Public Accounts Committee on Oct. 31st, 2023

[The Chair, Conservative, John Williamson]

I call the meeting to order.

Welcome to meeting number 81 of the House of Commons Standing Committee on Public Accounts.

Pursuant to Standing Order 108(2), the committee is meeting today as part of our study on the National Capital Commission and, more specifically, the Rideau Hall storage building.

I'd like to welcome our two witnesses. From the Department of Public Works and Government Services, we have Lorenzo Ieraci, assistant deputy minister, policy, planning and communications. From the Treasury Board Secretariat, we have Brian Gear, executive director of policy, planning and performance in the priorities and planning sector.

Gentlemen, I understand you both have opening statements.

I'll begin with Mr. Ieraci. You have the floor for up to five minutes, please. Thank you.

[Lorenzo Ieraci, Assistant Deputy Minister, Policy, Planning and Communications, Department of Public Works and Government Services]

Thank you, Mr. Chair.

Good morning.

I'd like to begin by acknowledging that we are gathered on the unceded territory of the Algonquin Anishinabe peoples.

I am pleased to be here to support this committee in its study of the service, maintenance and storage garage building built by the National Capital Commission, or NCC, at Rideau Hall.

To do that, Mr. Chair, allow me to provide an overview of the relationship between the Minister of Public Services and Procurement, the Department of Public Services and Procurement and the NCC.

In 2015, the government published the “Open and Accountable Government” document, which sets out the framework for portfolio management and identifies the roles and responsibilities of ministers and their departments. This framework includes the central tenet of ministerial responsibility on a range of administrative, procedural and institutional matters.

As this committee knows, Crown corporations play an important function for the government in their capacity to operate at arm's length and deliver upon government priorities in a way that more closely resembles private entities as opposed to government departments. They benefit from considerable operational autonomy and are governed by part X of the Financial Administration Act.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

I have a point of order, Mr. Chair.

[The Chair, Conservative, John Williamson]

Go ahead, Ms. Sinclair‑Desgagné.

[Nathalie Sinclair-Desgagné, Bloc, Terrebonne, QC]

Actually, I think the problem has just been solved. I'm participating remotely and had no video image of the room where the meeting is being held, but I just briefly saw on screen what was happening.

[The Chair, Conservative, John Williamson]

All right. The clerk tells me that everything is working now, so we can continue.

You have the floor, Mr. Ieraci.

[Lorenzo Ieraci]

Thank you very much, Mr. Chair.

The open and accountable government framework clearly sets out the importance of respecting the operational independence of these organizations, while also ensuring that their overall direction and policies align with those of the government.

The National Capital Commission is a crown corporation whose mandate is set forth in its enabling statute, the National Capital Act. Under that act, the commission has a separate legal identity and its own control and accountability frameworks.

As the National Capital Commission is a crown corporation, oversight of its activities is the responsibility of its board of directors. The board must ensure that it acts in the greater interest of the crown corporation and that it does so cautiously and diligently. The board is ultimately required to report to Parliament through the minister.

The day‑to‑day activities of the National Capital Commission are the responsibility of its chief executive. That official is ultimately accountable to the board of directors for the management and performance of the crown corporation as a whole.

As stated in the 2015 document entitled “Open and Responsible Government”, Public Services and Procurement Canada is responsible for ensuring that the government has an overall strategic direction, which consists, in particular, in examining new potential activities and guiding their development.

We have a number of key intervention elements at our disposal to assess and monitor the crown corporation's performance in order to inform the minister as to whether we believe that the crown corporation's performance is consistent with the achievement of public policy objectives. One of those elements is the review of the annual corporate plan submitted to the minister so the minister may recommend its approval to the Treasury Board.

While Crown corporations function at arm's length from the government, this lever allows ministers to ensure that the overall direction is consistent with government policy.

In our review of the NCC's corporate plan, we ensure that the overall direction and performance align with government policy and direction. What is not included as part of the plan are specifics for every project being delivered or the underlying business decisions behind them—this is left to the Crown corporation and its board of directors.

For example, we are working with the National Capital Commission and other government bodies on asset management, working towards a plan and funding to address the deferred maintenance of assets within the NCC portfolio.

The NCC's corporate plan would include the overall plan, with the NCC responsible for implementing day-to-day project management under its own authorities.

In short, Public Services and Procurement Canada cooperates, at arm's length, with the National Capital Commission and assists the Minister of Public Services and Procurement in ensuring that the commission's direction reflects the strategic objectives and general direction of the government.

Thank you. I will be pleased to answer your questions.

[The Chair, Conservative, John Williamson]

Thank you very much.

Mr. Gear, you have the floor now for up to five minutes, please.

[Brian Gear, Executive Director, Policy, Planning and Performance, Priorities and Planning Sector, Treasury Board Secretariat]

Thank you, Mr. Chair.

Good morning, everyone.

My name is Brian Gear and I am the executive director at the Treasury Board Secretariat responsible for the Crown corporations centre of expertise. The centre of expertise provides advice and guidance on matters on governance, accountability and reporting. It also coordinates horizontal government-wide initiatives applicable to Crown corporations.

Mr. Chair, Parliament set out the governance framework for Crown corporations in the Financial Administration Act, part X, which places the board of directors to be accountable to Parliament through a responsible minister. In the case of the National Capital Commission, it is the Minister of Public Services and Procurement. The board of directors is responsible for the oversight of a Crown corporation's business activities, to act in the best interest of the corporation and to exercise due care and diligence. It is responsible for providing strategic direction, overseeing management performance and holding its management to account. Responsibility over the day-to-day operations of a Crown corporation is vested in a chief executive officer, who is accountable to the board of directors for the overall management and performance of the corporation.

Given their unique mandates and operating environments, Crown corporations are not subject to the financial, administrative, budgeting and human resource regimes that apply to departments. This provides them with the requisite managerial and administrative flexibility they need to be able to deliver on their mandates. These factors explain why Treasury Board oversight of Crown corporations is at a different level from that of departments, as Crown corporations have greater managerial autonomy.

Treasury Board's primary responsibility with respect to Crown corporation governance is the approval of corporate plans and operating and capital budgets on the recommendation of the responsible minister. To support its corporate plan responsibilities, Treasury Board makes regulations and the Treasury Board Secretariat issues high-level guidance with respect to the form and content of the plans, as well as the summaries of corporate plans and budgets. These summaries are then tabled in Parliament by the responsible minister following Treasury Board approval.

In its role of supporting Treasury Board, the secretariat reviews the corporate plan and capital and operating budgets that have been submitted by the responsible minister. The submissions are reviewed with questions that include the following: Do the activities articulated in the corporate plan and budgets align with the Crown corporation's mandate? Do the activities align with the government's overall policy and fiscal direction? Is the plan sustainable from a financial point of view?

Specific projects that fit within the mandate and broad activities approved in the corporate plan are not subject to Treasury Board scrutiny. As Mr. Ieraci explained, responsible ministers and portfolio lead departments have a role. As I said earlier, the board of directors has a primary oversight responsibility and the CEO is responsible for the day-to-day operations.

Finally, Crown corporations are accountable to Parliament through the board of directors and the responsible minister and report their plans and results to Parliament regularly.

With that, Mr. Chair, I'm available to answer your questions.

Thank you.

[The Chair, Conservative, John Williamson]

Thank you both very much.

I'll now turn to our first round. We have until noon, so I think we'll be able to get through two full rounds.

Mr. Stewart, you have the floor for up to six minutes, please.

[Jake Stewart, Conservative, Miramichi—Grand Lake, NB]

Thank you, Mr. Chair.

I thank the witnesses for being here today. We appreciate it.

First off, who approved this expenditure?

Either of you can answer.

[Brian Gear]

Again, what happens in terms of Treasury Board involvement is the approval of the corporate plan, as well as the capital and operating budgets. The plan and the budgets cover major activities and significant line items within the budgets. In this case, with this particular project, I think it would be rolled up in a higher-level line, because these are really meant to be higher-level documents.

[Jake Stewart, Conservative, Miramichi—Grand Lake, NB]

How many floors are contained within the $8-million barn project?

[Lorenzo Ieraci]

How many...?

[Jake Stewart, Conservative, Miramichi—Grand Lake, NB]

How many storeys? How many floors?

[Lorenzo Ieraci]

I actually don't have the answer to that question. I know it's a vehicle storage facility. Based on the pictures, it seems to be a one-storey building, but I have not visited it. The National Capital Commission could probably provide you with details about the building, its size, the number of floors, and so on.

[Jake Stewart, Conservative, Miramichi—Grand Lake, NB]

If it is in fact a one-storey, one-floor building, or barn, can you explain why it has an elevator?

[Lorenzo Ieraci]

In that case, it must have multiple storeys. My understanding, based on publicly available information, is that the building serves a number of functions, including vehicle storage. It's a repair garage. It's equipment and tool storage. It's a workspace. My understanding is that the National Capital Commission uses this building for operational equipment to be able to manage the 79 acres of land at Rideau Hall, but in terms of how—

[Jake Stewart, Conservative, Miramichi—Grand Lake, NB]

Thank you for that. I appreciate that.

My point is.... Can you see in the picture? I don't know if I can table these, Chair. There are no French and English documents, just the photo. I think this is important. It's clearly a one-storey building that has an elevator.

Does the elevator go up or down? If it goes down, what's under there?

[Lorenzo Ieraci]

The question would have to be answered by the National Capital Commission. I would be speculating. I would assume that if it's a garage.... If there is an elevator, it could be to move equipment up or down, potentially, but I'm really speculating. The National Capital Commission should be able to answer those questions for you.

[Jake Stewart, Conservative, Miramichi—Grand Lake, NB]

Can you explain why $5,870 was spent on fibre optic cabling for the $8-million barn project? We know it has an elevator. We know it's one storey, and it's fully equipped with fibre optics. I'm curious, why does it need the fibre optics to store vehicles and tools?

[Lorenzo Ieraci]

The National Capital Commission would be able to answer that question. Regarding the requirements, in terms of what was needed for the operation of the building, the NCC would be able to define or explain why that was necessary.

[Jake Stewart, Conservative, Miramichi—Grand Lake, NB]

I appreciate that.

Back home in Miramichi—Grand Lake most of us have a building, a barn, a baby barn, or a storage shed. Depending on where you lived, and where you grew up, you might call it something different. None of our storage sheds, or barns, cost $8 million. None of them have elevators, and none of them have fibre optics. As a matter of fact, the people in my riding don't have access to fibre optics in my hometown of Blackville, for example. We're a small municipality. We have satellite Internet and other options. We don't have fibre optics, so it's really hard for the public to understand how much waste would be put into an $8-million barn.

Can you explain the marketing and communications firm, and why it was engaged for nearly $6,000 on the $8-million barn?

[Lorenzo Ieraci]

Unfortunately, Mr. Chair, that would be a question that would have to be directed to the National Capital Commission.

[Jake Stewart, Conservative, Miramichi—Grand Lake, NB]

Can you guys answer any questions?

That's a better question. Are you here to answer questions or to deflect? Which one?