Mr. Speaker, I have asked for time this evening to speak because there is a big problem in the Department of National Defence which is not being addressed.
I have asked several questions of the minister over the past three months that I do not think have been properly dealt with. The federal government moves up to 20,000 households per year, three-quarters of which are military personnel. The cost of these moves is up to $100 million. Once storage, real estate fees, legal charges, mortgage expenses and other benefits are thrown in the tab comes to well over $200 million. You would think that a big customer like the federal government which accounts for
up to 35 per cent of Canada's moving business would pay rates somewhat less than the industry average. Instead, the government pays 23 per cent more than the CBC, Canadian National Railways, Northern Telecom and Canada Post. How can this be?
Moves are handled by a four member committee representing National Defence, the RCMP and Supply and Services. This committee has its own bureaucracy of over 105 public servants, many of them located in defence headquarters.
To begin with, what are military men doing handling household moves? These trained military personnel should be doing things like peacekeeping and organizing food aid.
The federal moving business is tendered but it all goes to four major moving van lines. These van lines were convicted of price fixing in 1983 and fined $250,000. They are now under investigation again for various irregularities. The van lines get the government business and then dole it out to their carrier agents. You would think that the government could get better prices by tendering to more than just four companies. But the government's own rules prevent it from doing so.
It requires companies that bid to have exclusive carrier agents in at least seven provinces capable of handling 55 per cent of the government's business.
Such restrictions do not exist in the United States. In the U.S. local moving companies can represent up to three different van lines. These ridiculous restrictions guarantee the government's business to the four van lines, three of which are 100 per cent American owned.
There are move management companies which say they can save the government between $10 million and $25 million on its moves, given the chance to prove themselves. In fact, the previous government disbanded this moving committee and ordered that the two private sector companies be given the chance to administer government moves in a pilot project. But once elected, the present government cancelled this pilot project which seems odd given its stated commitment to ferret out waste and cut costs.
One move management company which could have participated in this pilot project has been doing moves for the House of Commons. This company says that it has saved 35 per cent in current tariff costs. In addition, this company collects its fee not from the government but from the mover. The government's moving committee, the one that was to be disbanded, said that it cost them only $100 to manage each move. My understanding is that the defence department's own audit staff has found the management costs per move to be significantly higher than $100.
I wonder why this audit, which was completed in February, is taking so long to become public? I have raised several points here which I would like to repeat: Military men should not be involved in household moves. Private sector move management companies should be given a chance to prove that they can save the government millions of dollars while providing the same level of service.
The van lines which have been convicted of price fixing in the past and which are under investigation today should not be given a monopoly over government moves.
I am sure the defence department is on a limited budget and has certainly seen restrictions. I know that it could well use this $25 million that is estimated to be saved in these household moves in areas such as better equipment for our peacekeepers.
I would ask the minister and the parliamentary secretary to pursue this.