SBUD Committee Meeting

37th PARLIAMENT, 2nd SESSION

Subcommittee on the Estimates Process of the Standing Committee on Government Operations and Estimates

EVIDENCE

CONTENTS

Wednesday, April 9, 2003

»

1740

The Chair (Mr. Tony Valeri (Stoney Creek, Lib.))

Mr. Dan Ross (Associate Assistant Deputy Minister, Operations Branch, Department of Public Works and Government Services)

»

1745

The Chair

Mr. Dan Ross

The Chair

Mr. Dan Ross

Mrs. Carol Beal (Assistant Deputy Minister, Real Property Program Branch, Department of Public Works and Government Services)

The Chair

Mr. Gerry Ritz (Battlefords—Lloydminster, Canadian Alliance)

Mrs. Carol Beal

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1750

Mr. Gerry Ritz

Mrs. Carol Beal

Mr. Gerry Ritz

The Chair

Mrs. Carol Beal

The Chair

Mrs. Carol Beal

The Chair

Mrs. Carol Beal

The Chair

Mrs. Carol Beal

»

1755

The Chair

Mr. Paul Szabo (Mississauga South, Lib.)

Mr. Dan Ross

Mr. Paul Szabo

Mr. Dan Ross

Mrs. Carol Beal

Mr. Paul Szabo

Mr. Dan Ross

Mr. Paul Szabo

Mrs. Carol Beal

Mr. Paul Szabo

¼

1800

Mrs. Carol Beal

Mr. Paul Szabo

¼

1805

Mrs. Carol Beal

Mr. Paul Szabo

Mr. Dan Ross

Mr. Paul Szabo

Mr. Dan Ross

Mrs. Carol Beal

¼

1810

The Chair

Mr. Gerry Ritz

Mrs. Carol Beal

Mr. Gerry Ritz

Mrs. Carol Beal

Mr. Gerry Ritz

Mr. Dan Ross

Mr. Gerry Ritz

Mr. Dan Ross

Mr. Gerry Ritz

¼

1815

Mr. Dan Ross

Mrs. Carol Beal

Mr. Gerry Ritz

Mrs. Carol Beal

Mr. Gerry Ritz

Mrs. Carol Beal

Mr. Gerry Ritz

Mr. Dan Ross

Mr. Gerry Ritz

The Chair

Mr. Dan Ross

Mrs. Carol Beal

The Chair

Mr. Dan Ross

¼

1820

The Chair

Mr. Dan Ross

The Chair

Mrs. Carol Beal

The Chair

Mr. Dan Ross

The Chair

Mrs. Carol Beal

¼

1825

The Chair

Mr. Paul Szabo

The Chair

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CANADA

Subcommittee on the Estimates Process of the Standing Committee on Government Operations and Estimates

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NUMBER 009

l

2nd SESSION

l

37th PARLIAMENT

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EVIDENCE

Wednesday, April 9, 2003

[Recorded by Electronic Apparatus]

»  (1740)  

[English]

    The Chair (Mr. Tony Valeri (Stoney Creek, Lib.)): We're having an informal discussion, and it will be recorded, as I understand. So let's proceed.

    I'd like to thank you for coming before the committee, Mr. Ross, Ms. Beal, and Ms. Conway. I know you have some opening remarks. If you could focus on--to use Mr. Szabo's term--deviations or variations, or whatever might be in transition within your department, it would be of interest to us. So if you could focus on that, then we'll move quickly to members' questions.

    Again, this is a bit of a discussion and briefing. It's a learning process, and as I indicated, you will probably be called back in a more formal way to come before the committee with your estimates.

    Mr. Ross.

    Mr. Dan Ross (Associate Assistant Deputy Minister, Operations Branch, Department of Public Works and Government Services): Thank you.

    As we discussed, rather than reading our prepared briefing, I'll just give you a quick overview of the transformation that is occurring in PWGSC that is not reflected in the organization of the tabled document produced in January. I'll let my colleague, Carol Beal, talk to the other half of that issue as it relates to real property.

    Essentially, what is going on is a fundamental integration of the major business lines and the service delivery of those business lines into a single operations branch from the previous supply, real property, and informatics organizations. On November 12, our department allocated 26 directors general in their sectors to the new operations branch to create that, understanding, of course, that there would be a lot of work to reorganize these into a new business model. The new business model will not be three vertical business lines, but will be very much a horizontal, collaborative, integrated model where the intent is to deliver virtually all services through our client service teams, not just real property, as had been the experience in the past, but procurement, IMIT, and real property.

    So the new operations branch is composed of about 23 sectors, headed by directors general. Seven of those are operational resource management sectors, essentially centres of expertise, advice, and the delivery of product. There are seven client service teams led by directors general who are directly focused on serving a given client or group of clients, and there are the existing five regional directors general.

»  (1745)  

    The Chair: I'm sorry, Mr. Ross, could I just stop you for a second?

    Mr. Dan Ross: Yes, go ahead.

    The Chair: Since we were waiting for Mr. Ritz...what we did, Gerry, was just deem this to be a general discussion. We'll now go into the formal part of the meeting.

    So I'd like to call the formal meeting to order pursuant to the motion of the Standing Committee on Government Operations and Estimates adopted November 26, 2002, a study to inquire into matters relating to the review of the process for considering the estimates and supply.

    Mr. Ross, please.

    Mr. Dan Ross: I will just finish with another 30 seconds or so.

    As part of that transformation, there were three program branches created that were to look at the delivery of policy issues on new products and so on. One of those is led by my colleague, Carol Beal, and I'll just let her talk about the real property program part of that.

    Mrs. Carol Beal (Assistant Deputy Minister, Real Property Program Branch, Department of Public Works and Government Services): Thank you.

    Perhaps I'll just give a bit of a rationale behind the establishment of the program versus the operations. I'll be very brief.

    One of the concerns our deputy had in looking at the organization was that perhaps we were very occupied with transactions and the amount of time we were able to devote to establishing very good program frameworks, policies, best practices, guidelines, and standards, and making us a leading-edge organization was being detracted from by virtue of the transactions in our desire to provide good service to our clients. So the separation Dan talked about has in fact reinforced our ability to take a look at the program area, which largely is focused on policies, best practices, and leading-edge expertise.

    At the same time, one of those things is performance measurement and results and how we look at reporting our information to Parliament. As well, in the program area I do have direct responsibility for the program called payments in lieu of taxes, as well as some engineering assets. So between the two of us, I think Mr. Ross and I can hopefully answer all of your questions today.

    The Chair: We'll go right to the questions.

    Gerry, are you ready?

    Mr. Gerry Ritz (Battlefords—Lloydminster, Canadian Alliance): Mr. Chairman, thank you. I must apologize for my tardiness.

    Ladies and gentlemen, thank you for being here today.

    The whole purpose of this subcommittee is to find a way to make the blue books we get from all these different things user-friendly. You guys are immersed in this up to your necks every day; we get kind of one shot a year. We're supposed to get right up to speed, ask you really good questions, and look after the taxpayers' money. I don't seem to be able to do that with what I get in these books. The numbers may be there, but the words may not be there; the words may be there, but the numbers, like the variances from the year before and all those types of things, may not.

    The Auditor General says the same thing in her jargon. I look at the program she brought down in 2002, her recommendations, your response, and the action plan. It all looks good in theory, but it doesn't show up in the numbers. We saw the same thing in 1994. Going back over those years and doing the research, I don't see where the rubber meets the road on a lot of what she recommended.

    How do we make that transition? As parliamentarians looking after the public purse and going on with it, you guys are a small cog in the government wheel, as it were--a very important one. But how do we work all of this together? Can you give me an idea of where we should go and what we should look for?

    Mrs. Carol Beal: We appreciate your point. It's one that concerns us as well. It's not an easy task to write the report on performance to Parliament because we are preoccupied ourselves with trying to understand what makes meaningful information for the people who are going to read it. So we do our best to talk in terms of the nature of our business and what we think is significant.

    How do we arrive at that conclusion? We look at what private sector companies report back to their boards of directors by way of global performance indicators. We also work closely with other governments and jurisdictions to see what they use. We have worked closely with our colleagues in the general services administration in the United States to come up with a set of indicators that we both feel respond to the needs of our collective elected bodies.

    At the same time, we have worked with the Auditor General's department. They set out five criteria, and I believe in their appearance before you last week the Auditor General said they felt our report met the criteria. We acknowledged with them that there were improvements we could make. We're a learning organization and we'd like to learn with you how to do that better. One of our goals is to have you use our report as a model for other departments, and we'd be very happy if that should happen.

    Perhaps we can understand some of the areas where you think it would be better. We've tried in our explanation to describe our business in terms that we think are relevant. I'd like to assure you that in the context of our business we collect well over 50 types of performance information. We display these in different ways. We report performance to the Commissioner of the Environment and Sustainable Development, for example.

»  (1750)  

    Mr. Gerry Ritz: If I can just break in, we want to have a dialogue here and more of a briefing, rather than anything antagonistic or blaming, and all that usually happens.

    Is there a need for 50 different criteria? Are we making it too complex?

    Mrs. Carol Beal: I would say that for us managing our business, each of those elements has some significance. We don't necessarily use all 50 of them at all levels of management within the department. For example, at a building operations level we would measure energy utilization. We would use very specific information related to cleaning costs. We would try to compare ourselves to the private sector to see if we were on par, etc.

    At a more senior level, we would tie the information related to utilities and our use of them to the objectives of the government with respect to meeting sustainable development targets and Kyoto. So we would use a different set of indicators or a more global set of indicators for our purposes in that regard.

    If I might say, the indicators are not just for our external reporting; they are also to help us manage the delivery of our program internally, to ensure that we're doing the right things and we have the good comparables to benchmark against.

    Mr. Gerry Ritz: Okay. I'll pass for now.

    The Chair: Just before I go to Mr. Szabo, you say you use your performance indicators as a way of comparing yourself to the private sector. Would we actually see in some document a category that said “your performance” and “average performance in the private sector”? What document would that be in?

    Mrs. Carol Beal: We have an internal document called an asset report card, and, Mr. Chair, I'd be happy to leave a copy of that with the committee should you wish.

    The Chair: But that's an internal document.

    Mrs. Carol Beal: It is, but it's available on the website, and we--

    The Chair: Why couldn't that information be in the actual documents that are tabled in Parliament?

    Mrs. Carol Beal: There's no reason it couldn't, Mr. Chair, if you felt it was a useful level of information. It may be more detailed than the committee would like to have access to, but there is no reason it could not be made available. You're more than welcome to have it.

    The Chair: I only make the point because from the standpoint of the members of Parliament, when they go through this exercise, in the line of questioning there's reference to how does the private sector do this. I understand that it's Government Services and that's different. But how does the rest of the world deal with this and how do you measure up against the rest of the world? I would think that if there were some information, whether in the form of a chapter, a table, or in aggregate terms, so that members get a sense that there is a comparison going on and you are meeting some other external performance measure, members would get a level of comfort from that type of information.

    The other challenge that members often feel is that they have to go find it. I'm not going to go to the website. I would depend on the committee researchers to go and do that. But why shouldn't it just be in the document that gets tabled in the House, so that when I flip to page 20, it's there?

    Mrs. Carol Beal: We could certainly do that, Mr. Chair. In fact, we could go one step further, which is to give the comparatives from the Building Owners and Managers Association, BOMA. They publish a survey every year. We participate in that survey. We could draw out relevant indicators from there and show you our indicator results compared to the BOMA indicator results for the same categories. We'd be very happy to do so.

»  (1755)  

    The Chair: Okay.

    Mr. Szabo.

    Mr. Paul Szabo (Mississauga South, Lib.): Carol, I think you hit the nail on the head when you said you want to provide meaningful information to the users. So you have to identify your audience.

    In terms of information I would like to have, and you can let me know whether you have it and whether we can get it so that when we have our final run-through and get into it.... We have turnover in committees. I may deal with one section at one time or whatever. But we all have to know what business you are in. If I were a new employee coming in as a middle manager, do you have something that says what we do? What lines of business are you in? How many employees do you have? How many pieces of property do you have, and is it relevant to me to know whether they're owned, leased, or a combination of some other things? What are the key operational cost components that I should be aware of, such as how labour intensive you are? Human resources is a big part of the cost. It could be anywhere from two-thirds to three-quarters of your budget. I'd like to know the dimensions. That's what I'm asking for, so that I feel comfortable that I know what you do.

    On behalf of the Government of Canada, we acquire space. We provide for the needs in an integrated way. We have the expertise on board to be able to do all the things we could hire people from outside to do, but we have economies of scale achieved by having it in-house, etc. So it tells a story.

    I don't need that for the estimates, but I need that as part of my knowledge base so that I don't drift into areas that are either not your responsibility or where I'm quite aware that there are other factors. I'd really like to know how many employees you have and how that trend is changing. I know that because of program review there was quite a drop and sick days went down, and there were all kinds of consequences as a result of material, substantive, one-time events.

    So I need to know a little bit about the things that would drive the clear exceptions. I would like to have available to all of the members that concise document, probably no more than a couple of pages, that says what business you are in.

    Mr. Dan Ross: We could do that easily. It's very easy to do.

    Mr. Paul Szabo: It's sort of like a permanent document.

    Mr. Dan Ross: It is available on our website. We have a very good website in Public Works and Government Services, both internally and on the Internet. There is far more there than you need to know, but you actually can go into the opening page and find very key stuff very quickly. But we could summarize that for you.

    Mrs. Carol Beal: Very often we are called upon to brief a new minister or a parliamentary secretary, and we have a wonderful set of briefing documents. It may be helpful for the committee to receive such a briefing that would explain what the department is about.

    I'm sure other departments have the same thing, so that's a standard document.

    Mr. Paul Szabo: Having said that, I think we always have to remember that as the amount of paper goes up, the glazing of the eyes increases, because it's just too much.

    Mr. Dan Ross: It's very concise.

    Mr. Paul Szabo: It really has to be down to, what do I really need to know? So if this year we have 10,000 properties and next year we're going to have 11,000, and this year we have, I don't know, 1,000 employees and next year we're going to have 1,200, now I know dimensions. I'm not sure if it's relevant for me to know how much lease revenue you get when you have a recovery, and so on.

    So it's base information. I think we really have to help people to know what business you're in, so that we're all moving along together.

    Mrs. Carol Beal: We're very excited and proud about our business, so we'd love the opportunity to talk about it.

    Mr. Paul Szabo: Good, but I think it's important to remember always that we need to keep it down to, what do I really need to know? You could kill me with detail. You could bury us, and we could go through a process that none of us would benefit from. I'm sure you can bury us with details and all the subtleties, but it really gets down to that I didn't see here or stumble across how many employees there are in the real property section. It's relevant, but it's not there.

    So help me to get the basic dimensions of your business and a brief description, and if you could get it on one page, I'd be happy.

    Ms. Carol Beal: On one page?

    Mr. Paul Szabo: Absolutely, because you have to sacrifice. I know you can do 100 pages, easily, but we only have time to deal with one page. So if we can cooperate on what's important.... Tell me what I need to know, not everything I could know.

    The document I was asked to work with is the real property services balance scorecard. Who is this prepared for? Who is the intended audience?

¼  (1800)  

    Mrs. Carol Beal: There are several audiences for this. One is the internal audience of the department. We like to tell our employees how we do. We like to tell the regions how one region is doing compared to another and how we are in fact moving the corporate agenda that we articulate in our strategic plan. So that's very important.

    Secondly, we use this in dialogue with our colleagues as we're comparing how we do with each other. So it's kind of a reference benchmark.

    I'm really proud to say, if I might, that the approach we're taking here is being looked at very seriously by the General Services Administration in the United States. We're being seen as a bit of a leader in this area.

    So the audience is both internal and external. It was never intended that the audience be specifically parliamentarians or any interest group. It was just a general statement of how we assess our ability to do our business.

    Mr. Paul Szabo: Having gone through this document, I found it to be a hard read, but I'm not in the business every day. I had difficulty with terminology, short forms, etc. So as part of your homework for information requests, get us familiar with the terminology. We should have a glossary of terms and short forms, etc., so if you happen to use them, we'll have a chance.

    Now, in this whole document there were four aspects that you dealt with: client satisfaction, people, asset management, and financial success. After having gone through all of this, all the charts and other stuff, if I had to just close it and say, okay, I went through and I looked at this, what it told me was that in terms of client satisfaction you went from 68% to 75% in the year ended March 2002. The report here said that was great progress. I would have turned it around and said that one-quarter of the people who rely on you to provide service are not satisfied. So I would ask you, what are you doing about it?.

    There's spin in here, okay? This document is good if you want to impress your employees and all this other stuff, but for us, in terms of client satisfaction, all I have to know is that a quarter of your clients are not satisfied, and we'd better discuss how we are going to satisfy them. What are our benchmarks, our targets, and our timeline? What are the industry comparatives? How do we rank, because relative to last year it's good but relative to having someone do this for us, could we expect better, based on industry standards?

    There are always going to be people who are not happy with air quality or temperature, which were the two biggest items, by far the two biggest items they complained about. In terms of the people--forgetting about the program review--we're having a slight increase in the number of personnel.

    There are only a couple of things I learned about here in terms of the people. Number one was the demographics of your workforce, that over the next 10 years 48% of your workforce is going to retire. This is significant, and it's probably the same in many other sectors simply because of the baby boomer impact. As well, there was the ability to attract and keep people. This is a key issue and it probably is for every department.

    I don't need to read any more about this. I want to take that thinking, the demographics of the labour force and your challenges, and find how we are going to get from here to there. Do you have plans, and are they short-term or long-term, or do we have a strategy? I would want to ask you questions. If you can help me so I don't need to talk about....

    Half of this document is about various aspects of people. One of the things I recall reading in here was that before program review the average sick day per employee was something like 17 days. Well, it went down and now it's creeping up again, and it's around 10 or 11 days right now. That in isolation doesn't tell me a lot. How does it relate to the public service at large? Where are we relative to other departments? Is there anything different in this department or characteristic of this department that would tend to indicate--because there are more outdoor people or something like that, who knows--why our numbers may be different?

    We might talk about some of those aspects, but by far, in terms of the management and strategy for the real property division, you have a human resources challenge that is very serious and high risk if it's not done well.

    On the asset management, to tell you the truth, I really couldn't get good information out of this document because I didn't know how many properties you managed and whether they were large properties or small properties. It seems to me your workload is not by square footage, it is by building. How many do I buy, etc.? If I have a 100,000-square-foot building or ten 10,000-square-foot facilities, there's a different operating cost component. More of yours seem to be operating costs.

¼  (1805)  

    I need dimensions, and I couldn't deal with that there.

    In terms of the financial success, I think you've basically said in here, you know what, we haven't lapsed; we're in the ballpark; we're running according to where we should be. But I'm not sure if I've missed anything. If lapsing is what you're looking at, then we have to get a little deeper into, how do you manage the lapsed area?

    Having gone through this, I can put this away now, and now I've told you the things I think are the most important for us to discuss when I ask you questions on the matters I've just mentioned.

    Mrs. Carol Beal: I'd just like to point out, Mr. Chair, that the types of questions the committee member has raised are exactly the types of questions we ask when we internally review the balance scorecard. You've just hit the nail on the head in terms of how we use it.

    We've improved from 63% to 75% on our client satisfaction and we take that as a positive indicator, but the question we ask is, how do we take it further, etc.? The unit cost is how we compare with the private sector because that's the basis on which they measure.

    The types of questions you've been posing are exactly the types of questions this was meant to stimulate in terms of internal management. I would assure you we'd be able to come back and answer those questions for you because that's the kind of dialogue we've had around this ourselves.

    Mr. Paul Szabo: I would just simply ask you, with regard to the matters I've raised--I don't know if you've made some notes about the issues--could you provide me in advance of our next meeting with a little bit of information that would help me prepare my questions based on the dimensions? Are there trend lines, comparatives, variance analyses, statements of intent, changes of strategy, etc. ?

    One of the lines is--I really should clue this; I didn't think it made sense--“The RPS Balance Scorecard plays a key role by tracking progress through these performance measures against our strategic direction.” I didn't think strategic direction was something you could compare anything against because it was a statement.

    Mr. Dan Ross: Well, the strategic objective is articulating where you want to be, and you can describe that in terms of parameters as well. You could have the strategic objective being 90% client satisfaction if you know you have a 15% problem. Say the industry regularly achieves 90%, and we're saying, we need to be there--

    Mr. Paul Szabo: It's sounds like, here's our forecast and here's our progress.

    Mr. Dan Ross: Yes.

    Mrs. Carol Beal: There are some elements of our program for which we don't set targets as much as we set direction, and one of those is specifically the human resource area. One of our strategic directions within the strategic plan for real property was that we would improve our workforce in the sense of having a highly motivated, highly skilled, competent workforce with the right skills in the right places. We would address the workload issue. We would deal with the motivational challenge through addressing the challenges of workload. We would have a plan in place to address the demographics. The strategic direction was to have a revitalized workforce that was capable of delivering the program.

¼  (1810)  

    The Chair: Mr. Ritz.

    Mr. Gerry Ritz: Good dialogue.

    The Auditor General in her 2002 report--I'm just going back there to touch on a couple of things that build on what Paul was saying--says there's a deficiency in your long-term planning. Then out of the other side of her mouth she says that your basis of policy should be updated because you only update community involvement and regional investment strategies every five years. So she's saying, on one hand, the long-term strategy isn't there, and where you should be making some changes and some planning, it's put off for a five-year cycle. How do you rationalize those two? They kind of collide.

    Mrs. Carol Beal: The basis of the strategic plans, Mr. Chairman, is to deal with the environmental context within a market. It was found in most of our markets--and there are a couple of clear exceptions, maybe one being the NTA--that the stability of our crown-owned inventory and the fluctuation we deal with in terms of leases are reasonably balanced.

    The refreshing of the strategic plan is something that really only needs to be done on about a five-year cycle. It includes a very detailed analysis of the economic environment, the employment environment, the programs delivered by the public service in the area, and the market assessment, including a detailed market valuation of our property holdings. As we enter into individual transactions, depending of course on the size of the transaction, we do perform a market analysis for the transactions to ensure we're getting the market-comparable rate with what we do.

    That's only a small component. It doesn't take into account, for example, the condition assessment of our inventory in that area. So the condition is assessed strategically once every five years; on an operating basis the building condition is reviewed annually. What goes into the strategic document really has much more stability, and therefore the five-year time cycle was seen to be a cost-effective and labour-effective way of looking at it.

    Mr. Gerry Ritz: How do you handle curves that are thrown at you like the Kyoto compatibility--that's a huge factor now--and the increase of some 27,000 civil servants for whom you have to find spots?

    Mrs. Carol Beal: I'll deal with Kyoto. I'll let my colleague deal with the civil servants.

    Mr. Gerry Ritz: You guys don't have the lead time to make that type of thing happen. I'm not concerned about how long it takes to implement, but do you get enough lead time to make the strategic choices you need to make?

    Mr. Dan Ross: In terms of increasing the public service?

    Mr. Gerry Ritz: Well, in terms of the outstanding civil servants, the Kyoto Protocol, upgrading your buildings to those types of things, do you get enough time? Asbestos must have thrown you a huge curve.

    Mr. Dan Ross: In terms of the increase to the public service, other client departments can't grow their capacity faster than we can react. Let's say they go to cabinet and get a new policy mandate and then they go to Treasury Board and get the resources to implement that mandate. There is a formula of 13%. If there's an increase in, say, 100 FTEs, 13% of that equivalent salary is given to PWGSC to accommodate the new office space and so on that's needed for that workforce. That generally gives us enough time to react, to find new lease space, to do another acquisition, while that department is expanding to be prepared to deliver that new policy mandate.

    Sometimes you don't get enough time and often departments change their mind. What do you want to do?

    Mr. Gerry Ritz: Let me give you an example closer to home. I don't know if you guys worked on the Galleria building in Regina or not. I've actually done some work in that one, in the attached Cornwall Centre, in my former life. Whether the purchase price was the right price or not, whether it was an excellent buy or whatever, you're talking about major remodeling. Nobody's going to be in it before 2004. There are huge problems with parking and traffic in that location. How does all of that go into your mix when you decide that's the building? Is it strictly because it's such a good price? Is it right in the area you need to be in?

¼  (1815)  

    Mr. Dan Ross: I'm familiar with where we are right now. I'm not familiar with how we got the architects and so on.

    Mrs. Carol Beal: The Galleria building is in a prime location in town.

    Mr. Gerry Ritz: I know that, but there's a huge problem with parking and traffic. I've been there, done that.

    Mrs. Carol Beal: Part of the project, though, will be addressing part of the downtown parking challenge in that area. So the project has incorporated in it, if I'm not mistaken, some parking in the adjacent building but not enough for everything. Again, as a policy statement for the Government of Canada, we don't provide 100% parking spots to 100% of the occupants, generally.

    Mr. Gerry Ritz: No, I understand that, but that puts a stretch on everybody else downtown.

    Mrs. Carol Beal: In a downtown core we do try to confine the number of parking spots made available to public servants, because, again, that fulfills the other, broader government objective of sustainable communities.

    Mr. Gerry Ritz: Take the bus.

    Mr. Dan Ross: It is a challenging project. The acquisition price was fairly low, but it is a fairly major rebuild of the complete structure. I believe it's almost $28 million.

    Mr. Gerry Ritz: This is like a chunk of it.

    The Chair: If that's okay, I have a couple of questions.

    On page 10 of the RPPs in 2003-04 and 2005-06, essentially your spending remains relatively stable during that planning period. Is that correct? At the same time you state that there is growing demand from your clients for modern infrastructure and that sort of thing. As a member, I guess, the first thing that would come to mind is, does that mean we see supplementary estimates? Are you going to use supplementary estimates to meet that pressure, since you're suggesting that your spending would remain stable? There's a whole bunch of pressures. There's security. There's new security. There are other kinds of pressures. How do you explain that?

    Mr. Dan Ross: Well, I think the pressures in terms of public service size and our accommodation demands are probably not increasing as rapidly as perhaps there's a perception that they are. There is a firm linkage there through Treasury Board and our funding formula. What you see in terms of variations in supplementary estimates often is an acquisition of an opportunity.

    In this year's supplementary estimates there was an example where we bought the Skyline complex for about $92 million, which was an opportunity to consolidate two departments from nineteen buildings and nine locations scattered all over Ottawa into a relatively modern facility that became available on the high-tech market.

    That created a bump that you saw in the supplementary estimates.

    I think if you look at the history, there aren't all that many bumps actually that appear late in the year in our supplementary estimates.

    Mrs. Carol Beal: Also, Mr. Chairman, there are a couple of fairly routine things that do require us to use supplementaries, and these are procedures established by Treasury Board. For example, to access the 13% Mr. Ross referred to earlier, we do that through supplementary estimates. To access money that has been approved for program integrity purposes, the submission goes through in its entirety and then our department must go forward and meet the conditions set by Treasury Board to access the money set aside for that.

    So there are a number of standard procedures that all departments follow through the supplementary process, and some of our money would be there.

    What Mr. Ross didn't mention in the Skyline acquisition was that the capital cost, which was one of the project alternatives of building that, was forecasted in our main estimates in the previous year, and for our fortuitous acquisition of that at almost half of what we had forecasted the capital project to be, we did have to use the supplementary estimates process to get the money.

    The Chair: But you would have netted out in the positive then. If you had planned in your main estimates to construct this thing, and you were very fortunate to acquire it at a much reduced value, then your main estimates actually would have looked very good at the end of the day.

    Mr. Dan Ross: You see, we had been planning to try to resolve the condition of the main building for Agriculture Canada, which is an old building out near the Experimental Farm, and the cost of doing that was very high. One of the alternatives was to build a new crown-construct building.

    Late in November or early December the insurance company that owned Skyline said they were prepared to talk about the sale of it. Unfortunately, it was too late to put that potential acquisition in our mains. Those negotiations took place for about another...actually we finished in early January, so we could get to the last Treasury Board meeting in January, the closing date for supps. It was just the timing that resulted in it being in supps, really.

¼  (1820)  

    The Chair: Yes, I would expect that is a valid use of the supplementary estimates. But when you suggested on page 10 that your spending remains relatively stable in the face of all these pressures, your response to that was that the pressures aren't that great, really--spending is not increasing as quickly as some people might think. That's what I thought you said.

    Mr. Dan Ross: I'm working with Carol's staff on our long-term capital plan. It's the strategic plan for the next five years for the major renovations or new acquisitions we want. Our demand is in the several billion dollar range, and our available supply is about $300 million a year, over five years. There's tremendous demand out there for consolidation of disparate locations of some clients, for major renovations of older buildings we own, and in particular in the recapitalization of some of the lease-purchase decisions that were made in the 1970s. So there is a lot of demand.

    It doesn't actually show up here, because that demand is in excess of what's available and programmed to be given to PWGSC. If you understand, the board manages how much it can allot to PWGSC as a routine for capital expenditures, so we have tremendous demand, which we have to manage within a fairly small envelope of capital.

    The Chair: Just before I go to Mr. Szabo, I have an interesting piece of information in front of me that the researcher put together through digging, I guess, and compiling a bunch of information. He's constructed a 10-year bar graph on your main estimates, which I'd like to give you. My question is not whether these numbers are correct or not, but my point is that something like this really would give members a very quick historical snapshot. Some words around this type of graph would really point members in the direction of where the trend is going, where there might be differences, and if there are spikes, why. It would give us a better understanding.

    In this particular document, it shows you have steady growth from, I would say, 1998-99 all the way through to 2004-05. Then, when you get to 2005-06, it drops off a little bit. So if I saw this bar graph, I would say, why are your estimates falling off in 2005-06? What would be the reason for that?

    I understand the trend, the increasing trend. You know, the public service is growing, you have increased pressures, you have security, whatever, but then it drops off. Why is it dropping off?

    Mrs. Carol Beal: A very quick reaction without looking at the detail, Mr. Chair, would be that this was probably reaching the limit of our reference levels provided to us by Treasury Board for planning purposes. We came in at those reference levels, but I would like to go back and verify that.

    The Chair: I'm going to give you that. The point I'm making is not about the actual numbers, but the format of this information would be very useful for members to see. It would give us the kind of historical perspective we need and words for why that bar graph is the way it is.

    Mr. Dan Ross: This could give you trend lines for a variety of key indicators--numbers of square meters, number of leases, number of crown-owned, is crown-owned decreasing or increasing.

    The Chair: But as you flip through this thing, you see the bar graph and ask, why does this look the way it does, and then you ask some questions.

    Mrs. Carol Beal: It would be very helpful for us to be able to tell the story as to why that reference level would not be adequate as well, Mr. Chair, so we'd be happy to provide you with that information.

¼  (1825)  

    The Chair: Okay, Mr. Szabo.

    We are already at 6:25.

    Mr. Paul Szabo: We are almost done.

    Getting back to information needs, key indicators are good, but you probably should also tell us why these are key indicators. What is the importance of looking at this as a key indicator? We have to understand. We don't know that and we have to articulate it.

    As you can see, we have actually been drifting between the meeting we're supposed to be doing and the meeting we'd planned to do to deal with the questions. But that's okay. It's a learning process.

    I'd also like to give you this. We had the Auditor General produce a document that...as I said, the Auditor General wanted some input in our pilot project. There are some questions from the Auditor General on the yellow pages here that one might want to ask. I'm going to give them to you. You might want to scan them to see whether any of these are relevant or helpful to you so that maybe the Auditor General will feel her office has been helpful to the process. We'd like to report on that.

    There is one last thing I would like to ask you for. Clearly, when we go through this process, we never want to be surprised or miss areas that we should have seen. We almost want to do a due diligence process with you--I think that's how I've described it to the committee in the past. We ask you in good faith to tell us what we need to know, and we trust you to do that. We're all honourable people.

    But you can also tell us--and I think it would be helpful for you to tell us--about the things that can happen that are of greatest risk to you. What should we look for? Is it an escalating market? Is it inflation? Is it operating costs? Is it people? Where are your risk areas and where are your opportunity areas, based on all of your historic knowledge of how this industry works? Help us to better understand risk and reward opportunities so that we will inform ourselves.

    We can look at your website and at other documents to prepare ourselves, but our job is to get the questions. It is going to be very important for us to understand where you could sustain the big hit or the big gain. And did you make it, did you take the opportunity, and if not, why not? Could you help to educate us on that side?

    The Chair: Okay, that's great. I want to keep this to 6:30 because that's the commitment we made as committee members, so I'm going to call the meeting to a close.

    Before I do, again, I mentioned to you that we would more than likely be calling you back to actually go through the formal process. This was meant to be a bit of a briefing session, an exchange of information.

    I would ask committee members if they would agree to allow me to make some decisions over the break in terms of some planning for when we come back, in consultation with the researchers and the clerk. We would do our utmost to communicate with you. We could do so over the break, in terms of e-mail, etc., if you could give me the authority to proceed in that manner.

    I see you're in agreement. Thank you very much. I'm sure we will be speaking with you again.

    The meeting is adjourned.