Public Accounts Committee on Oct. 24th, 2023

[The Chair, Conservative, John Williamson]

This meeting is called to order.

Welcome to meeting number 79 of the House of Commons Standing Committee on Public Accounts.

Pursuant to Standing Order 108(3)(g), the committee is meeting today to study “Report 3: Rehabilitation of Parliament’s Centre Block—Public Services and Procurement Canada” of the 2023 reports 1 to 4 of the Auditor General of Canada.

I would now like to welcome our witnesses. Good morning, everyone.

From the Office of the Auditor General, we have Andrew Hayes, deputy auditor general; Susan Gomez, principal; and Elsa Da Costa, acting principal.

From the Department of Public Works and Government Services, we have Arianne Reza, deputy minister; Robert Wright, assistant deputy minister of the science and parliamentary infrastructure branch; and Jennifer Garrett, director general of the Centre Block program in the science and parliamentary infrastructure branch.

Mr. Hayes, you have the floor for five minutes, and then I'll go to the Department of Public Works and Government Services.

It's over to you, Mr. Hayes, for five minutes.

[Andrew Hayes, Deputy Auditor General, Office of the Auditor General]

Mr. Chair, thank you for this opportunity to discuss our report on the rehabilitation of Parliament's Centre Block, which was tabled on March 27, 2023. I would like to acknowledge that this hearing is taking place on the traditional unceded territory of the Algonquin Anishinaabe people.

Joining me today are Susan Gomez and Elsa Da Costa, who were responsible for the audit.

In this audit, we looked at whether Public Services and Procurement Canada effectively managed the scope, schedule and cost during the early phases of the rehabilitation program, and whether the department, in cooperation with key partners and stakeholders, put in place a governance framework to support timely decisions.

Based on a 2021 estimate, the cost of rehabilitating Parliament's Centre Block and of building the new Parliament Welcome Centre is expected to be between $4.5 and $5 billion. This vast program involves many stakeholders and partners, including the House of Commons, the Senate, the Parliamentary Protective Service and the Library of Parliament.

Overall, Public Services and Procurement Canada used flexible approaches to effectively manage cots and schedules during the planning, design and early construction phases of the rehabilitation program. The department also balanced the requirements of the parliamentary partners, the heritage character of the building, sustainability and equitable access for parliamentarians and the public.

We found that the department assessed the Centre Block building and site to fully understand the building's structural and mechanical conditions, and it consulted and worked with experts to integrate environmental sustainability and accessibility elements. The department also consulted with experts and stakeholders to develop the scope of the program and adjusted workflows when faced with delayed planning decisions on important user requirements, such as office space.

In our 2010 audit that looked at the rehabilitation of the Parliament buildings, we recommended changes to the governance framework meant to guide the overall program. In the current audit, we found that decision-making by parliamentary partners remained fragmented.

Though Public Services and Procurement Canada established a governance framework for the implementation of the program, parliamentary partners were slow to endorse key decisions on some user requirements. At the end of our audit period, some important decisions remained outstanding, such as on the security requirements for Centre Block. To support timely decision-making from parliamentary partners, we recommended that the department submit a progress update to both the Speaker of the House of Commons and the Speaker of the Senate at least twice a year.

We found that Public Services and Procurement Canada had processes in place to manage the costs of the program in its early phases and mitigate the risk of rising costs. For example, the department had methods to estimate and monitor costs, manage changes and risks, and provide quarterly reports to departmental committees. We also found that the department used a flexible approach to manage the schedule and timing of activities. For example, it went ahead with moving equipment and relocating utilities, monuments and trees. This helped to mitigate the impact of delayed decisions and keep the program on schedule in its early phases.

At the time of our audit, the department kept spending below the 2016 approved funding. As of July 2022, the department had spent more than $880 million. Of that amount, $450 million was spent on planning and design activities, and approximately $430 million on early construction activities, such as the excavation of the visitor centre site and the removal of hazardous material from the Centre Block building.

Given the size and complexity of this program, a streamlined decision-making process is needed to effectively manage the costs and timelines of the rehabilitation program. It is also important to maintain rigorous cost management processes and to monitor the risk of cost increases as the program moves further into the construction phase and as spending increases between now and the planned completion date of 2030 to 2031.

Mr. Chair, this concludes my opening remarks. We would be pleased to answer any questions the committee may have.

Thank you.

[The Chair, Conservative, John Williamson]

Thank you very much, Mr. Hayes.

We will now hear from the Department of Public Works and Government Services.

[Arianne Reza, Deputy Minister, Department of Public Works and Government Services]

Thank you, Mr. Chair.

Good afternoon. I'm pleased to appear before the committee to discuss the Auditor General's report on the rehabilitation of Parliament's Centre Block.

Before I begin, I would like to acknowledge that we are gathered today on the traditional unceded territory of the Algonquin Anishinabe nation.

With me today are Rob Wright, the assistant deputy minister responsible for the overall restoration and modernization of Canada's parliamentary precinct, and Jennifer Garrett, the director general leading the Centre Block rehabilitation project.

The restoration and modernization of Centre Block is the largest and most complex heritage rehabilitation project ever undertaken in Canada. Public Services and Procurement Canada is carrying out the work on the iconic Centre Block and the broader parliamentary precinct hand in hand with Parliament.

Given the size and complexity of this project, I am encouraged by the positive observations made by the Auditor General. The Auditor General recognized our use of flexible management approaches and reported that the department has effectively managed the scope, schedule and costs of the rehabilitation work, keeping the project on schedule and within budget.

The report also highlighted the department's efforts to collaborate with stakeholders, including indigenous partners and experts, to rehabilitate Centre Block on behalf of Parliament and all Canadians.

Mr. Chair, when it comes to the governance of the rehabilitation program, Parliament is responsible for determining and making decisions on requirements. PSPC is responsible for the planning, design and construction work, including the budget and time needed to deliver on these requirements. This complex project is about balancing budget and schedule constraints with sustainability, heritage, accessibility and inclusivity alongside the need for modern, safe and secure facilities to support the operations of Parliament.

Achieving this balance is not easy. Success requires timely and sometimes difficult decisions to be made. The Auditor General acknowledged that while considerable efforts have been made to strengthen governance and decision-making, some challenges remain.

The Auditor General's report includes three recommendations—first, that to support timely decision-making, the Minister of Public Services and Procurement table a program update to the Speakers of the Senate and the House of Commons at least twice a year; second, that a gender-based analysis plus assessment be undertaken to ensure that Centre Block is inclusive and reflects the diversity of Canada's peoples; and third, that the department publish long-term vision and plan annual reports within the same calendar year.

The department agrees with these recommendations and we are positioned to take action on all three within this calendar year.

With regard to the Auditor General's recommendation to further improve governance and decision making, the Minister of Public Services and Procurement has delivered the first installment of semi-annual updates to both speakers.

The update includes key parliamentary decisions required to support the on-time and on-budget delivery of not just the Centre Block, but all major projects being delivered under the Long Term Vision and Plan.

As to the recommendation that a Gender Based Analysis Plus assessment be undertaken, the department will update its GBA+ assessment for the Long Term Vision and Plan by 2024, with a more detailed focus on the Centre Block.

As to the recommendation regarding timely and clear reporting, the department will publish the 2022-23 Long Term Vision and Plan annual report before the end of this calendar year.

Mr. Chair, the department is working hard to ensure the project remains on track, and that the results reflect the diverse needs of parliamentarians and all Canadians.

Public Services and Procurement Canada is appreciative of the work of the Auditor General in recognizing these efforts.

Once restored and modernized, Centre Block will serve the needs of a modern parliamentary democracy. It will be sustainable, secure, and accessible to all Canadians, enabling more Canadians to engage in our country's parliamentary tradition and democratic processes.

Thank you, and we're available for questions.

[The Chair, Conservative, John Williamson]

Thank you, all, very much.

I am going to turn to our first round, with Mr. Nater.

Mr. Nater, you have six minutes, please.

[John Nater, Conservative, Perth—Wellington, ON]

Thank you so much, Mr. Chair.

Thank you to our witnesses. It's great to have you all with us today.

My questions are going to begin with Public Works. I may go to the Auditor General's Office if I have time.

First, thank you, Mr. Wright and Ms. Garrett, for the tour last week. It was my third time visiting the Centre Block project, which is always a fun and exciting place to visit, especially now that it's not accessible to the public, so it was a special honour to be able to do that.

I want to start off with some of the lessons learned from the West Block project, where we're now sitting, and how those were able to be taken over and applied to what's now happening with the Centre Block project. How were those lessons learned applied?

[Arianne Reza]

That's an excellent question, as we are building on our experiences in terms of project management, procurement strategy, and how we engage on the governance with parliamentarians.

With that broad swath, I'll turn it over to Mr. Wright for some more precision.

[Robert Wright, Assistant Deputy Minister, Science and Parliamentary Infrastructure Branch, Department of Public Works and Government Services]

Thanks very much for the question.

Lessons learned are really at the core of the methodology that we undertake within the precinct and the broader department. We have a searchable database for lessons learned that all project managers have to use. Certainly, many were pulled from the West Block and are being applied to the Centre Block rehabilitation project. I'll mention a few really important ones.

The first one is a detailed assessment and investigation program. With heritage buildings, among the biggest risks are the unknown conditions. What are you going to find behind the walls? For Centre Block and the Parliament welcome centre, we did the most exhaustive assessment or investigation program that we've ever undertaken. I would say that it's paid off, whereas in the West Block we had an estimate of the amount of asbestos-containing material that was quite high, but we ran into a lot more. We had an estimate of the condition of the structural elements within the building, but it was much worse than we anticipated. With the very detailed assessment that we've done on Centre Block, we've run into very few surprises and very few key risks that we didn't anticipate.

I would say the biggest surprise, which we found quite early on in the project, was that the foundation of the east side of Centre Block, the Senate side, was not a modern foundation. It was more of a rubble core. We addressed that within the contingencies of the project. We essentially put a sandwich of cement around that and tied it together with steel. It was stabilized and we were able to move on until we can put a modern foundation there in the future. That's really been the biggest surprise so far.

There are a couple of other elements that are really important. One is carrying out activities in parallel, rather than in sequence. The Auditor General's report mentions these flexible approaches. That really comes from the experiences of previous projects. In some cases, it makes sense to be doing the design and the construction in parallel. For example, the interior demolition and abatement, the removal of the asbestos-containing material and the excavation for the Parliament welcome centre were not dependent on a lot of functional requirement decisions from Parliament or design elements. We were able to proceed with that important construction activity, which got it out of the way and de-risked the project.

Another thing to mention would be mock-ups. These are very important. We'll be engaging Parliament, hopefully soon, on determining design mock-ups for offices for parliamentarians, as well as for the seating in the House chamber, given that the size of the chamber has not grown and the number of MPs has grown significantly since Centre Block was originally constructed. We really need to work hand in hand with members to design a new seating arrangement in the House, which potentially could be phased in over time. That's going to take work with Parliament.

Perhaps the last one I'll mention is advance testing. This is linked to mock-ups. Certainly the operations of Parliament are increasingly digitally enabled, for example. We want to ensure that all of the testing has been done well in advance, before things go live. This is a no-fail environment. That's critically important.

There's a range of other elements. For example, doors in these facilities are not simple doors. They're essentially parts of a hardware and software system, which are integrated into a security system. Everything has to work perfectly for the doors to work. They're linked to video cameras, etc.

Advance testing on many of the elements is critical to ensuring that Parliament will work for you.

[John Nater, Conservative, Perth—Wellington, ON]

I think I just have a couple of seconds left, so I'll say that I'm sure there's a joke I can make about the Senate being built on a rubble foundation, but I certainly wouldn't go there with our friends in the other place.

Thank you, Chair.

[The Chair, Conservative, John Williamson]

Thank you very much, Mr. Nater.

Mr. Wright, I must confess that I didn't recognize you without your hard hat and workboots on. It's nice to see you away from the construction site and into the workings of Parliament today. Of course, you're hard at work there as well.

I'll turn now to Ms. Yip.

You have the floor for six minutes, please.

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

Good morning, and welcome to the public accounts committee.

I went on a tour of the rehabilitation in the spring, and I was very impressed with the complexity and progress of the construction. It was fascinating that the hole was so deep and that every little detail—whether it was for the safety of the people participating on the tour or for the workers—was well thought out.

I'd like to begin with Mr. Hayes.

In the report, the OAG noted that the early phases were effectively managed. Could you elaborate?

[Andrew Hayes]

Yes, thank you.

We said that the costs, early design and conceptual work were well managed. We said that, at this point in time, the department has kept spending below the approved amounts, which is important. Up to the point in time when our audit was completed, which was a little while ago now, they were on schedule.

We did issue a bit of a warning flag. As time moves on, and despite the flexible approaches the department has taken to date, if there are changes to user requirements or big adjustments required, they will have an impact on costs moving forward. We wanted to make sure that signal was out there, as well.

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

Were there other lessons learned in the early phases that were brought to the other part of your audit?

[Andrew Hayes]

I think the previous audit we did, in 2010, highlighted the importance of an effective governance framework. In that context, breaking down silos and avoiding fragmentation of decision-making are important. We saw some efforts to address that. It wasn't completely addressed, but, as the audit showed, the department worked around some of those challenges in the early stages of this project.

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

What were some of the challenges?

[Andrew Hayes]

Delaying decision-making on user requirements was probably the biggest one.

There is still an outstanding matter, which we reported on at the beginning of our audit, relating to the security requirements around Centre Block. Obviously, there are a lot of factors that go into considering what's supposed to happen for security, and a lot of partners to work with. As those decisions take time, though, it puts pressure on other elements of the project, including construction. If changes are made after construction has started, the costs and schedule impacts can be pretty significant.

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

Therefore, it's important to have that planning in place and take the time to make sure it's done right, especially with security.

[Andrew Hayes]

Absolutely. I think it also speaks to the recommendation we made about making sure parliamentarians of both houses and other partners have complete information as to the impacts of delayed decisions and changes. That's important, so fully informed decisions can be made, as well.

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

Thank you.

Ms. Reza, can you describe in more detail the overall decision-making process when it comes to deciding on designs and so forth? PSPC is managing the project, but the department isn't the decision-maker.

How do you get input from parliamentarians and others involved?

[Arianne Reza]

Thank you very much, Mr. Chair, for the question.

As it's structured now, we established after the 2010 audit our attempt to make decision-making more streamlined for parliamentarians, and for PSPC to support that decision-making. We have monthly meetings with various partners. We have touchpoints where we work with partners, such as the House of Commons, the Senate, the library and PPS, to talk about the various elements. We bring everybody together.

We have now, post-audit, added a new report that we already table semi-annually. Minister Duclos has tabled it with the House of Commons Speaker, as well as the Senate Speaker. It outlines not only the progress made to date but also the key decision points that need to be made going forward, in the hope that this will be an additional catalyst to help us streamline the existing governance process.

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

I'm sorry. I can't hear you. Perhaps you could lean a little closer to the mic.

Thank you.

[Arianne Reza]

Okay.

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

What were some of the key decision points?

[Arianne Reza]

I apologize. Let me repeat that.

I would say that, going back to 2010, when the previous OAG report came out, we made some significant efforts, working with our partners in the parliamentary precinct, to streamline a decision-making process and better support it.

We have monthly meetings at senior levels, if not more frequently. We have touchpoints built into the process. Most recently, based on the recommendations of the Auditor General in this report, we added a semi-annual report, which the Minister of Public Works has tabled with the Speaker of the House of Commons, as well as the Speaker of the Senate. It outlines our progress to date on Centre Block and also puts en vitrine outstanding decisions that need to be made in the upcoming time. Some are joint decisions between both houses, some are broader across the parliamentary partners and some are unique, but at least we have a way to identify those that are there and the timelines required.

[Jean Yip, Liberal, Scarborough—Agincourt, ON]

I didn't realize it went back as far as 2010.