the National Capital Commission, and they need to be properly maintained, then you have to make sure there's a proper funding. There can be anything in the middle, trying to balance those two things off.
Certainly, just going to what the assets are and what it's going to cost to maintain them, and saying, “Here's the amount of money that's needed” is the very simple calculation in the first instance.
I think, though, there also needs to be that very deep consideration of what it is we want the commission to do and what assets we want them to maintain. Once that is done, then really, the maintenance number needs to be a long-term plan of what's needed to manage the life cycle of all of those assets.
Once the assets that need to be maintained are decided upon and there's a plan for life-cycle management, it's becomes a fairly simple exercise, and the cost number really just falls out of that.
Conservative
The Chair Conservative Kevin Sorenson
Thank you very much.
To our committee, please make sure that we ask our questions through the chair. It prevents problems that can arise down the road.
Mr. Deltell, please.
Conservative
Gérard Deltell Conservative Louis-Saint-Laurent, QC
Thank you, Mr. Chair. I have questions for the witnesses, which I will ask through you, of course.
Earlier, we talked about 24 Sussex, the prime minister's residence. As we know, the Leader of the Opposition, the Governor General, and the Speaker of the House are all living in their official residences.
Are the other official residences as problematic as 24 Sussex, or do they receive regular upkeep?
Chief Executive Officer, National Capital Commission
In order to properly manage official residences, we need adequate funding, on one hand, and access to the residence to do the work, on the other. Stornoway, the official residence of the leader of the opposition; the Farm, the official residence of the speaker of the House of Commons; 7 Rideau Gate, the official home away from home for visiting dignitaries; and Rideau Hall, the official residence of the governor general, are all in good condition. Harrington Lake and 24 Sussex are in the worst condition. The condition of some subordinate buildings may also be poor, thus affecting the overall quality of the portfolio. Nevertheless, except for Harrington Lake and 24 Sussex, all the official residences are in good condition.
Conservative
Gérard Deltell Conservative Louis-Saint-Laurent, QC
As far as the other official residences are concerned, you do not foresee, in the short or medium term, having to deal with issues as serious as those plaguing 24 Sussex. Everything is under control. Is that correct?
Chief Executive Officer, National Capital Commission
Well, we do have to manage their life cycle.
Conservative
Gérard Deltell Conservative Louis-Saint-Laurent, QC
There are no big challenges for the other official residences compared to 24 Sussex. There is no short-term or medium-term problem, no big issue with that?
Chief Executive Officer, National Capital Commission
They all have life-cycle plans, and they all will have works to do. Eventually we would like to have an open book plan for the life-cycle management of all the residences so people could see that. We have to have swing spaces at times to move residents out to do major repairs, but these are all foreseen.
I think the committee can take comfort, though, that the residents of all of these official residences are quite comfortable. Some of the basic fundamentals of 24 Sussex and Harrington Lake need to be addressed. We are moving on some of those things even as we speak.
Conservative
Gérard Deltell Conservative Louis-Saint-Laurent, QC
As soon as possible.
Let's talk about the other issue. The Auditor General recognized that a quarter of your assets, or our assets, are in jeopardy. There's a big challenge with that.
What is your top priority after 24 Sussex?
Chief Executive Officer, National Capital Commission
We are working with the funding received in the federal budget 2018 based on the security and safety risk associated with assets. Some of the top priorities that we're dealing with are the Hog's Back bridge, which has had to close a number of times. It's an ancient bridge, and we will be doing important remediation work to it.
We're also working on the shoreline pathways that were damaged heavily in last year's flooding. That's another top priority for us.
The urban forest is taking an enormous hit from the emerald ash borer, an invasive species. We have now removed 20,000 ash trees. There are 20,000 more trees to go. It represents a risk to the public. Then there is all the replanting of that urban forest. That's a high priority within our program as well.
There are assets too many to mention, but many of them are infrastructure kinds of assets: overpasses, small footbridges, pathways, embankments, retaining walls. It's a broad portfolio.
As I say, it's assessed by the safety and security first, and then we move up the chain.
Conservative
Conservative
Chief Executive Officer, National Capital Commission
Yes.
Everything is in a prioritization. As I say, we spend money very carefully, and reshuffle this constantly with our experts.
Conservative
Gérard Deltell Conservative Louis-Saint-Laurent, QC
Do you plan some acquisitions in the next years?
Do you plan to acquire property or other assets that could become part of the NCC's inventory?
Chief Executive Officer, National Capital Commission
We don't foresee any acquisitions, except for Gatineau Park land. We may also purchase some Greenbelt land. In the 1980s, Treasury Board defined what constitutes the National Interest Land Mass, so we try to add corresponding land to the federal real property portfolio, not necessarily the NCC's. That may include a departmental portfolio. Most of the land we plan to acquire, however, is in the Gatineau Park.
Conservative