PACP Committee Meeting

    I call the meeting to order.

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

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

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

    Gentlemen, I understand you both have opening statements.

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

     Thank you, Mr. Chair.

    Good morning.

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

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

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

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

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

    I have a point of order, Mr. Chair.

    Go ahead, Ms. Sinclair‑Desgagné.

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

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

    You have the floor, Mr. Ieraci.

    Thank you very much, Mr. Chair.

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

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

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

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

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

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

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

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

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

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

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

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

    Thank you very much.

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

    Thank you, Mr. Chair.

    Good morning, everyone.

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

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

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

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

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

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

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

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

    Thank you.

    Thank you both very much.

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

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

    Thank you, Mr. Chair.

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

    First off, who approved this expenditure?

    Either of you can answer.

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

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

    How many...?

    How many storeys? How many floors?

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

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

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

    Thank you for that. I appreciate that.

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

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

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

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

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

    I appreciate that.

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

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

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

    Can you guys answer any questions?

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

    I have a point of order, Chair.

    Ms. Khalid, go ahead.

    When we invite witnesses to committee, we owe them respect, and should not badger them.

    I would ask, through you, Chair, if Mr. Stewart could be a bit more respectful to our witness.

    One question like that is certainly far from badgering.

    Obviously, these two witnesses have certain lines of responsibility. Just for everyone's awareness, the NCC will be coming in to see us, we anticipate, after the recess week.

    It's back to you, Mr. Stewart. I did pause the clock. You have just under two minutes.

    There was a marketing and communications firm engaged. Do you know why?

    The short answer to the question is no. What I would say is—

    Does Treasury Board know why?

    No, we do not. That would be a question that you would have to address to the National Capital Commission.

    Nobody knows anything.

    Were any of the construction contracts...? Actually, what was the initial approved budget for the $8-million barn?

    Within the National Capital Commission's corporate plans, it identifies the overall expenditures it will be undertaking based on its entire budget. It breaks that budget down based on large categories, including upkeep and maintenance of things like the entire suite of official residences. This specific issue was not identified as a separate line item, so I don't know the initial budget. As part of its planning, it would have had budgets and budget projections.

    Can you explain the procurement process for the $8-million barn?

     The National Capital Commission can answer, but one of the things I would point out is that, as a Crown corporation, the National Capital Commission operates much more as a private sector entity and therefore is not subject to most of the policies and rules from the Treasury Board that would, for example, apply to departments or agencies.

    It's safe to say that the sole-sourcing of contracts was more than possible.

    They have flexibility in terms of how they undertake their procurements. I don't know what processes they use—

    I'll take that as a yes.

    How many contracts in total?

    I'm sorry, Mr. Chair, but I don't know the answer to that question.

    So you don't know how many subcontracts, either. You don't know how many bidders. You don't know anything about their procurement.

    No. Their procurement process is operational. Given the arm's-length nature of Crown corporations, it is the responsibility of the organization to manage itself in accordance with the applicable rules.

    Has either of you been in—

    Thank you. That is the time, Mr. Stewart.

    I'm turning now to Ms. Bradford.

     You have the floor for six minutes, please.

    Thank you, Mr. Chair.

    Thank you to the witnesses for coming today.

     I know it's unfortunate that the NCC person isn't available because they're on vacation, and I know you may not have answers to some of these questions.

    I was just wondering, Mr. Ieraci, in what level of detail does the NCC report its line item spending to PSPC?

    As a Crown corporation, the organization doesn't have the obligation to report to PSPC. What it does is that it prepares a corporate plan on an annual basis, which basically identifies the activities that it will undertake based on the totality of its budget.

     They break down those activities in large buckets of activities, for lack of a better term, and that corporate plan is reviewed by the department in support of the Minister of Public Services and Procurement, to be able to ensure that the activities the Crown corporation is going to undertake are aligned with the general government direction. Based on that, the minister recommends the corporate plan for approval by Treasury Board.

    Does the NCC have to seek approval from PSPC before embarking on projects? If so, which ones?

    No, they are not required to seek endorsement or approval from the Department of Public Services and Procurement. As an arm's-length organization or Crown corporation, they actually don't require the department's approval to be able to move forward.

    They have complete autonomy to decide what they're going to pursue and the budget for it.

    They have autonomy for the budget they have: how they're going to expend and operationalize that budget.

    When the project was launched, do you know how long it was expected to last and whether it was on schedule?

    I unfortunately don't know the answer to that question.

    Would you have any idea if the costs are higher than those of similar projects carried out by the commission or other organizations?

    I can't do comparisons in terms of the NCC's activities, because that would be within the NCC.

     What I can say is that I saw from the public information by the National Capital Commission that the project did come within the budget that had been identified.

    Maybe you could just review the history of this project. It keeps being referred to as a “barn” and it's actually a kind of maintenance facility or storage facility. Could you give us more details about the history of this site and its use prior to this project?

    Again, the National Capital Commission will be able to provide a more comprehensive response, but based on the information I have, it used to be a series of four buildings that were past their life cycle and had some health and safety concerns, so they basically needed to be changed, updated or demolished, basically.

    As part of that, there was some site preparation. There had to be some abatement work and some demolition had to be done of the previous facilities for the National Capital Commission to build this new storage facility, which, as I mentioned previously, does a number of activities, including vehicle storage, repair garage, and equipment and tool storage. They have workspaces there.

    Again, my understanding is that they use this facility to be able to undertake the maintenance of the 79 acres of the Rideau Hall grounds.

    Are there any particular specifications for this building, do you know?

    In terms of requirements, the National Capital Commission would be able to let you know what their requirements were from an operational perspective.

     What I would indicate—which, again, is publicly available information—is the transition from the four old buildings, which were removed, to the new building. The new building is considered a green building and has zero carbon emissions associated with it.

    In terms of the actual requirements and what they're actually using the building for—what they needed in terms of size, space and equipment within it—again, the National Capital Commission, as part of its activities and its responsibilities, would be the one to determine the requirements and undertake the activities to build the facility.

     This was a brand new construction. Would it be reasonable to say that the fact that they were building it to the Canada Green Building Council's zero-carbon building standards might have increased the cost? Might there have been additional costs incurred to achieve those standards?

    I can't give you a definitive answer on that one, because I don't have access to the analysis. The National Capital Commission could give you that.

    I have been informed, through other activities in industry and real property sectors, that when you do go towards greening, there may be an additional cost at the beginning that will be incurred, with the offset of greener facilities on a go-forward basis. Depending on the amortization period, it may not be that much more expensive.

    In this case, again, the National Capital Commission would be able to provide you with a response more specific to this building.

    Just to get it on the record, and this is public information, I believe this building is the Government of Canada's first zero-carbon building in the national capital region.

    That is what the National Capital Commission has posted on their website, yes.

    Right.

    Could you explain to us how the minister communicates with Crown corporations?

    Do you mean generally speaking, or with regard to the National Capital Commission?

    Well, let's talk about the National Capital Commission, because that's what we're talking about in this case.

    From a communications perspective, there would be two forms of communications. I would call them “formal” and “informal”.

    On the formal side, it's some of the things that were mentioned by my colleague. Through the review of corporate plans, there are letters of expectations that are sent to the CEOs of all Crown corporations by ministers, which basically identify the expectations of the minister in terms of what the Crown corporations will do in terms of activities. Those would be the primary ones, or what I would call “formal”.

     Of course, ministers are free to meet with the chair of the board of directors and/or the CEO of the Crown corporation to ensure that government policy and government direction are understood by the Crown corporation and that the Crown corporation is seeking to adjust its activities to be aligned with the overall government direction.

    Thank you.

    That is the time.

    Ms. Sinclair‑Desgagné, you have the floor for six minutes.

    Thank you, Mr. Chair.

    The main objective of this meeting was to look into the $8 million allocated to this barn in the broader context of the role the Governor General plays. A lot of public money goes into supporting this quite archaic function; that's the least you can say about it. To put it more bluntly, I'd even say it's a pointless function.

    You can clearly see that there is a problem here if you consider this $8 million expenditure for a barn in a broader context.

    Let's see what answer you have to give us because we haven't received a lot of information from you so far.

    You mentioned a renovation plan approved by the Treasury Board. Is that correct?

    Thank you for your question.

    What happens is that the corporate plan outlines the major activities that are being planned by the Crown corporation. The corporate plan goes to Treasury Board for approval. It would outline the major activities. As I said, it would not necessarily be project by project. It would be a higher-level major activity.

    What was the total expenditure amount that you approved for Rideau Hall?

    I'm sorry, Mr. Chair, but I don't have that information with me.

    You come to a committee to discuss Rideau Hall expenditures, and you don't know how much you've approved or how much has been spent on Rideau Hall. You don't have that information. That shows an obvious lack of preparation. I'd like you please to submit that information to us as soon as possible.

    Let's continue with the other questions.

    Just a minute, Ms. Sinclair‑Desgagné.

     Is that something you could do, Mr. Gear? Could you submit the documents at a later date?

    [Inaudible—Editor] submit financial information.

    Thank you very much.

    You may continue, Ms. Sinclair‑Desgagné.

    As you previously said, the information wasn't provided on a project-by-project basis. We're talking about a total budget, which was submitted to and approved by the Treasury Board, and intended for the National Capital Commission to perform the renovation work.

    Now we learn today that, as part of the renovation work, the old barn was torn down, razed to the ground, in order to construct a brand new building.

    Isn't there a difference between approving a renovation project and approving a new construction that will even include fibre optics and elevators? That sounds like very high tech equipment for a barn.

    With regard to approvals, the National Capital Commission's submitted master plans essentially provide the overall budget, divided into capital and operating budgets. The capital budget includes activities that enable us to undertake works for the construction, renovation and modernization of buildings under the NCC's responsibility.

    As regards approval levels, I can't say whether they're different within the NCC. In the master plans, however, those works are treated as capital expenditures and considered from an overall perspective.

    I see. So no real distinction is drawn between renovation and construction.

    I have a question about the total envelope allocated to the Governor General. Who approves the Governor General's budget?

    I can't answer that question with regard to the budget for the Governor General in particular.

    The National Capital Commission has an established budget, and, as I mentioned, the way to spend it is based on master plans. As regards—

    That's fine. You don't need to repeat yourself; we understand.

    I wanted to know exactly who approves the Governor General's budget. I know it's not approved by Public Services and Procurement Canada. I think it's more likely the Treasury Board.

    Does the Treasury Board approve the Governor General's overall budget?

    I'm sorry, Mr. Chair. That's not within my line of responsibility at the Treasury Board, so I can't answer that question.

    Does that mean that neither of these witnesses knows who approves the Governor General's budget?

    That's beyond my area of competence, but, as far as I know, the only possible answer I can give you is that all budgets allocated by Parliament are set out in the main and supplementary estimates. That's the process that the government uses to allocate budgets to the various organizations. I couldn't tell you whether the Office of the Governor General is a separate entity.

    However, you can find that kind of information in the main and supplementary estimates.

    Thank you very much for attempting to answer.

    It becomes problematic when you see that the Office of the Governor General has a budget so large that it can afford to spend $117,000 on dry cleaning services and $71,000 on a limousine ride a few metres long in Iceland. I think our role here on the Standing Committee on Public Accounts is to get some answers. It would be practical to know who approves that kind of budget and especially whether anyone other than us is looking at government or departmental spending.

    Thank you very much, Ms. Sinclair-Desgagné. Your time is up.

    Monsieur Desjarlais, you have the floor for six minutes, please.

     Thank you very much, Chair.

    Thank you to the witnesses for being present here today.

    I do appreciate the Conservative members present here who initially put a motion for this important questioning, because I think it touches on.... I think this is a symptom, largely, of a greater issue. There seems to be an issue not so much within the procedures, procurement and operations of the NCC, but I think what's of the biggest concern to most Canadians, to be really frank, is the transparency, trust and accountability of these expenditures.

    That, in itself, is something that I'd like to focus on, and how we can understand the processes of accountability and transparency that are already within the NCC—because in many cases we deal with large departments and large operations like yours—and better understand how these things are made more accountable within the NCC, because it's no secret that these issues affect a great deal of how the country looks at building trust with its institutions.

    Not only is this barn a pretty serious circumstance of what one would expect versus what value Canadians get, but I think just to confirm some of the facts would be important for Canadians to better understand this.

    My first question is in relation to the type of project. It's understood as “the Barn”—I understand that, of course—but my understanding is that it's attributed that name because it sits on the former historical grounds of the original barn that stood there, but it's no longer operationally a barn. Is that correct?

    Thank you for that question.

    That's my understanding as well. The terminology of “barn” is basically a reflection of the historical building that used to be there, but as I've indicated, the building really is a storage or repair workshop or vehicle facility.

    While I know a barn conjures up images of certain types of buildings, for those of you who have had the opportunity to take a look at the National Capital Commission's website, where they have pictures—it was referenced before—it doesn't really look like a barn. It's much more of an industrial building with solar panels on top of it, a fairly large carport—

    This car garage, let's call it, does it maintain vehicles other than the Governor General's vehicles?

    I don't have a definitive answer to that. What I do know from the information I have is that it's a storage area for vehicles for maintenance and operations of the grounds and the property. I presume it's things like snow blowers and trucks and whatever is used for ground maintenance, but again, I'm speculating a little bit.

    The National Capital Commission would probably be able to provide a more definitive response.

    Okay, sure.

    I think what Canadians really don't understand is how these projects are reviewed for maintenance, how they're reviewed for operations and how they ultimately get precedence in terms of expenditure by the NCC.

    I think other expenditures that I'd like to make a comment on are those of Stornoway. We see $644 for a new leader of the opposition to move in there. That's a huge price tag just to change the locks. Most Canadians don't go through that process. There's $170,000 for cleaning that same residence, taxpayer-funded, and over $100,000 for regular operations and maintenance. These things pile up. It's going to be way past $8 million in a short period of time. In the amount of time the opposition has been in there, it's been over $8 million.

    In terms of the NCC, taxpayer-funded money, and the request, review and procedure by the NCC, within procurement, how are those functions actually dealt with in terms of the very initial setting of being reviewed as requiring maintenance? How do we reconcile the process? Could you walk us through that process so that I and other Canadians can have some understanding as to how the NCC operates in terms of reviewing need, assessing that need and then ultimately creating an expenditure?

    The National Capital Commission obviously would be able to provide you with more detailed responses, but in terms of helping the committee understand how it operates, when they provide their corporate plan, as I mentioned before, they have expenditures within two buckets, for lack of a better term—operating and capital expenditures.

    Within those activities, they will identify the suite of work that they need to do and prioritize those. Some of it will be for capital expenditures, in terms of needing to do upgrade or upkeep or construction of the numerous buildings and assets that they own in the national capital region, and others will be associated with the operations in terms of making sure that these assets are operating as intended.

    In terms of how they prioritize within those two envelopes, and even whether that's the way they determine how to prioritize expenditures, within those envelopes, the National Capital Commission, again, as an arm's-length Crown corporation would manage that, including making decisions in terms of how it prioritizes them. That would be reviewed both by their CEO and, ultimately, by their board of directors.

    I know that doesn't directly answer your question, but, again, I think they have a couple of different buckets of activities within which I'm sure they must have a process in terms of how they prioritize their respective activities.

     To the Treasury Board Secretariat, how do you participate in this process?

    Mr. Chair, as I explained, the decision to set up the NCC as a Crown corporation was enabled by legislation through the National Capital Act. They are governed by the rules stated in part X of the Financial Administration Act. The NCC is responsible for managing their day-to-day operations on their own because of their distinct mandate and the decision to keep them independent from government.

    The involvement of Treasury Board and the Treasury Board Secretariat is solely contained within the corporate plans and the operating and capital budgets submitted by the responsible minister. Those, again, cover the significant major activities that are detailed. It's not a project-by-project approval in any way. It's up to the NCC to manage that, within the parameters of the corporate plan and budget, and with the appropriations given to them.

    Thank you. That is time.

    We're beginning our second round with Mr. Stewart.

    You have the floor for five minutes.

    Thank you, Mr. Chair.

    The witnesses today were asked to come to committee to testify on an $8-million barn, when nobody in Canada would think that it is in the best interest of the taxpayers of our country to have an $8-million barn laced with fibre optics, a private security detail during construction and an elevator that potentially goes underground. Nobody knows where it goes. Most people's storage sheds don't have elevators and fibre optics.

    You didn't say anything about the $8-million barn. You didn't say anything about its function. You didn't say anything about how the cost reached $8 million. There's no accountability in any of that.

    Let's talk about the communications firm. Why does the Liberal government need a communications firm for an $8-million storage barn?

    Anybody can answer.

    Mr. Chair, unfortunately, I'm not able to provide an answer to that question, in terms of specific expenditures, because—again—they would have been part of the National Capital Commission.

    That's fair.

    Are they going to be conducting media interviews in the $8-million barn? Is that why? Perhaps the media would like to know how many tools are stored in the barn, or how many vehicles and the makes of the cars. This does not make any sense.

    If the two of you came here today to be held accountable, we are going to have to get some answers.

    Has either of you been inside the $8-million barn?

    I have not, Mr. Chair.

    What's in there? Have you seen pictures of the inside? What's inside of it?

    I have seen the picture you referenced before, sir. That's the picture I have seen. I have not had a chance to visit as of yet.

    Is there anything you can tell us about the $8-million barn that nobody else knows but the two of you? Is there anything you can inform us about? I asked you about contracts. You didn't know who got them. You knew that it was flexible, with less scrutiny than normally.

    What has the Treasury Board done to make certain this aligns with government priorities?

    Mr. Chair, as I've explained in the past, the corporate plan outlines the major activities undertaken by the NCC, or that they are planning to undertake. That plan was checked to see whether it was in line with the mandate of the Crown corporation and broader government priorities, and whether or not it was financially sustainable. As I said, we do not detail it project by project within corporate plans. There's a reason for that: so it respects the independence of the Crown corporations to manage their funds and budgets, in line with their own individual business requirements.

    Thank you for that.

    The Treasury Board is perfectly fine with it and feels it's a good expenditure that meets targets.

    Is that what you're saying here today?

    Again, the corporate plans are submitted by the responsible minister to the Treasury Board for consideration.

    With all due respect, there are no responsible ministers, as we've seen over and over dragged out through this committee.

    At any point in the project, did anyone in the Liberal government stop to suggest that maybe $8 million is too much to spend on a barn? If you want me to call it a storage shed, I will. I have one of those. It's not heated. It doesn't have Internet capabilities. It does have electricity. You can turn a light on in there. It certainly isn't worth $8 million.

    Did anyone ever stop to think that was too much money?

     I think the question you asked is whether the government did.

     Again, I think the National Capital Commission could let you know what information it provided during its work. As I indicated before, from an overall perspective and a corporate planning perspective, these are not detailed.

    Was there no way to build a storage facility—an $8-million barn facility—at Rideau Hall for less than $8 million? Should it have cost $8 million?

    Again, the National Capital Commission will be able to provide you with more answers. My understanding is that—

    Thank you for that.

    I'm curious to understand your opinions on the $8-million barn. Clearly, you're worried about a few processes. There's no accountability. I don't feel like there's any accountability for the $8-million barn.

    The public cannot understand how an $8-million barn, laced with private security, despite it being the most protected property, likely, in the city and maybe in Canada.... It already has RCMP and parliamentary policing. They had a private detail outside during the construction phase. They have an elevator and nobody knows where it goes. It costs $8 million—

    Thank you, Mr. Stewart. That is your time, I'm afraid.

    Mrs. Shanahan, you have the floor for five minutes, please.

    Thank you very much, Chair.

    Let me start by thanking the witnesses for being here today.

    We can see that you are doing your best to answer questions that, frankly, are not in your purview. The committee is looking forward to receiving Mr. Tobi Nussbaum, the CEO of the National Capital Commission, when he gets back from vacation. He is the one who will be properly able to answer these questions. We can ask our questions at that time.

    At the same time, it is educational for all members of the committee to get a better understanding of how the lines of accountability work. I appreciate some of the answers you gave earlier concerning the fact that the NCC submits a budget, but it's up to them to do the operational part of it.

    There's just one question I have concerning abatement. We know that when we're renovating existing buildings, very often there are problems. An environmental assessment has to be done. There are other issues that can arise that wouldn't arise with brand new construction.

    Mr. Ieraci, in your experience, what are some of those measures and why would they cost money?

    I mentioned that there were previous buildings there. Depending on the age of the building, there could be some abatement work that is necessary in terms of removing potentially hazardous materials. We know that some construction material that was used in the past is obviously no longer used, and it can be dangerous if it's not properly disposed of. From an abatement perspective, that would have been part of the preparation for the demolition work that had to be undertaken by the NCC prior to the construction of it.

    I also understand that there was soil contamination in some of the soil around the buildings. That needed to be remediated. Obviously, that would have to be considered and included as part of the expenditures for the new building.

     Those activities were undertaken by the National Capital Commission as part of getting the site ready in order to be able to do the construction.

    Thank you for that.

    Setting aside this project for the moment and speaking generally, what are the tools that PSPC uses to determine a fair price and do cost comparisons in a unique or stand-alone project? Can you give us some insight?

    Is that from a departmental perspective in terms of the procurements we undertake, or some of the activities that we would do as a department?

    I'm sorry. The reason I'm asking the question is that Crown corporations have different sets of rules from the ones for PSPC, which I'm not necessarily as familiar with. I just want to make sure I answer the question.

    It's for PSPC and where you see that there would be some commonality with Crown corporations. I'm going to get back to Crown corporations in a moment.

     My colleagues from the procurement branch would probably be able to provide a more definitive response, but there are two approaches. One is that procurements are typically done on a competitive basis and, through the competition, there is an incentive for bidders to ensure that the price they're submitting is going to be competitive, to increase the likelihood or chances of their being successful on it.

     In instances when there's something really unique, either because we're buying something that only one company has or because there's a specific geographic component, where what would be considered directed or sole-sourced contracts would come forward, within the department, we do have cost analysts who are able to undertake assessments of the proposed price to determine whether or not it represents fair market value in terms of what the company charges other preferred clients, and so on.

    Within the department, there are some activities and initiatives we have to be able to take a look at the question of value for money, as it's more commonly defined.

    Mr. Gear, I think you mentioned a couple of times that the NCC operates at an arm's length from the government. It's well known that prior to 2015, it was the minister at the time, John Baird, who personally controlled the NCC, but after 2015, that practice changed. Can you share your thoughts about why it's important that the NCC operates at an arm's length from the government?

    The decisions are made to set up Crown corporations, again, because of their unique mandates, responsibilities and activities. These unique mandates require a certain amount of flexibility in terms of their administration and management. For example, there are a number of Crown corporations that operate in a competitive environment, where there are certain sensitivities about what they can reveal and report, and there are certain limitations. That's a specific regime that applies to those types of Crown corporations.

    In the case of the NCC, again, it has its own accountability structures and policies, with a board of directors that is accountable through the responsible minister to Parliament. The NCC then undertakes its day-to-day operations under the oversight of that board of directors.

    There is reporting that is required of Crown corporations, so, as I mentioned, corporate plan summaries are submitted to Parliament. Annual reports are submitted to Parliament by the responsible minister every year. Also, there are a number of other reporting requirements that the Crown corporation undertakes through various other means, for example—

    I'm going to have to stop you there, because we're well over the time, but I appreciate it. You're welcome to come back to that at a future opportunity.

    Ms. Sinclair-Desgagné, you have the floor for two and a half minutes.

    Thank you, Mr. Chair.

    I have little hope of getting any answers today, but I'll nevertheless ask my questions and give it a try.

    The board of directors of the National Capital Commission approved the reconstruction project in the work area at Rideau Hall in 2019. The construction project was postponed at the request of the Office of the Secretary of the Governor General.

    Does either one of you know why the work was postponed, if the barn was in such a state that so much money had to be spent?

    Thank you for your question.

    I unfortunately don't know the reasons why the National Capital Commission decided to suspend or delay the project. I apologize.

    I see.

    Do you know whether “The Barn” is a designated heritage building?

    That's a good question. I don't know the answer. I'd say it's probably no, since it's a new construction, but I don't have a definitive answer.

    It's stated on the National Capital Commission website that the entire Rideau Hall complex is designated as heritage property.

    I'd like to know why you destroy a building in that complex and replace it with an expensive new building. Would you have any ideas about that?

    It's hard for me to answer that question. The only thing I could say is that I know that, in certain situations, the buildings are in such a state that it's hard or dangerous to try to keep them intact and usable. In this case, for operational and safety reasons, it's possible that they have to be demolished to make way for the construction of a new building, even though they're part of a complex considered as being of heritage importance. I know that's not something that anyone wants to do systematically, but sometimes it's necessary in certain situations.

     I have a point of order.

    Just a moment, please, Ms. Sinclair‑Desgagné.

    Go ahead on a point of order.

    I'm not sure, Mr. Chair, if it's a point of order, but I think it's important. There seems to be an awful lot of information on older, dilapidated buildings flowing from the two witnesses, but nothing on the barn.

    Mr. Stewart—

    We're here for the barn.

    Mr. Stewart, I appreciate that, but that is not a point of order.

    You have 20 seconds left, Ms. Sinclair‑Desgagné.

    I had 30 seconds left before that point of order.

    I'll allow it.

    Mr. Ieraci, in your experience, have you often seen this level of spending to preserve heritage buildings? In this instance, we aren't even preserving a heritage building but rather demolishing it and building a new one.

    I don't have a lot of experience or knowledge in the real estate construction business. To tell you the truth, I have no point of reference that would indicate to whether the total cost of nearly $8 million for this building was or wasn't an effective expenditure.

    When the NCC people testify before the committee, they'll be able to give you more details on the expenditures that have been made for that building and the reason why they were necessary.

    Thank you very much.

    Mr. Desjarlais, you have the floor for two and a half minutes. Go ahead, please.

    Thank you very much, Mr. Chair.

    I also want to thank the witnesses for being in attendance here.

     I fully recognize that the NCC is not present here and that many of the questions that are directed to you today should in fact be directed to the NCC. That's something my committee colleagues and I will have to take into consideration when thinking about next steps. It's something I think our chair will be able to follow up on.

    In relation to the source issue of this topic, I think this is about more than just this one barn—the one barn doesn't operate in isolation. At least, to me, it's about the process and procedure and how, for example, Public Services, the Treasury Board and the NCC interact with one another in order to create, oftentimes, what are cycles of mistrust that Canadians feel in this process, whether with a Liberal or a Conservative government. This has been going on for a long time.

    A similar controversy took place when Stephen Harper was Prime Minister and it was his own residence that was contemplated at the time, the Prime Minister's residence. Now, of course, we both know it's not being used. So there are risks to politically motivated decisions when it comes to NCC's processes of taking in information and attempting to reconcile it later on. We often see higher costs.

    I think there's a larger issue here that stems from the transparency, the trust and the efficacy of spending related to these kinds of projects. That's, I think, what will be of most importance to me as a member moving forward. I think that's probably where we should focus most of our time if we want to actually build trust and if we want to actually do the work of holding Canada's institutions accountable for these kinds of expenditures.

    I'd like to give a moment to both of you gentlemen present here to talk about how we can strengthen transparency and accountability, from your perspective, from your roles and from your experience, and how we can avoid a situation like this, in which the public perceives such a great level of mistrust in these types of expenditures, whether they're for this or for the official opposition's residence, Stornoway, for example, which continues to build up charges to the taxpayers.

    One thing I will say is that it has certainly not gone unnoticed that Parliament has made more and more requests for greater transparency on the part of Crown corporations. I will note that we have been working with Crown corporations to try to enhance reporting and transparency. For example, we have been asking Crown corporations to report more on a number of government priorities, such as diversity and inclusion, as well as on greening operations and the environmental and sustainable development goals. So efforts have been made and there will be continued efforts to further enhance the reporting by Crown corporations.

    There are a lot of things that need to be considered as we look at measures to enhance transparency. As I mentioned, some of these Crown corporations do function in a competitive environment, and there are certain restrictions in terms of the information that can be disclosed. We are continuing to work on that with Crown corporations and we respect the obvious desire of parliamentarians to have greater information.

     Thank you very much.

    Mr. Nater, you have the floor for five minutes, please.

    Thank you, Chair.

    Thank you to our witnesses.

    I will maybe start by pointing out that the NCC does have a lot to answer for. I do look forward to hearing from Mr. Nussbaum of the NCC. Of course, we all will remember that he was the infamous Ottawa city councillor who quit days after the 2018 municipal election, triggering an expensive by-election here in the city of Ottawa. I guess we know where his care for taxpayer dollars comes from. We look forward to hearing from the current CEO and former Liberal Party donor Mr. Nussbaum when he comes to committee, hopefully, when he gets back from vacation. We're looking forward to that.

    I'll start by saying, as a farm kid from Logan Township, that $8 million for a barn, a shed or a storage facility just boggles my mind. When we can hear quotes from contractors talking about maybe $120 or $150 per square foot, and then we hear somewhere in the neighbourhood of $930 per square foot, it obviously boggles the mind for folks who are in the business of contracting out. It “barn-doggles”, as my friend Mr. Stewart would say.

    I'm new to this committee, so forgive me if some of my questions may seem rudimentary or are just scratching the surface.

    Mr. Gear, I understand there's a directive on the management of projects and programs through the Treasury Board Secretariat. Could you confirm whether or not the National Capital Commission is subject to that directive?

    Thank you for the question, Mr. Chair.

    As a Crown corporation, they are not subject to that particular directive.

    Would you be aware of whether or not there was an organizational project management capacity assessment done at the National Capital Commission?

    I don't have that information, myself.

    Mr. Ieraci, I have a similar question for you. Do you know whether or not there was an organizational project management capacity assessment completed?

    For the National Capital Commission, I don't have the answer to that question.

    Would you be aware of the project complexity and risk assessment tool that the Treasury Board Secretariat has implemented, where each project is subject to such an assessment?

    Do you mean for Public Services and Procurement Canada?

    Yes.

    Yes, within our department, we are subject to that policy. We have mechanisms in place, particularly on our real property side, in terms of project management. All projects are assessed based on risk and so on.

    At PSPC, what is your OPMCA assessment level?

    I'd have to come back to you on that one. I don't remember if we're a three or a four.

    This is an area that's way outside my expertise, but we do have an OPMCA that's been approved by the Treasury Board Secretariat.

    Absolutely. PSPC, at a level three or four, is able to deal with very high levels of complexity for projects, I would be led to assume. Four is obviously the highest and three is the second highest, so PSPC could obviously undertake very complex projects.

    Yes. Members of this committee, as well as members of “the mighty OGGO”, as I believe the chair refers to it, often get to hear about the various activities that Public Services and Procurement Canada does in a number of areas, including real property, digital services and Receiver General functions.

    We have numerous business lines. Because of that, as a department we obviously need to have fairly strong approaches in terms of project management as well as risk management and all the other things. We abide by the Treasury Board policies and directives.

    Let's go back to Mr. Gear for a moment, as the executive director of the centre of excellence for Crown corporations.

    We know that the base class for the OPMCA is that...where there's no OPMCA class level, it's a $2.5-million project base without a PCRA. Obviously, if we're talking about the NCC, which does not have an OPMCA—it does not have that specific expertise—anything over a $2.5-million base project would have to go for Treasury Board approval.

    From a centre of excellence standpoint, do you find it concerning that an organization like the National Capital Commission, which doesn't have this assessment done for its project management capacity, is able to go ahead with an $8-million project without that oversight and without that expertise in project management? That's for an $8-million project that seems to be, for all intents and purposes, far overpaid for what was received.

    Is that a concern at the Treasury Board centre of excellence?

    What I can say, Mr. Chair, is that, as I explained, Crown corporations are not subject to Treasury Board policies and directives—

    Well, that's my concern—

    However, as a best practice, we do encourage Crown corporations to adopt their own policies and procedures that are similar to the ones that we have in place as part of the Treasury Board policies.

     I'm afraid you're out of time, Mr. Nater, but I think you have your next line of questioning lined up.

    Mr. Blois, you have the floor for five minutes, please.

    Thank you very much, Mr. Chair.

    Listening and watching this committee today, I think it's a bit of a microcosm of why we are one of the few G7 countries in the world that, as I understand it, have not been able to actually replace the residence of whoever occupies the Prime Minister's Office.

    I want to qualify my comments. Of course, there has to be a role for scrutiny in the role of Crown corporations or government agencies in terms of reinvesting in infrastructure. That is important not only for democracy and for our national heritage, but also for the function of government here in the national capital region.

    However, just listening to the line of questions.... Again, scrutiny is fine, but it's no wonder that we can't actually upgrade some of the really important institutional buildings in our corporate memory and in our history in this country, just seeing the motion and the line of questioning as a result of that.

    Just for Canadians at home who are watching.... Mr. Gear, the National Capital Commission was an organization set up independent of government, to be responsible for how many different buildings and what types of buildings in Ottawa? Can you explain that for Canadians?

    I don't have the exact number of buildings. I know that it's the largest landowner in the region, by far, in terms of the volume of area. There are probably dozens of buildings.

    I don't know whether Mr. Ieraci might have more specific numbers.

    I don't have specific—

    That's okay.

    Essentially, there are buildings that the National Capital Commission has purview over and that relate to Canada's history as it relates to some functional buildings that are still used, whether that be by the Governor General, by the leader of the official opposition, by the Prime Minister, etc. Is that fair to say?

    I would agree with that, Mr. Chair.

    Okay.

    Do you have an estimated number for what the budget is on an annual basis for the National Capital Commission?

    I have the numbers for 2021-22. Its budget was $239 million in total.

    With regard to the questions that I've heard my colleagues ask, I think it's fair.... To be fair to you as officials who are not directly responsible for the National Capital Commission, we'll look forward to the opportunity to ask for specifics about this particular storage shed at Rideau Hall, but we're talking about an $8-million expenditure on a roughly $250-million budget.

    Again, I think there could be qualifications made about why it is that the specific project needed to be funded in this fashion and about different elements—that's all fair game—but at the end of the day, the government itself is not directly involved in making these allocations. I presume that when the budget is allocated to the National Capital Commission, it is expected to follow its own policy guidelines, which, hopefully, would be somewhat similar to those of the Treasury Board. However, it is independent and trying to be at arm's length from partisan considerations about how we actually go about reinvesting in these buildings.

    Is that fair?

    Mr. Chair, I would generally agree with the observation that this is the reason why the NCC was originally established and that, again, it is responsible for making the day-to-day decisions on how it spends within its budget, as long as it is in line with its mandate and the corporate plan and priorities that have been approved by Treasury Board.

    I really appreciate that because, again, at the end of the day, I want Canadians to understand. I see, sometimes, videos from politicians gaslighting this issue. It's a challenging time for Canadians right now; I know that as well. In my own constituency, people are facing difficult decisions. There is a requirement for either Crown corporations or governments themselves to reinvest in properties. Perhaps there are instances—and this may be one—where there's an ability to re-examine. However, I think that we, as parliamentarians, have to be careful not to take a look at a particular expenditure and just simply suggest that it was coming from the wrong intent or that it was not necessarily a capital reinvestment that is crucial to the functioning of government.

    I take Ms. Sinclair-Desgagné's point. Ideologically, she doesn't believe in the role of the Governor General. However, at the end of the day, that is Canada's constitutional requirement, and we want to have facilities that actually support the role, that support our constitution in this country. I think we have to be careful not to just make ad hoc statements that somehow there's an abuse of power or that these expenditures were not justified.

    Mr. Chair, I see that I'm coming close to the end of my time. I appreciate that the officials were able to provide, hopefully, some clarity to Canadians about this process.

     Thank you, Mr. Blois.

    Gentlemen, I appreciate your coming in today. I'm now going to suspend this meeting. You're both excused. We have some in camera business work that we'll set up, but we appreciate you both coming here today. Regarding the information that was requested, could you have that submitted to the committee as soon as possible? Thank you very much, both of you.

    [Proceedings continue in camera]