OGGO Committee Meeting

    Good morning.

    There are more of us than usual around the table today. We're continuing our study of supplementary estimates (B) 2014-15.

    We are fortunate to have with us today officials from the Department of Public Works and Government Services, and Shared Services Canada.

    We look forward to hearing from you. You each have 10 minutes, and then the committee members will no doubt have many questions for you. So let's get right to it.

    We'll start with the Department of Public Works and Government Services, represented by Mr. Lakroni, Mr. Mongeau, Ms. Chahwan and Ms. Caloren.

    Over to you, Mr. Lakroni.

    Thank you.

    Mr. Chair and members of the committee, I am pleased to be here today on behalf of Public Works and Government Services Canada, or PWGSC, to discuss the department's 2014-15 supplementary estimates (B) and its 2013-14 departmental performance report.

    With me today are Nancy Chahwan, Assistant Deputy Minister of the Parliamentary Precinct Branch, Claire Caloren, Associate Assistant Deputy Minister of the Acquisitions Branch, and Pierre-Marc Mongeau, Assistant Deputy Minister of the Real Property Branch.

    With responsibilities that range from preserving the heritage buildings here on Parliament Hill to issuing every payment for the Government of Canada, PWGSC provides services that support parliamentarians, public servants, and departments and agencies in the delivery of their mandate to Canadians.

    For these supplementary estimates (B), the department is requesting $136.3 million to cover accommodation requirements in Crown-owned buildings and leased space.

    This request represents a continuation of annual program funding and is consistent with real property portfolio management practices in previous years.

     Of this amount, $80 million will provide a stable source of funding for the fit-up of PWGSC's accommodation portfolio. This amount will supplement the departmental existing fit-up budget and allow PWGSC to implement a 20-year fit-up cycle for its accommodation inventory.

    The new fit-up budget is ongoing and replaces the annual request for incremental in-year funding.

    There is $56.2 million for increases in non-discretionary expenses associated with crown-owned buildings and leased space, and is allocated as follows: $31 million to provide stable funding for PWGSC's office space inventory and to replace funding that had previously been sought annually to address accommodation fluctuations, and $25.2 million to cover the cost of inflation associated with PWGSC's real property portfolio.

    The inflation rate for 2014-15 is estimated at 1.6% on an operating budget of $1.6 billion.

    This funding request is consistent with those of previous years and will cover the increasing cost of utilities, security, rents, and property taxes.

    PWGSC is also reimbursing a net amount of $11.1 million to other government departments, mainly for reductions in their accommodation requirements.

    With the aforementioned items, the net amount sought in the supplementary estimates (B) is $125.2 million, which would result in a net appropriation of $2.9 billion.

    Mr. Chair, I would like to turn to PWGSC's departmental performance report.

    This report highlighted that in 2013-14 the department launched the defence procurement strategy to provide the Canadian Armed Forces with the equipment it needs in a timely and cost-effective manner, while creating jobs and economic growth for Canadians.

    It supported Canadian small enterprises through the build in Canada innovation program by awarding a total of 77 contracts to support the testing of innovations at the pre-commercialization stage.

    Last, PWGSC continued to work on the rehabilitation of the Parliament Buildings.

    The department did all of these things while achieving, in 2013-14, cumulative planned budget savings of $154.7 million, which underscores its commitment to sound financial management in all of its operations.

     We have been able to find efficiencies in every sector of the organization. For example, over the last four years, PWGSC has cut its travel expenditures by half, while leveraging the use of technology.

     In keeping with the government's priorities of job creation, economic growth and long-term prosperity for Canadians, the department supports the consistent delivery of high-quality services to Canadians, while providing measured value for the dollars with which it is entrusted.

    Thank you, Mr. Chair and committee members.

     My colleagues and I would be pleased to answer your questions.

    Mr. Lakroni, thank you for your presentation.

    Without further ado, I will now turn the floor over to Ms. Tromp, Acting Senior Assistant Deputy Minister for Corporate Services and Chief Financial Officer at Shared Services Canada.

    You will also have a maximum of 10 minutes to give your presentation.

    Merci, and good morning everyone.

    I'm here today to talk about the supplementary estimates (B) 2014-15 as well as the newest departmental performance report, 2013-14, for Shared Services Canada. I will present the key results we've achieved to date as well as outline some of the next steps on the road ahead for SSC.

     Joining me today are my two colleagues from the department. Peter Bruce is the senior assistant deputy minister of Projects and Client Relationships. He is available to answer questions about IT transformation and projects. Also with me is Manon Fillion, the deputy chief financial officer.

    Mr. Chair, just over three years have passed since Shared Services Canada was created. In August 2011 SSC was given the mandate to both operate and transform the IT infrastructure that supports the programs and services delivered by 42 departments and agencies.

    The objectives are clear: consolidating, standardizing, and transforming the delivery of Government of Canada e-mail, data centres, and network services. Simply put, SSC is planning and managing the IT infrastructure for the Government of Canada with a view to creating savings and efficiencies and eliminating duplication. SSC is securing systems and building a modern IT platform that will better support departments in delivering benefits for Canadians. It is about applying solutions across the government that are modern and sustainable.

    As detailed in SSC's most recent departmental performance report, we are making progress against these objectives. SSC has already generated savings of $150 million annually by consolidating contracts, modernizing telephone services, and keeping internal overhead low. In addition to this, SSC will be saving $50 million by moving government departments to a single outsourced e-mail service. SSC is also achieving $8.7 million in savings by consolidating workplace technology procurement.

    There are four key activities where big changes are going to mean major improvements, better value and greater security.

    First, there is email. SSC is taking 63 legacy systems from all across government and replacing them with one secure, robust, modern system. As you may have heard, there have been delays in how the rollout has progressed.

    SSC continues to work with our suppliers to address the challenges and deliver a consolidated email solution for the Government of Canada. We are taking the time to do things right and ensuring that the system will be secure.

    The second activity involves data centres. Two enterprise data centres are now up and running. At the same time, we have closed 18 legacy data centres. Once we're done our transformation, our footprint will shrink from 485 to 7 enterprise data centres. Enterprise data centres will be secure and modern so they can provide the Government of Canada with the technology it needs to be effective in the era of big data.

    Third is cutting the cord on 20th century phones. As part of the Government of Canada's economic action plan, SSC launched the cost-effective telephone services initiative. To date over 37,000 land lines have been removed in favour of voice-over IP and cellular services with the objective of generating over $28 million in annual savings beginning in 2015.

    SSC is also upgrading video conferencing systems to offer efficient remote meeting alternatives and to provide alternatives to travel.

    Fourth is user devices. Another way SSC is cutting costs is by consolidating and standardizing the procurement of workplace technology devices. Budget 2013 announced this consolidation and standardization. Workplace technology device software includes operating systems software and basic desktop applications such as word processing software. The government spends about $660 million a year in this area. SSC is negotiating new contracts and now buys these essential tools in bulk, saving $2.1 million last fiscal year and $8.7 million this year.

    As you can see, this work is a major undertaking. SSC is taking every action to deliver efficiently and to ensure that the work done today can be sustained in future. Right now, we maintain 24/7 IT service delivery to 43 federal partner organizations. That includes maintaining 2,100 different mission-critical systems for the Government of Canada.

    SSC is responding to issues quickly and efficiently, even as we grow and take on more responsibilities. For example, problem reports closed over the last year consistently kept pace with new ones. That's meaningful because this was occurring as we were taking on so many new tasks. In cases where there's been a service disruption, 75 were the result of an SSC planned change. The balance was the result of a partner planned change.

    SSC also strives to create a secure, centralized communications infrastructure that directly supports Canada's cyber security strategy. We work closely with the Communications Security Establishment and other partners to maintain supply chain integrity through coordinated response to issues such as Heartbleed, the incident at the National Research Council and, more recently, Bash.

    With these considerations in mind, let me turn to the details of SSC budgetary matters for the 2014-15 fiscal year.

    Supplementary estimates (B) for SSC represent an increase of $58.6 million in SSC's reference levels. That increase is attributed to $18.1 million in new funding and $40.5 million in net transfers, broken down as $38.6 million in net adjustments required from partner departments in support of SSC's mandate, and $1.9 million for various projects and initiatives.

    The new funding of $18.1 million consists of $10.8 million to provide IT infrastructure for the 2016 census of population program with Statistics Canada, $5.1 million as part of the revitalization of Canada's weather services with Environment Canada, $1.8 million for activities to support the CRA implementation of programs identified in the budget implementation acts of 2013 and 2014, and $400,000 for a new express entry solution with Citizenship and Immigration Canada.

    The $40.5 million in net transfers from partner organizations includes items such as transfers to support IT positions and missions abroad, and adjustments as a result of the creation of Shared Services Canada.

    Thank you, Mr. Chair.

    My colleagues and I would be pleased to answer your questions.

    Thanks to both of you for your presentations.

    The members will now ask their questions.

    Ms. Day will start us off. She will have five minutes.

    Thank you, Mr. Chair.

    Welcome to the committee. You're a good-sized group, so I hope you will be able to answer our questions as they will be fairly detailed.

    For 2014-15, PWGSC has requested authorities of $1.16 billion in relation to capital expenditures, including the amounts requested through supplementary estimates (B) for 2014-15. According to PWGSC's departmental performance report for 2013-14, the actual spending for 2013-14 in relation to the parliamentary precinct was $364.6 million, compared with planned spending of $320.6 million.

    Can you tell us which parliamentary precinct projects are considered high priority?

    Thank you for your question.

    I'm going to ask Ms. Chahwan to answer that.

    Thank you very much for your question, Ms. Day.

    The projects stemming from the long-term vision and plan are moving along quite well. We are even further ahead than planned at the beginning of the year. That is why actual spending for 2013-14 was $364 million.

    As for the projects considered high priority, I would say they are all high priority. The government approved the long-term vision and plan precisely so that our heritage buildings on Parliament Hill could be restored and upgraded quickly.

    Of course, we strive to complete the most pressing work, that which addresses health and safety concerns, first. To that end, a re-capitalization program is also in place to fund projects in the immediate term.

     I have a more specific question.

    In 2012, a piece of stained-glass window fell on MPs' desks. The incident posed a serious risk to MPs, visitors and reporters.

    According to an internal PWGSC report, water damage has loosened the glass in all the stained-glass windows, and will likely cause the glass to become dislodged from the frames. Architectural firm Watson MacEwen Teramura was commissioned to inspect the Parliament buildings and estimated that the necessary repair work would cost $5 million.

    Is that project one of your priorities?

    Thank you for your question. It gives me a chance to address the matter.

    The report in question was commissioned by the Department of Public Works and Government Services precisely to determine the most pressing issues. The report focused on six areas and revealed that two elements required more immediate attention, one being the stained-glass windows. The repair work is under way, and three windows have already been fixed. A plan is in place to complete the work on the remaining windows.

    The same is true of any other area identified as needing more immediate attention. I can assure you that the buildings and grounds of Parliament Hill are entirely safe for both visitors and those who work there.

    What measures have been taken to ensure the safety of visitors, reporters and parliamentarians in locations where the stained-glass windows have not yet been repaired?

    The report you referred to mentioned the stained-glass windows in the Centre Block, where the House of Commons is located. Three of the windows have been removed for conservation purposes, in advance of the Centre Block overhaul set to begin in a few years. The windows have been replaced with very securely installed replicas.

    In the interim, we have put up safety nets below the other windows. As we conduct installation safety tests, we will remove those nets.

     In September 2013, when we toured the building currently being restored, all the asbestos had been removed and only the walls remained. We were given assurance that the deadlines and cost estimates would be respected and that the work was under way.

    What is the reason for the cost overrun today?

    Ms. Day, when you say cost overrun, what are you referring to exactly?

    I am referring to the building being restored as we speak.

    The restoration of the West Block is on budget and on schedule. The project is progressing nicely.

    If you take a look at the figures you mentioned a moment ago, you will notice that we spent $44 million more than planned last year. But that was not a cost overrun. It was simply a matter of the investments being made faster than planned at the beginning of the year.

    The explanation to your question regarding the West Block is this. At the beginning of 2013-14, we expected 30% of the work to be completed. By the end of the year, however, 34% of the work had been completed. So the cost did not go up; the work simply progressed more quickly than expected.

    Thank you, Ms. Day.

    We will now move on to Mr. Trottier for five minutes.

    Thank you, Mr. Chair.

    Thank you for coming this morning to discuss supplementary estimates (B). It's a large portfolio, and it's fairly complicated.

     Mr. Lakroni, you talked about the accommodation inventory in your remarks. Canadians might be surprised that the Government of Canada runs accommodation. Could you explain what the accommodation inventory is, please?

     For that I will turn to Mr. Mongeau, the ADM of real property.

     Thank you.

    Mr. Chair, in English, we use the word "accommodations". That is part of our mandate. When it comes to real property, PWGSC's mandate spans a number of regions.

    We deal with fit-ups and leases, so everything that makes it possible to provide thousands of public servants with a place to work every day. In fact, we provide 272,000 public servants with work environments. Our portfolio includes nearly 7 million square metres of space used for various purposes.

    The biggest part of our real property mandate is providing office space to most government employees. This office space can be property that we lease or property that we have bought and own.

    Thank you.

    When I heard the word "accommodations", I thought it referred to housing. Now I understand it refers to office space.

    I notice also in the departmental performance report an increase in the cost per square metre. It's higher than expected, I suppose, as I note that, on page 31 of the report, the actual came in at $332 per square metre when the target had been about $323 per square metre for office space.

    Now, I understand there are many locations across Canada. Could you describe what's happening with office space across the country? Is there inflation with regard to office space? What's going on with office space that you're not able to hit those targets?

    Thank you for the question.

    The performance indicators we use tell us where we stand vis-à-vis the market and the situation in the private sector. They are based on previous year trends, as well as on the leases that we sign, including those signed in the past few years.

    We also work with companies, allowing us to prepare forecasts of the real property portfolios of various companies. That enables us to determine pricing. As for the target of $323 per square metre, after looking at last year's results, we realized that we were actually at $332. In other words, we ran slightly over the target.

    What factors contribute to such an increase? The markets, first of all. As Mr. Trottier mentioned, markets are up in some regions and down in others. In Toronto, Vancouver and Calgary, prices tend to rise more quickly. Our year look-ahead projections are not always an accurate reflection of the reality a year or a year and a half down the line, come budget time. So lease prices can be much more expensive in certain cities, and fit-up costs can be higher than anticipated, depending on the market. So that is how we can end up with such figures.

    I should point out, however, that the $8 or $9 difference per square metre is not huge. It means that we came reasonably close to our target. What we will keep trying to do in the coming years is improve results through our negotiating. Bear in mind that our goal is full occupancy of our buildings. The vacancy rate hovers between 2.5% and 3% every year. So we perform very well when it comes to occupancy, but in some big cities, our performance is tied to the market. That is the reason that we ran slightly over our target. Be that as it may, we are already considering strategies to bring down our actual results. But I would just like to reiterate that $8 is not a huge difference.

    Thank you.

    Thank you, Mr. Trottier. Your time is up.

    It is now over to Mr. Martin for five minutes.

    Welcome to our witnesses.

    I need to begin by saying, though, that as much as we appreciate and we benefit from the expertise around the table, and we don't question that we have the right people to answer very technical questions about the supplementary estimates, what's lacking here is the minister coming to speak to the supplementary estimates. I agree with the parliamentary secretary that it's a huge portfolio and I think he said it's very complicated, and it is. But the irony is that the only person who can actually grill the minister on this complicated portfolio is the parliamentary secretary, and he doesn't need to ask any questions of the advisers here today because he can talk to the minister any time he wants. We can't. I note the Minister of Health went before her standing committee to speak to her supplementary estimates. Minister Kenny went before human resources. Minister Rickford went before natural resources. Minister Glover went before Canadian heritage. Minister Valcourt went before the aboriginal affairs committee. Yet we don't have our minister to ask these complicated questions.

     Every one of these people around the table can answer technical questions about the veracity of the documents that were delivered to us in the supplementary estimates and the departmental performance reports, but none of them can answer the questions about the big picture, about what the government is doing, why they're doing it, what they're seeking to achieve, and whether it could be done better. They aren't allowed to answer questions like that, so we're handicapped here. We're shackled. We're actually hobbled as a parliamentary committee because the minister doesn't have enough respect for our parliamentary committee to attend to ask for these hundreds of millions of dollars of spending in the supplementary estimates.

     I have to voice my profound displeasure on behalf of the official opposition that our committee is being treated in this way. I say this with no disrespect to our witnesses, many of whom I know well, and I appreciate the technical expertise around the table, but it's the minister who should be here to defend his supplementary estimates. In the future, we hope that will be the case.

    Perhaps because we have this bizarre situation of a parliamentary secretary leading the questioning on behalf of the Conservative members, you could convey that to the minister on our behalf, or perhaps the PMO's representative in the room could do that for us.

    My question, if I have any time left, is very specific.

    A voice: No.

    Mr. Pat Martin: Am I out of time? I think I trust our clerk more than I trust my colleagues.

    You have two minutes and a half.

    Specifically, the defence procurement strategy.... First, let me say how much I appreciate getting the performance reports at the same time as the estimates. This was one of the recommendations made by the comprehensive study that this committee did on our treatment and study of the estimates. It's very helpful for us in following the dollars to be able to see the performance report. The performance report states that a new defence procurement strategy “represents the most fundamental shift in federal procurement in thirty years”, etc. They've put together an independent arm's-length Defence Analytics Institute. This is news to me, frankly, so I guess my question is, how much funding is allocated to the defence procurement strategy in 2013-14? Given the high-profile and controversial nature of the military procurement going on, how was this funding part of the overall defence procurement strategy?

    Who would want to handle that?

    Thank you, Mr. Chair, for the question.

    Indeed, as you outlined, the defence procurement strategy was announced in February 2014. Its three primary objectives are: delivering the right equipment to the Canadian Armed Forces and the Canadian coast guard; leveraging purchases of defence equipment to create jobs and economic growth in Canada; and streamlining the defence procurement process.

    The defence procurement strategy itself represents, as you outlined, a new whole-of-government approach aimed at ensuring the timely delivery of equipment to our armed forces. The strategy itself is funded within existing departmental reference levels, so the various departments that are involved in delivering the strategy—of course the Department of National Defence, Industry Canada, Public Works and Government Services Canada, the Department of Foreign Affairs, and the Department of Fisheries and Oceans, the coast guard—are all leveraging existing reference levels.

    An interim Defence Procurement Secretariat has been put in place at PWGSC, with a planned staffing complement of some 20 resources for this fiscal year. Again, this secretariat is funded currently through existing reference levels in the department.

    Going forward, specific elements of the strategy, for example, the Defence Analytics Institute which you referred to, Mr. Martin, may require funding, and the resource requirements in the funding model for that institute will be determined once the government has made a decision on the mandate and structure of that institute.

    You are out of time. Thank you.

    Mr. Butt now has five minutes.

    Good morning, ladies and gentlemen. Thank you for joining us today.

    At the outset, I just want to remind committee that the motion that was agreed to by all members was that the minister and/or officials appear on the supplementary estimates (B).

    An hon. member: Point of order.

     One moment please, Mr. Butt.

    On a point of order, Chair, what happens behind closed doors in our in camera planning sessions is not to be released publicly, and also, it is wildly inaccurate. If we are going to spill out what we talked about at in camera meetings, we could at least be accurate, that we fought aggressively for the motion to say “the minister”, not “and/or” anybody he or she chooses to send.

    For God's sake, get your story straight. If you're going to break committee confidence, you should be hauled up before the bar in front of the Speaker and condemned for it, but at least have the decency to be accurate.

    I'm going to stop you there. It is not—

    You're compounding the insult to this committee. First, the minister is not here, and now you're making up stories about what happened during in camera meetings, and we can't defend ourselves.

    I'm going to stop you there. It is not—

    It's an outrage.

    He is referring to the outcome of the in camera meeting, not the discussion that the committee had. The invitation was indeed—

    He said all committee members agreed that it should be “and/or the minister”.

    Let me finish. He is referring to the outcome of our meeting, not the discussion we had.

    Is there another point of order?

    That's an absolute fabrication.

    Let me finish.

    Are you proposing that we move in camera?

    On a point of order, I'm not finished this point of order. Maybe we should go in camera and discuss with Mr. Butt what the rules are. Maybe we could get a briefing on the policy and rules about in camera confidentiality at committee hearings.

    Are you moving that we go in camera?

    Yes, I move that the committee go in camera to discuss this further.

     I heard your point of order, but you can't propose a motion on a point of order, as you know, Mr. Martin.

    Mr. Butt, please continue.

    Thank you very much, Mr. Chair.

     I'll continue with my questioning, which is really why we're here today. This is our role, as parliamentarians, to have the officials in and to go over the supplementary estimates to make sure that we understand exactly how taxpayers' money is being spent, so instead of filibustering my time, I will actually do my role as a parliamentarian, which is to ask these questions and not filibuster during my five minutes.

    I'd like to ask Shared Services Canada to give me some more detail—

    Point of order, Mr. Chair.

    Mr. Butt, I must stop you there.

    We have a point of order.

    Mr. Butt must address the chair and witnesses, not the committee members.

     Thank you, Ms. Day.

    I usually allow questions to be put directly to the witness, unless the discussion becomes too heated or disrespectful, in which case I ask the member to address the witness through me. I have always been a bit flexible in that regard.

    So I will allow Mr. Butt to continue.

    Shared Services Canada, you detailed the $18.1 million of new funding and you've broken it down into four different categories. I'd just like a little more information on each of them, and that will probably fill my five minutes.

    On the $10.8 million for Statistics Canada, $5.1 million for weather services, $1.8 million for CRA, and the $400,000 for the new express entry initiative, can you give me a little more detail on each of those, and what specifically those items are?

    Yes, thank you very much for the question, Mr. Chair.

    The first you asked about is the census of population 2016. That, of course, is Statistics Canada's largest statistical program. It collects data to permit recalibration of population estimates and to provide information on socio-economic characteristics. The role of Shared Services Canada in that will be to ensure that the IT infrastructure and telecommunication services required to support the census are delivered in accordance with Statistics Canada requirements. As well, Shared Services Canada will support the agency's e-mail data centre, networks, and telecommunications infrastructure in that regard.

    Moving on, there is the $5.1 million for the revitalization of Canada's weather services. This is to renew their supercomputing solution at Environment Canada, to provide supercomputing capacity for the weather services. Again, the role of Shared Services Canada is to be responsible for the procurement process for that next generation of supercomputing infrastructure.

    The next one is related to the enhancements to the non-compliance audit program and the CRA funding, I believe, which is to offset our costs of providing core information technology services in relation to those initiatives.

    Similarly, on the budget implementation bill, it is to provide the information technology infrastructure and telephony activities in support for measures that were in those budget implementation acts.

    Thank you.

    You have 30 seconds left if you'd like to ask another question.

    I would remind everyone that point of order discussions are not deducted from committee members' time.

    Mr. Byrne, you may go ahead for five minutes.

     Mr. Chair, thanks very much.

    Departments have a mandate to try and consolidate digital communications and electronic communications between departments. I understand there are 42 client departments and agencies. What is the anticipated timeframe to accomplish getting all 42 departments and agencies under one umbrella within this initiative?

    Thank you very much for the question. I'll ask my colleague, Mr. Bruce, to respond.

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

    The plan for all of our transformation program is from now until 2020, so it is a long-term plan to consolidate. You asked most specifically about networks.

    Mr. Bruce, you've answered my question. It's approximately six years out before we complete that. Would this transformation, the consolidation, moderately improve security of the federal government systems, significantly improve the security of the Government of Canada systems, or how would you describe it?

    Thank you again for that question, Mr. Chair.

     Actually, this will significantly improve the security posture of the Government of Canada. I'd like to talk about two aspects of that. One, managing a diverse set of over 50 silo networks currently provides a lot of access points that would have to be monitored and additional vulnerability, so being able to manage one network that gives us that capacity to secure the perimeter and better monitor the traffic in that environment.

    The second piece of that I'd like to talk about is that we have actually been improving the cybersecurity profile of the Government of Canada, so we have essentially created a cyber operation centre with the capacity to prevent, detect, respond, and recover from cyber incidents.

    Thank you, Mr. Bruce.

    Is the current environment of cybersecurity a dangerous one? Would you categorize it as that?

    Absolutely.

    May I ask, Mr. Chair, why we're taking six years to do this? If the security environment is very serious, if it's very significant that we have identified issues and problems, that a solution would be to consolidate security systems' digital communications within the Government of Canada, given the fact that we have a whole host and range of new threats emerging all the time, my question for the witness is, why take six years to do this when Canadians' privacy and interests are very vulnerable?

    Thank you again for the question, Mr. Chair.

     Six years is for the full transformation. Obviously, there will be benefits that won't be realized until the end of the transformation process, but establishment of our security operation centre was an absolute priority. We went from having a capacity to monitor a couple of departments 24/7 and some not at all, to the capacity to monitor all 43 partners—the 43rd partner is Shared Services Canada—24 hours a day, 7 days a week, 365 days a year. We are taking this seriously and we're actually accelerating that aspect of the transformation plan.

    Mr. Bruce, nobody here has any doubt about that whatsoever, that you're taking it seriously. What I am concerned about, however, is that if a threat is serious and significant and we have a solution in mind, is it a budgetary issue? Why is there a six-year delay in completing this? There's nobody here doubting whatsoever that progress has been made, but the question I pose to you and to the department is, why six years? Is it a budgetary issue? Is it an issue of will? What is it?

    The transformation plan that has been created as part of the way Shared Services Canada was created and is executing, is essentially a self-funded transformation plan. Essentially, the appropriations were transferred from all 43 partners through Shared Services Canada. There was a consolidation dividend. There was a standardization dividend, and we're using that funding essentially to re-engineer the networks, the data centres, the cybersecurity, and the e-mail systems of the Government of Canada. In that process we are doing as much as we can early to improve security. Obviously, there's always a possibility to do more with more money, but that's the structure that Shared Services Canada is going to work with.

     Given that the Government of Canada has lapsed security funding, significant amounts of security funding, what you've indicated to the committee is that if you had additional resources you may be able to speed this process up. Would you be able to outline for the committee any particular plans or requests you've made for additional resources to be able to speed this up that you have not been allocated?

    Thank you again for the question, Mr. Chair.

    I can't provide any details of specific requests that we've made around additional security, obviously. We do look at analytics on what is going on and can provide recommendations and advice. So far, we are working within our allocated finances.

    It's a question left to the minister, isn't it, Mr. Bruce?

    I have to cut you off there. It is Mr. O'Connor's turn. He has five minutes.

    Mr. Lakroni, I have a question about the estimates before I go on to other things.

     In your experience how does a minister get involved with estimates, at what stages, or do they attend all estimates? What's the typical actions of a minister with respect to estimates?

    It depends, Mr. Chair, on the minister. The tendency is that the minister attends the main estimates with the deputy, but it depends on the minister. Some ministers attend other appearances such as supplementary estimates, but usually it's the main estimates.

    Thank you.

    I think I have a question in for property. What's the current situation with respect to DND's acquisition of property in Nepean? Where is it? I started it seven years ago and I'm still waiting to see somebody walk through the door.

    Are you referring to the Carling campus, in Nepean?

    Yes.

    Thank you for the question.

    We bought the campus nearly three years ago. The price was extremely low, so it was an excellent deal. We were also able to save money with the acquisition of the campus. Employees covered by 40 or so leases in and around Ottawa are going to be consolidated in that space. Over a 25-year period, we will save $750 million, which is very significant. The work to fit up the offices is currently under way so the Department of National Defence can move in.

    The move will happen in three phases. The first wave of employees to move in will begin officially in December 2015 and continue through June 2016. Between 3,000 and 3,500 people will move into the campus. So the first phase of the move will begin at the end of 2015.

    The second phase will start a year and a half later, with another 3,000 people moving to the campus. The third phase will happen in 2019, at which point, 8,500 people will be at the campus.

    The fit-up work is happening as we speak and is on schedule. You will start to see more cars in the parking lot beginning in December 2015, with the first wave of employees moving in.

    My next question is on the same area. You have leased buildings and you have owned buildings. How do you determine whether you're going to buy a building, or lease a building, and the shares, etc.? What are the calculations that you do?

     Thank you for the question. That is the fundamental question we ask ourselves every time we are called upon to meet the accommodation needs of other departments.

    We already have a portfolio of about 350 buildings across the entire country, buildings owned by PWGSC. Any time the government approves a department's need for new accommodations, our first recourse is always to try to find space in our existing portfolio.

    We proceed by doing an investment analysis. We take the accommodation requirements given to us and do an investment analysis to determine what the best solution would be over a 25-year period. We may end up using a building we have and renovating it. We may also end up simply taking out a lease. The rates can be much higher in some regions than in others, a factor our investment analysis takes into account. We also consider possible market fluctuations, as I've just mentioned.

    We may also decide to undertake a construction project, which can take various forms. In Surrey, British Columbia, for instance, we entered into a P3. In that case, the developer is responsible for the building's construction and maintenance, and after a certain number of years, we take back the building. That solution allows us to spread out our capital and operating expenditures over a longer period.

    We use the investment analysis to find the best possible solution, given the location and environment. That gives us an average. About 55% of our buildings are leased and 45% are owned. We always base the decision on an investment analysis that takes into account the accommodation requirements and, especially, the local markets. That is how we identify a solution.

    Thank you.

    Thank you, Mr. O'Connor.

    It is now over to Ms. Day for five minutes.

     Thank you, Mr. Chair.

    Ms. Chahwan, earlier, you said that the cost overrun was due to the work being carried out more quickly.

    Did I understand you correctly?

     If I may, Mr. Chair, I would just like to reiterate that we did not overspend; we simply spent approved budget amounts more quickly.

    Fine.

     I will ask my next question.

    On page 23 of your 2013-14 departmental performance report, the third-last paragraph begins with the following sentence: “A system to track schedule variance for a large number of complex projects from a central database is not currently in place within the Acquisitions Program."

    Could you kindly explain that?

    Are you on page 23, Ms. Day?

     I'm going to reword my question because that paragraph has to do with defence.

    Can you tell me whether you have a system to track schedule variances?

    Absolutely. Thank you for the question.

    When PWGSC appears before the committee and says that a project is still on time, on scope and on budget, it is not simply a claim our engineers and architects make; it is a statement that has been verified by a third party, a private firm that measures the performance indicators of the project. We have comprehensive systems to thoroughly track budget and schedule compliance, based on progress at key project stages. Not only do we track that information for every project, but we also do it for the entire portfolio. In fact, after reviewing our processes, the Auditor General confirmed that our systems were very robust.

    Thank you.

    My next question has to do with performance.

    Shared Services Canada's departmental performance report for 2013-14 indicates that the organization had 6,006 full-time equivalent, or FTE, employees in 2013-14 and that the planned number of FTEs was 6,450, a variance of 444 FTE employees. The report also states that "[t]he 2014-15 planned reduction is 50 FTEs".

    But one of the key risks identified in the risk analysis on page 15 of the report is that "the Department will not have the right people with the proper skills to deliver on its mandate."

    Is there a conflict between, on the one hand, identifying as a key risk not having the right people to deliver the department's mandate and, on the other hand, having less staff than the planned number of FTEs with plans to further reduce FTEs?

    I'm not sure who would like to answer that question.

    Ms. Tromp, would you care to respond?

     Thank you very much for the question.

     Those numbers are consistent with Shared Services Canada's departmental performance report, so I'm happy to answer the question. Yes, we have planned numbers in excess of what the actual number of our FTE complement is currently. That gap is in part due to the reconciliation we continue to do due to the creation of Shared Services Canada.

     When we were created, we were given positions, salary dollars, and often empty or vacant salary positions. We have chosen in many cases not to staff up, because if you look ahead to the next year, for example, at our planned numbers, they go down by 300. What we are really trying to do is manage within the envelope we have. We are putting the focus on making sure that we can minimize impacts on our indeterminate employees, and we are moving right away to a lean model of operating—

    Sorry for interrupting, but the report clearly says that the department will not have the right people with the proper skills to deliver on its mandate.

    I appreciate that you would like to do more with less, but there is a problem.

    We have identified that one of our biggest challenges with the very complex agenda we have, and the transformation, is that we need to make sure we have the right people in the right place at the right time, so we are transforming how we do business and how we are doing our work, and with that, some of the skill sets we're going to need. We won't need some skill sets, but we're going to need people in other areas.

     We have a workforce management strategy that the organization is very committed to. It is very much about ensuring that we are able to mitigate that risk and to make sure that we are, through strong HR planning, for example, understanding where we have needs and then looking at initiatives around re-skilling and mobilizing and moving our staff, giving them opportunities to align their career with those new opportunities, to be able to mitigate that risk and ensure as much as possible that our employees are able to fill those roles.

    Thank you. You are out of time.

    Mr. Adler, you have five minutes. Please go ahead.

     I have a number of questions.

     I want to begin with you, Ms. Caloren, regarding the build in Canada innovation program. I'm wondering if you could tell the committee a bit about the kinds of projects that have been funded under the build in Canada innovation program.

     Thank you for the question, Mr. Chair.

    I'll give you a bit of background before I tell you about some examples of success under this program.

    The program, build in Canada innovation, BCIP, was launched to bolster innovation and promote economic growth. It provides Canadian innovators with the opportunity to sell to the federal government their pre-commercial goods and services through a competitive procurement process. As of November, so as of today, 156 innovations have been pre-qualified and a total of 80 contracts have been awarded to 74 different companies to support the testing of these innovations over the life of this program. BCIP supports Canadian businesses by procuring and testing their late-stage innovative projects, products, and services with the federal government before taking them to market.

    There are two components to the program, a standard component and a military component. The priority areas in the standard component cover environment, safety and security, health, and enabling technologies. Some of the examples I will give you in a moment cover those areas. The military component covers Arctic and marine security, protecting the soldier, command and support in cybersecurity areas, training, and in-service support. To date, 21 federal departments have participated in testing these innovations.

    I'll turn now to some successful examples. The first example I'd like to cite is called the Aeryon Scout. It's a remotely operated aerial vehicle that was tested by the Department of National Defence. It enables the business to open new markets for their technology, with recent sales to the U.S. military, the South Korean army, and several Middle Eastern countries.

    Another example I'd like to cite is called the speed bump radiation detector, by Bubble Technology Industries. It is a detector concealed inside speed bumps to sense the presence of illicit radioactive materials. The company has had three innovations pre-qualified under this program. It has sold their innovations to numerous law enforcement agencies south of the border and also has a number of solid business opportunities with international defence and law enforcement agencies.

    There are many examples. As I said, we've given out 80 contracts so far under this program.

    The last example is called the CargoKeeper, made by TekTrap company. It's an easy-to-install miniature covert electronic device combining GPS and door lock tracking with wireless and satellite. It remotely tracks the status and position of maritime containers worldwide. It's been tested by three separate departments. It has both military and civilian applications. It can be used by customs officials to increase security and efficiency of customs operations as well as by the Canadian military to track sensitive cargo. The participation of TekTrap in the build in Canada innovation program has opened up several new opportunities for this company in both security and non-security-based markets domestically and internationally. As a result of having their technology sold and used by the Canadian government, they now have a contract with U.S. Customs to apply to their security needs. They've also sold their innovation to U.S. law enforcement agencies.

    Those are a few examples of successes under this program.

    Thank you very much.

    The program seems to have met with a great deal of success. For constituents who live in York Centre, business leaders or business people, how could they take advantage of the program? What steps do they need to undertake?

    As I outlined earlier, Mr. Chair, this is a competitive procurement program, so we call for proposals every year. The fifth call for proposals was launched just recently, in June 2014, and closed in September. We received 221 proposals, and they are currently under evaluation. We will regularly have calls for proposals, and any company in Canada, including companies that have already submitted innovations under this program, can submit proposals under this program. They will be rigorously, transparently, openly, and fairly evaluated. If they are pre-qualified, they will have access to potential contracts with federal government departments to test their innovations.

    The Department of Public Works and Government Services has a network of small and medium-sized enterprise support offices across the country. Part of the services we offer are information sessions for small and medium-sized enterprises on how to access this program and all the other procurement programs we have in PWGSC.

    Thank you.

    I have to stop you there to give Mr. Martin his turn. He has five minutes.

     Well, thank you, Mr. Chair.

    I want to begin by pointing out to anybody who might be interested just how far we've come, or just how far we've dropped the notion in the 41st Parliament of ministerial accountability. I don't want anybody—any rookie MPs, or anybody watching—to think that this is normal, that we now have parliamentary committees, even major oversight parliamentary committees such as the Standing Committee on Government Operations and Estimates, dominated and ruled by parliamentary secretaries, agents of cabinet and the PMO, the Prime Minister's Office, sitting here in the room dictating what witnesses we hear, and whether or not the minister will or will not appear before a parliamentary committee. This is not normal by any stretch of the imagination. It's unprecedented.

    Somebody has to start sounding the alarm that incrementally the notion of scrutiny and oversight and accountability has been eroded to the point where it's unrecognizable to those of us who have been around for a little while.

    Gerry's a veteran. I remember when parliamentary secretaries first started to be allowed on to committees. They sat at the very end and they kept their mouths shut. They didn't dictate what went on behind closed doors.

    I apologize, Mr. Martin, but I must interrupt you.

    Do you have a point of order, Mr. O'Connor?

    Yes. I think Mr. Martin's discussion about the theories of ministers, etc., and the status of Parliament is more for an in camera session. It has nothing to do with these people who are here to answer questions about estimates, and I recommend that he get back on his topic.

    Thank you for the point of order.

    Is your point of order the same, Mr. Byrne?

    Yes, it is.

    Mr. Chair, we've had a number of points of order which generally evolve into points of order based on relevancy. It's incumbent upon the mover to actually state specifically their specific point of order when they raise the point of order. That's what separates debate from the standing orders and the generally accepted conventions of what a point of order is.

    Now, you have ruled just recently. The point of order of relevancy was taken into consideration and you ruled in the affirmative towards the raiser.

    Mr. Martin right now is speaking about the supplementary estimates and the role of the minister to participate in the supplementary estimates. This is relevant. While I accept and agree that you have great latitude in the execution of your duties as chair, we cannot engage in these constant points of order if the mover does not state specifically what the point of order is at the very beginning of their intervention, and then if you allow, that they make the case. I accept that there have been points of order that have been moved just recently in committee which were not relevant, and I also agree that there were points of order that were raised just yesterday that were relevant on the issue of relevancy, specifically.

     Mr. Chair, please exercise discretion in your duties in making sure that those who raise points of order clearly state up front what the point of order is specifically, and if you allow them an opportunity to make that case, expect them to do so quickly.

    Thank you for clarifying that.

    Mr. Martin, this is not a debate, but a point of order.

    I certainly cannot guess the point of order. For my own information, I would like the member to start by telling me the nature of the point of order and to then explain it. Committee members are perfectly within their right to raise a point of order. If the point of order is in fact not one, I will say so and move on.

    The point of order in this case had to do with the relevance of the member's comments to the agenda topic. Mr. Martin had five minutes to discuss supplementary estimates (B) and the practices governing ministerial accountability to the committee with respect to supplementary estimates. He can use his five minutes as he chooses, provided that his comments are relevant to the agenda topic. And that seems to be the case. If he chooses not to ask any questions during his five minutes, that is his right. I can't force him to ask questions if his comments are relevant to the topic on the agenda.

    Everything he has said in the 2 minutes and 47 seconds he's had so far is relevant to the topic in hand. So I will let him continue for the remainder of his time.

    Mr. Martin, you have two-and-a-half minutes left.

     Okay, well thank you, Mr. Chair.

    I think it is, and I would have debated in the same point of order the point I would make, which is that I can't imagine anything more relevant for the Standing Committee on Government Operations and Estimates to discuss and to reflect on than our obligation to make a thorough and robust examination of the estimates, be they the supplementary or the main estimates, as per the recommendations of the report from this very committee which was tabled last year, and of which 15 out of 17 recommendations the government agreed upon, including the ability of the committee to call the witnesses necessary, including the minister.

    We have hundreds of millions of dollars flying by this committee with a cursory examination and no comment from the government. This is what I mean about ministerial accountability. The minister has to come before Parliament to ask permission to spend money just as the Auditor General appears before the public accounts committee to examine how that money was spent. The minister has to come before that spending takes place to get our permission. That is a very fundamental cornerstone of our parliamentary democracy and it's being flagrantly dismissed as an inconvenience by this government. For a member here to try to say that it was unanimous that we all agreed that it was okay for only officials to appear to explain hundreds of millions of dollars' worth of spending is an absolute falsehood. I won't use the word “lie” but it's a misrepresentation of what took place. We insisted—we demanded—and we fought tooth and nail to get the minister here.

    I have to stop you there, because we have a point of order. I hope it is, in fact, one.

    I'd like to remind my honourable colleague that he really shouldn't be discussing the proceedings of what happened during an in camera meeting. That would be a violation of the rules of the committee. I will mention there is that breaking of a confidence of a discussion that might have happened in an in camera meeting, but there's the outcome of the meeting which we can certainly discuss, and the outcome of the meeting was that the members agreed to invite officials to discuss the supplementary estimates (B).

    Thank you, Mr. Trottier.

    The rules governing our ability to discuss what was said during an in camera meeting are indeed quite clear. The line was almost crossed twice. I am fully aware of the rules and will do everything in my power to ensure they are not broken. I don't think the member crossed the line in this case; he is simply close to it.

    In any case, your time is up, Mr. Martin.

    I will now turn the floor over to Mr. Maguire for five minutes.

    Thank you, Mr. Chair.

    I just noted in your comments, Ms. Tromp, that we were looking at the Shared Services Canada planning and managing the IT infrastructure of the government with a view to creating savings and efficiencies and eliminating duplication, and I appreciate that. Could you elaborate on some of the areas where they are eliminating duplication?

    Thank you very much for the question, Mr. Chair, and I'm going to ask Peter Bruce to talk to you about some of those transformation issues.

    Thank you very much for the question.

    Mr. Chair, we have essentially been given the mandate initially in three areas, e-mail, data centres and telecommunications, and then subsequently in the workplace technologies or the end-user device space. Some of the savings and economies that we've realized are in all three of those areas.

    I'll start with telecommunications. Certainly, by consolidating the acquisition of telecommunications services for the Government of Canada we achieved a scale that got us discounts that were beyond what any individual department could achieve previously and that resulted in some savings. We've also taken an initiative to remove unused lines. When we had this big picture of what was being done across all of government, we actually found that there had been telephone lines, legacy centrex services, that had been in place for a long time. People had been provided with a mobile telephone device and the centrex lines were no longer in use or no longer needed. We're trying to move more and more public servants, wherever possible and wherever it makes sense, to a single device. It can be one of these or a land line depending on which one is needed, but we anticipate about $28 million a year in savings just in that one specific measure.

    On the consolidation of data centres, we've been able to close 10 data centres already. We're on track to close about 50 legacy data centres this year. By establishing three new enterprise data centres, which are all ready now to start taking the application workload of the Government of Canada, we are able to shift workload out of legacy data centres that were running old equipment in an old space that was already deteriorating and that were not as reliable nor as efficient in its operation. We're also getting economies there.

     Thank you.

    Mr. Mongeau, I believe you said, in response to one of the questions just asked, that we have a 55% rental of buildings as opposed to 45%. Could you explain that to me?

    Yes. Thank you.

    The figures are approximate. We always try to maintain a balance between what we lease and what we own. Being the owner gives us considerable flexibility. That flexibility increases when we use the private sector for our various rentals and leases all over the country. We make every effort to maintain that balance.

    We also make every effort to maintain a balance between the number of employees we have working in Ottawa, on the one hand, and in Gatineau, on the other. That is another percentage we keep an eye on. About 75% of the workforce is in Ottawa and 25% is in the Gatineau area. We are able to closely monitor where we stand financially and, above all, where our portfolio stands using a number of measures and performance indicators.

    The figure you mentioned, Mr. Maguire, varies slightly from year to year, but we always strive for the same proportion. And that also maximizes our flexibility when new programs are put in place or major moves need to be carried out.

    Thank you.

    Mr. Maguire, you have 15 seconds left if you'd like to ask a very quick question.

     I will now hand the floor over to Mr. Byrne for five minutes.

    Thank you, Mr. Chair.

    I'd like to follow up on the parliamentary precinct. That which is all around you is sometimes most noticeable, or least noticeable. I know that parliamentarians have been given very extensive briefings on this in the past, and we appreciate that information. However, perhaps you could provide the committee—just using some economy of language here, trying to keep this as basic as possible—with a refresher of when the parliamentary rehabilitation project first started, when it will end, how much it will cost, the average cost per year, and other details like that. I'd like to refresh my own memory.

    Mr. Chair, the long-term vison and plan, or LTVP as we know it today, was redefined in 2010 to allow for rolling programs of five years of work. I can say that since its inception, we have invested $1.4 billion in the rehabilitation of our parliamentary buildings.

    The government has approved another $1.6 billion for the continuation of the phases of work that have been approved. Those include mainly the West Block rehabilitation, the East Block work that has already started, the Sir John A. Macdonald Building south of Wellington, as well as the building at 180 Wellington. We have basically six major capital projects. Aside from those I just mentioned, I would add the Government Conference Centre, to be used as an interim accommodation space for the Senate while we rehabilitate Centre Block, and the visitor welcome centre.

    As for the end, it's really by project. This is a long-term vision, so we are doing very intricate sequencing of the work, including interim space, so that we can vacate the buildings we need to get to and rehabilitate them before the building systems become critical, in risk of critical failure.

    I can give you a few end dates. We are very happy to say that the Sir John A. Macdonald Building will be the next one to come online, in 2015. We expect to have finished the building at 180 Wellington, including 70 parliamentary office units and committee rooms in 2016. In 2017 we'll see the reopening of the West Block, including the interim chamber. In 2018 we will deliver on the Government Conference Centre rehabilitation.

     Going beyond the five-year increments, has there been any valuation or estimation? If you were to complete the entire project and have everything totally done, how many years would it take and what would be the cost?

    Mr. Chair, answering this would be speculation on my part at this point, the reason being that the complexity of the work means that we have a significant component of the activity that is a planning component, and that allows us to look at all the pieces of it. Going to five-year programs of work allows us to get more precision in terms of what the requirements are, the requirements of our parliamentary partners, and how we can best answer them.

    We are addressing the most urgent work. For example, Centre Block, the building we're in right now, is expected to be in critical risk of failure for the building systems in 2019, so everything we are doing right now and the sequencing of the work that is being completed gradually is to allow us to empty Centre Block before that date. The planning for Centre Block is under way, but I don't have any precision right now as to how much it would cost.

    It's the same thing for the East Block. We are going ahead with the most urgent work for the 1867 wing, but we know that there is more work that will be required for the building systems and for the interior walls. That will only happen after we finish the work on the Centre Block, because we have studies that show that the building systems can be sustained until 2030.

    Why would there be—

    You have just a few seconds left, Mr. Byrne.

    No, that's fine. Thank you very much, Mr. Chair.

    Mr. Hillyer, you have five minutes.

    You mentioned critical failure of building systems. What does that mean?

    I know those words are kind of scary, but they're really true. I can give you the example of what happened with the West Block. Two weeks after we vacated the West Block, there was a significant break of water pipes and there was significant flooding. That means that if the building had not been vacated for its rehabilitation, we would have had to shut down operations with no advance notice. That would have significantly hindered the operations of the government.

    The way we can estimate or qualify the risk of failure of the building systems is by having regular building condition reports. We hire third parties to come and assess the state of our systems. I'm talking electrical, mechanical, water pipes, everything. That infrastructure for the Centre Block is indeed at critical risk of failure as of 2019, but right now, with the activity sequencing and with the progress of the work on time and on budget, it means that we should be able to vacate Centre Block and move everybody into the interim spaces on time before we get to that critical date.

    You mentioned that the Senate was going to be moving to East Block. What's the timing for the House of Commons chamber? When is it going to be vacated? Where is it going to go?

    Thank you for that question.

    If I may, the Senate will be moving to the Government Conference Centre on Rideau and the interim chamber will be located in that building. As for the House of Commons, the interim chamber will be located in the West Block in the infill. We are currently excavating the infill and we are currently tendering for the roof structure that will cover that infill, and that will be the site of the interim House of Commons chamber.

    When do you expect that to happen?

    All the work for the West Block will be done in 2017. This is when we expect the interim chamber to be delivered to the House of Commons.

    Do you know where you're going to put 30 more seats in the current chamber?

    Yes. I'm sure you're happy with my answer. Yes, we do. We have been working very closely with the House of Commons, Mr. Chair. We have tested some mock-up desks to make sure that they fit. We are also working to make sure that the desks are connected electronically. We expect that everything will be in place before the fair representation act is in force.

    Okay. In the opening remarks we heard about accommodation requirements for crown-owned buildings and the accommodation portfolio, departments' existing fit-up budget, and about how the fit-up budget is ongoing and it replaces the annual requests for incremental in-year funding.

    What's a fit-up budget versus in-year funding?

    Thank you, Mr. Chair, for the question.

    PWGSC remains committed to providing cost-efficient accommodations to the public service. The current methodology was deemed to be a bit complex, not integrated. We had adjustments for price and volume. What you see in the supplementary estimates is an adjustment to the methodology to have it more integrated, to seek funding for the fit-up as well as for the repair and the recent adjustments of capital.

    I'm happy to explain the details.

    What's the difference between a fit-up...? What is a fit-up budget? What does that mean?

    Go ahead.

     Thank you for the question.

    The term “fit-up” in English translates to “aménagement” in French.

    When we rent a building, all the owner provides is the shell, the carpet, the washrooms and the doors. The fit-ups refer to all the work the department asks us to do so that it can fulfill its mandate. It refers to things like furniture, temporary partitions and new offices for certain activities, be they conference rooms or closed offices. The fit-ups refer to all the improvements we make to the rental space.

    Thanks to both of you.

    Ms. Day now has the floor for five minutes.

    Thank you, Mr. Chair.

    As you know, there were a number of problems related to the census and the new census methods.

    Shared Services Canada is requesting $10.7 million for the planning, design, development and testing of questions, systems and processes for the 2016 Census of Population.

    Why is Statistics Canada not paying for all the costs of conducting the census?

    I'm going to ask Peter Bruce to answer that question. Thank you, Mr. Chair.

    Thank you for the question.

    The $10.8 million being requested by Shared Services Canada this year is to set up the infrastructure needed. Our role in the census program is to provide the telecommunications infrastructure, as well as the data processing and storage infrastructure, just as we do for all departments and all Government of Canada computer systems.

    The cost of providing all the necessary census infrastructure leading up to 2016 is currently estimated at $27 million. And obviously, that does not include Statistics Canada's costs.

    Will there be a return to a long census form, so that researchers, Canadians and various groups can have access to the data and information they need to function?

    Thank you for the question, but I don't think I am the person to answer that.

    What responsibilities will Shared Services Canada be given and when will they be carried out?

    The work is already in progress. We have begun setting up the core infrastructure at our data processing development centre to make sure it will work. We expect the production infrastructure to be in place by mid-2015.

    Delivering all the infrastructure needed for a census is a huge undertaking. It takes time as well as a trial period, prior to implementation, to successfully bring together all the data collected throughout the process.

     I think everyone has realized the impact of the budget cuts as far as the long form census is concerned. Working with the new system is incredibly challenging.

    Shared Services Canada is asking for $1.8 million for additional costs related to providing core IT services to client departments and agencies.

    Which client departments and agencies are involved? It appears on page 2-83 of the supplementary estimates. What is the reason for these additional costs?

    Thank you for the question.

    That $1.9 million is actually for transfers from partner organizations, mainly Environment Canada for weather services renewal, and a small amount for the Department of National Defence. There was an $865,000 transfer for Transport Canada, and amounts for Industry Canada and Infrastructure Canada.

    Those amounts are separate from the $18 million in voted appropriations and the $38 million in transfers because that money had already been appropriated to those departments for the initiatives in question. So it does not represent new funding but, rather, transfers between departments.

    That is why the amounts for these projects appear separately.

    I'm not sure whether that is clear.

    Your time is up, Ms. Day.

     Mr. Trottier now has the floor for five minutes.

    I want to ask some questions of Shared Services Canada. I'm glad you were able to come here today.

    I know this is still a fairly new initiative in the overall scheme of things. I believe that in your remarks you said that Shared Services Canada was put into action three years ago, and I would say it was long overdue. I've worked with some large corporations the size of the Government of Canada which took on these kinds of initiatives even 10 years ago, so better late than never. I'm glad we're actually making some progress.

    Some of the savings you identified in your remarks were very significant; $150 million a year is very significant for Canadian taxpayers.

    You mentioned the data centre consolidation initiative, in particular, going from 485 data centres down to seven. I didn't hear any associated savings in your remarks. You mentioned significant savings in other areas. Is it because there aren't any dollarized savings with that initiative? Can you describe why there is not a dollar figure associated with the data centre consolidation?

    Thank you very much for the question.

    The transformation plan, the seven-year journey that we are on to consolidate, is being funded with our existing levels. It takes money to achieve this. It takes money to migrate, but we are managing that from within. We are not showing savings at this time because we are still in the process of executing that plan. It is a multi-year plan.

     From some previous meetings we've had about Shared Services Canada, I know that some of the savings associated with data centres are hardware savings. It's also real estate. You also mentioned energy savings. Large, modern data centres actually consume a lot of energy.

    Have you done some work to identify energy savings and to what extent does this help the Government of Canada reduce its carbon footprint?

    Thank you very much for the question.

    You're absolutely right that, first of all, the closure of data centres is going to have an effect, as will moving to brand new enterprise facilities.

    I'm going to ask Peter Bruce if he has anything to add on the issue of the data centre consolidation and savings in that respect.

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

    Essentially, what's happening in the shift from 485 data centres to seven or fewer is that power consumption becomes much more dense, but the use of that power becomes incredibly more efficient. I can't tell you in kilotons, but there is a significant improvement in the carbon footprint for the amount of data processing that we need to do in the Government of Canada data centres.

    Thank you for that answer.

    I know another benefit of this data centre consolidation is improved data security. Can you describe the risks we currently have with these 485 disparate data centres? Now we can minimize the risk by going to seven data centres.

     I think it would be easy to understand that it's not only cybersecurity, but for 485 data centres you also need to have physical security. You need to have security personnel for all of those locations. Obviously, cybersecurity becomes easier when there are fewer data centres to manage and protect.

    On top of that, when you're moving to state-of-the-art data centres and you only have seven, you can invest in properly securing those facilities. Essentially, modern data centres are almost lights-out operations. There's a very limited requirement for people to actually go in to most modern data centres.

    We're hoping to achieve significant improvements on all of those fronts. Certainly, our threat profile is at much higher risk today than it will be in the new model.

    Thank you.

    The other area I'd like to talk about briefly is software licences. You mentioned that the government spends about $660 million a year on software licences. I presume these are annual costs. The savings you've identified are about $8.7 million a year and some of that is through some standardization and also bulk buying.

    To me, that seems a little low. We're talking about the saving of slightly more than 1% of the base line. I imagine there are some forces that would limit the savings we're able to obtain in this area. Could you describe some of those for us? I know software changes over time also, so it's not only standardization and bulk buying.

    Could you describe those forces that limit savings? Perhaps there are some more ambitious plans to increase the savings in the area of software licences.

    Thank you for the question.

    Mr. Chair, I will start by saying that yes, the savings that we've reported are from an initial consolidation of software procurement and entering into enterprise-scale contracts, which has produced some immediate savings and efficiencies. That is the piece that we've already been able to save, but to your point, there is more that can be done over time.

     I'll turn to my colleague, Peter Bruce, to see if there's anything to be added in that space.

    The only comment I would make is that the actual software component of the $660 million is about $100 million. That initial consolidation of only the software procurement, there is still an initial benefit from that, but you shouldn't be measuring the benefit against $660 million because that includes all of the costs associated with end-user technologies. The benefit is actually only from the $100 million software consolidation acquisition.

    Thank you, Mr. Trottier.

    Mr. Martin, your turn for five minutes.

    Thank you, Mr. Chair.

    As an observation, it seems that committee members of our oversight committee have worked really hard to try to better understand the continuum of government financing through estimates, budget, and public accounts, etc. It seems that you just learn the game and they change the rules on you, because lately, there has been a real expansion in both dollar value and frequency of lapsed funding in a number of government departments. It's almost right across the board. It's either really bad budgeting, or it's a deliberate subversive attempt to cut budgets without telling Canadians, or without telling oversight committees. Then the minister has this wonderful surplus at the end, pulls a sedated bunny out of a tattered top hat and declares. “Shazam! I have a surplus”.

    Can you tell me if this lapsed funding issue is going to be something we have to watch for in the public works area? Do you anticipate this notion of lapsed funding popping up as something that we have to deal with in this committee?

    Thank you, Mr. Chair, for the question. It is, indeed, a very good one.

    With lapsed funding, when you look at the number, the number doesn't say much. In order to conclude whether it's a legitimate lapse or not, I think we need to look at the program and whether the program is project driven, a program for grants and contributions, or an operational program. For instance, in PWGSC, we run a budget of over $6 billion and our forecasting, in terms of lapse at year end, is over 99% precision from period nine to year-end.

     That's exactly the type of answer I was looking for, Mr. Lakroni, so I'll interrupt you there. Thank you for the specific answer to a specific question.

    Along the same lines, you're asking for $136 million for increases in non-discretionary expenses. Can I ask, with regard to crown-owned buildings, leases, etc., why we are so far off in non-discretionary items? Could we not have anticipated and foreseen...? For the other category I can see this, but it should be pretty predictable and pretty accurate.

    In a stable environment in which we don't have inflation and we don't fluctuations in demand—

    Inflation is virtually non-existent for these purposes, is it not? I mean, it's low....

    Well, there is inflation involved in the number—let me deconstruct for you very quickly—

    You could anticipate inflation though. That is predictable. It's been 1% or 2% pretty constantly for the last 20 years.

    Actually, if you don't mind, I'm going to drop that line of questioning. I think I understand where it's going, given your lead-up.

    My last question, in the time I have left, has to do with one of the most thorny public works contracts we've dealt with in this committee over the last decade, and that is the relocation contract through public works for RCMP, military, public servants, etc.

    I understand the Government of Canada has now had to pay out to the griever, the guy who maintained all along that he got screwed. We just paid him $35 million. Are we now ready to admit that the Government of Canada was wrong and that he was right, and that Royal LePage should never have got that contract over and over again and that Envoy had a legitimate claim to damages because Public Works did not treat the contract fairly? Also, where will that $35 million come from? Will it be from your budget, or from the RCMP, or from National Defence or whichever the members were being located from?

    Thank you, Mr. Chair, for the question.

    This contract involved three departments. National Defence's share is $28 million; the RCMP portion is $4.2 million; the Treasury Board Secretariat portion is $2.8 million. A settlement with Envoy was reached on October 25, 2013 and—

    What was the reasoning? Was it just costing too much to keep fighting, or did the government admit that they were wrong and awarded damages?

    The minister should be here to answer a question like that. It's actually unfair to ask the chief financial officer a legitimate question that we deserve to have an answer to, but it's putting you on the spot. I ask it partly to illustrate how unfair and untenable this situation is.

    Thank you, Mr. Martin.

    You are out of time, but I can allow a few more seconds if you would like to add something.

    Situations like this happen. PWGSC processes over 60,000 contracts a year. We are sued for all kinds of reasons. Sometimes we win and sometimes we don't. In this situation the contract that followed was based on a competitive process awarded in 2009 to Brookfield Global Relocation Services and the process was open, fair and transparent.

    Royal LePage changing their name—

     Your time is up, Mr. Martin.

    It is now over to Mr. Butt for five minutes.

    Thank you very much again, Mr. Chair, for giving me the floor to ask a few more questions.

    Prior to being elected to Parliament, I spent almost two decades in the property management real estate sector in the greater Toronto area. I'm certainly fairly familiar with the advantages of leasing versus owning space, the importance of renovating space to make sure that it's appropriate for the use, and at the same time making sure we're getting the best bang for the buck out of those changes. Anyone who has been around here for the last three and a half years as I have has certainly seen the bustle of construction and different things going on.

    How prevalent is moving people around and making decisions to move different offices and departments around in different buildings whether they're owned or leased? What are the factors that go into making that decision? I'm fairly sure you do a cost-benefit analysis on what works best for any given department or ministry and the functions of its individuals. Is there a difference between how you look at this within the national capital region and how you do this for other offices and services we have across the country?

     You're touching here on the fundamentals in terms of planning of the programs and the reallocation of space resources, so I would turn to Monsieur Mongeau to answer the question.

    Thank you for the question.

    What factors enter into the big decisions when it comes to our portfolio?

    Let me first say that decisions regarding other departments' mandates are not made by PWGSC, clearly. Departments receive their mandates and are instructed to deliver certain programs. Then, they come to us with a list of everything they need, in terms of equipment, personnel and space. Essentially, that is how the process starts.

    So from there, how do we make our decision?

    As I mentioned earlier, our decision-making is based on certain factors. We begin by looking at the region in which the services will be delivered. We also take the environment and sustainability into consideration. We try to incorporate environmental criteria in our decision-making.

    Furthermore, we always take into account value over the long run. We look at how much we are going to invest today and how much we are going to invest down the road, and whether we are dealing with a short-term or long-term program. We may opt for a different solution in the case of a short-term program.

    The markets also play a major role in our decision-making. In the Ottawa area, for instance, our portfolio used to be heavily concentrated in the downtown core, but in the last few years, we have been moving out towards the suburbs. That is why we purchased the Carling campus a few years ago. It was a business decision. The building was for sale and it cost less. It made good business sense.

    We take all those factors into account. To keep costs low, we consider suburban options, as I just said. We assess whether we can move away from the downtown core without affecting the downtown market. In Ottawa, we are also taking a serious look at Tunney's Pasture. We plan to significantly develop that area.

    We have another promising property in Ottawa, 530 Tremblay Road. We take into account what we have in our portfolio and the market conditions. In each case, we carry out a detailed analysis of the investment. As I mentioned earlier, the situation can vary from market to market. The market in Toronto or Vancouver is completely different from the market in the Maritime provinces, which means the prices will be different and, in all likelihood, so will the solutions.

    We look at all those considerations before doing our financial analysis. And what we end up with is the value of the investment over a 25-year period. So those are the factors that motivate our decisions.

    We are no different from a bank or other large institution that owns equipment and buildings, Mr. Chair.

    You have 30 seconds left.

    I have a very quick question then. If I look at the Service Canada stand-alone building in the city of Mississauga, for which, obviously, a lease was entered into, is that through an RFP? I assume that's through an RFP and landlords would bid on securing that lease, and then you would determine it.

    I don't expect an answer today. You might want to get back to me.

    In the case of the building in Mississauga, one of the controversial issues there is that the landlord who owns the building charges for parking. It's not a free parking area. I just want to know when you are evaluating the value of a bid on a lease like that, do you take into consideration all of those extra factors, not just the actual lease cost to the Government of Canada but also these other extenuating factors when you're looking at securing a lease agreement for Service Canada, or any other department?

    Keep your answer brief please.

    Thank you, Mr. Chair.

    In their requests to us, departments list their requirements, properly speaking, things like the number of square metres and the equipment they need. Departments also have the option of requesting a certain number of parking spaces. But the job of managing additional spaces often falls to the department.

    Since you've asked the question, what we can do, if it is amenable to the committee, is get back to the committee with an answer once we have had time to look into it. I am not totally familiar with that file. I believe Shared Services Canada is in charge of that.

    Mr. Chair, I think we could get back to the committee with an explanation.

    You can answer now.

     Our lease agreements are competitive. In our financial analysis, we definitely consider the costs of all the benefits and drawbacks. That is how we decide where we will lease a property.

    My sincere thanks to everyone for being here today.

    If you have further information to provide the committee, you may do so through the clerk, who would be glad to pass it on to the members.

    It is now time for the committee members to vote on the supplementary estimates. You can stay if you like to find out whether your requests are approved.

    For supplementary estimates (B) 2014-15, I call the following votes:

     (Vote 1b agreed to)

     (Vote 1b agreed to)

     (Vote 15b agreed to)

     (Votes 1b and 5b agreed to)

    (Votes 1b and 5b agreed to)

    Is it the pleasure of the committee to adopt the following motion?

    (Motion agreed to)

    The Chair: I will report those to the House.

    Thank you to our witnesses today.

    We will meet again on Tuesday, at 8:45 a.m.

    The meeting is adjourned.