Public Accounts Committee on May 3rd, 2018

[Marc Seaman]

No.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

It's only the cities of Gatineau and Ottawa, then.

Do they have a veto?

[Marc Seaman]

No.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Do the majority of members have to support the decision?

[Marc Seaman]

Yes. It must have majority support.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Have you ever had a situation where the vote was close? Was there a time recently when the decision did not turn out as you had hoped?

[Marc Seaman]

I haven't been on the board very long, only 11 months.

For decisions that require some thought, the question is clearly formulated so that it results in the best possible decision.

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Very good.

Thank you very much, gentlemen.

[The Chair, Conservative, Kevin Sorenson]

Thank you, Mr. Deltell.

We'll move to Mr. MacGregor, and then Mr. Massé.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Thank you, Mr. Chair.

Mr. Kristmanson, I still want to cover the issue that to mitigate the risk of insufficient financial resources, there was a delay in maintaining some assets. You knew you had a constrained budget, you knew this was going to affect how you could maintain these assets, and I think you also knew the risks associated with that, namely, that the longer you left them the more they would cost you in the long run.

We have a responsibility in this committee to make sure that the nation's finances are being spent well, and also that we have an adequate number to do the job we're doing. I'm concerned that with the knowledge the NCC had, it still did not make it into the minister's hands.

What were the discussions around that? Given all of that knowledge, why did you feel that the information still didn't warrant making it into that report? Were the risks ever clearly explained, going up the chain?

[Dr. Mark Kristmanson]

I can't speak for my predecessors because I don't know what they may have said or not said in ministerial briefings, but I can say that I raised it as an issue in 2014. As I say, the comment that came back was that “you have substantial reserves and why are you not using them?”

In fact, many of the reserves were attributed. They were restricted funds, but that was the observation that was made, so the board—I think wisely—agreed to have a target to use these reserves for legacy projects for the 150th anniversary of Canada that also dealt with asset deficiencies. I think we did very well with that. I won't take the committee's time, Mr. Chair, with the details on what we achieved.

Those funds have now run through the system. At the same time, over the past three years, we've been developing our case, really, for the long-term recapitalization of the commission, and I think the government has listened to us.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

I want to get in one last quick question. It's mentioned in the Auditor General's report that there are “revenue-generating and cost-reduction initiatives”. It said, “However, these activities have not yet had a significant financial impact.” Do you project this will change in the coming years? Can you provide some explanation on that?

[Dr. Mark Kristmanson]

Yes. We made this a real focus. Bringing down our vacancy rates in all of our leasing portfolio has also increased our revenues.

We have a series of projects unfolding over the next few years where we hope we can increase our revenue base by $5 million in our current five-year plan. This will help take some of the financial pressure away.

[Alistair MacGregor, NDP, Cowichan—Malahat—Langford, BC]

Thank you.

Thank you, Chair.

[The Chair, Conservative, Kevin Sorenson]

It is now over to Mr. Massé.

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

Thank you, Mr. Chair.

My questions will be along the same lines as those I asked earlier.

I'd like to know whether you reviewed all of your assets to determine whether some could be sold. You said you had acquired some land, but I didn't hear you talk about the flip side to that, in other words, selling land to give you more latitude budget-wise.

Do you do reviews like that?

[Dr. Mark Kristmanson]

In the early 2010s, a board committee examined the issue of selling assets in order to generate revenue and contain costs, as the Auditor General pointed out. The committee, together with NCC management, identified some 90 properties that could in theory be sold.

When I took over as CEO in 2014, I conducted a review, together with the executive. I determined that nine properties could easily be sold. A score of considerations come into play for each property. After visiting the nine properties, we decided to ask Treasury Board to initiate the sale of those assets. We were given approval to sell four of them, I believe. My team can check the exact number.

To date, we have initiated the sale of two of the properties. It's a lengthy process because we have to advise all federal partners of our intention to sell, including Indigenous and Northern Affairs Canada. Then, we can initiate the process. We have sold two assets, but we want to keep up those efforts. The revenues from the sale go into the acquisitions fund, and that money can be used only to purchase national interest land mass.

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

I gather that the money from the sale of those assets cannot be used for anything other than buying specific land. Therefore, it cannot be put towards the maintenance or renewal of various buildings, for instance. Is that correct?

[Dr. Mark Kristmanson]

That is correct.

That was what Treasury Board decided in 2006 or 2007.

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

I see.

If you wanted to use that money for a different purpose, would the act have to be amended to change your mandate?

Could you kindly explain what exactly ties revenues from sales to a particular use?

[Dr. Mark Kristmanson]

It is not set out in the National Capital Act. It actually comes from a Treasury Board directive.

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

Just out of curiosity, I'd like to know how much the 90 properties you reviewed are worth.

If you aren't able to give us their value, could you tell us how much the nine properties you identified are worth?

I just want to get an idea.

[Dr. Mark Kristmanson]

I don't remember exactly how much. Some of the properties are quite small, so we are only talking about hundreds of thousands of dollars or less. Others are worth millions. I can get back to the committee with those numbers, but I can't give you an estimate now, unfortunately.

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

That's fine.

Mr. Chair, might I ask that, through you, the witness provide the committee with the value of those properties, so that we know what's what.

Do I have another minute?

[The Chair, Conservative, Kevin Sorenson]

One minute.