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37th PARLIAMENT, 3rd SESSION

Standing Committee on National Defence and Veterans Affairs

EVIDENCE

CONTENTS

Tuesday, May 11, 2004

1530

The Chair (Mr. Pat O'Brien (London—Fanshawe, Lib.))

Ms. Olga Massicotte (Chief Executive Officer, Canadian Forces Housing Agency, Department of National Defence)

Colonel Denys Guérin (Director, Quality of Life, Department of National Defence)

1535

Ms. Olga Massicotte

1540

1545

1550

The Chair

Col Denys Guérin

The Chair

Col Denys Guérin

The Chair

Mr. Jay Hill (Prince George—Peace River, CPC)

1555

Ms. Olga Massicotte

Mr. Jay Hill

Ms. Olga Massicotte

Mr. Jay Hill

Ms. Olga Massicotte

Mr. Jay Hill

Ms. Olga Massicotte

Mr. Jay Hill

Ms. Olga Massicotte

Mr. Jay Hill

1600

Ms. Olga Massicotte

Mr. Jay Hill

The Chair

Col Denys Guérin

The Chair

Col Denys Guérin

The Chair

Mr. Claude Bachand (Saint-Jean, BQ)

Ms. Olga Massicotte

1605

Mr. Claude Bachand

Ms. Olga Massicotte

Mr. Claude Bachand

Ms. Olga Massicotte

Mr. Claude Bachand

Ms. Olga Massicotte

Mr. Claude Bachand

Ms. Olga Massicotte

Mr. Claude Bachand

Ms. Olga Massicotte

Mr. Claude Bachand

1610

Ms. Olga Massicotte

Mr. Claude Bachand

Ms. Olga Massicotte

Mr. Claude Bachand

The Chair

Mr. John O'Reilly (Haliburton—Victoria—Brock, Lib.)

Ms. Olga Massicotte

1615

Mr. John O'Reilly

Ms. Olga Massicotte

Mr. John O'Reilly

Ms. Olga Massicotte

Mr. John O'Reilly

Colonel Claude Rochette (Director General, Compensation and Benefits, Department of National Defence)

Mr. John O'Reilly

Col Claude Rochette

Mr. John O'Reilly

Mr. Bob Wood (Nipissing, Lib.)

Mr. John O'Reilly

The Chair

Mr. Bob Wood

Mr. John O'Reilly

Mr. Bob Wood

Ms. Olga Massicotte

Mr. Bob Wood

Ms. Olga Massicotte

1620

Mr. Bob Wood

Ms. Olga Massicotte

The Chair

Mrs. Cheryl Gallant (Renfrew—Nipissing—Pembroke, CPC)

Col Denys Guérin

Mrs. Cheryl Gallant

Ms. Olga Massicotte

Mrs. Cheryl Gallant

Ms. Olga Massicotte

Mrs. Cheryl Gallant

Ms. Olga Massicotte

Mrs. Cheryl Gallant

Ms. Olga Massicotte

1625

Mrs. Cheryl Gallant

Ms. Olga Massicotte

Mrs. Cheryl Gallant

Ms. Olga Massicotte

Col Claude Rochette

The Chair

Mr. Janko Peric (Cambridge, Lib.)

Col Denys Guérin

1630

Mr. Janko Peric

Ms. Olga Massicotte

Col Claude Rochette

The Chair

1635

Col Denys Guérin

The Chair

Col Denys Guérin

The Chair

Mr. Jay Hill

Col Denys Guérin

Mr. Jay Hill

The Chair

Ms. Olga Massicotte

The Chair

Mr. Claude Bachand

Ms. Olga Massicotte

Mr. Claude Bachand

Ms. Olga Massicotte

Mr. Claude Bachand

1640

Ms. Olga Massicotte

The Chair

Mr. John O'Reilly

Ms. Olga Massicotte

Mr. John O'Reilly

Ms. Olga Massicotte

Mr. John O'Reilly

Ms. Olga Massicotte

Mr. John O'Reilly

Ms. Olga Massicotte

Col Denys Guérin

Mr. John O'Reilly

1645

Ms. Olga Massicotte

Mr. John O'Reilly

The Chair

Mr. John O'Reilly

Col Denys Guérin

Mr. John O'Reilly

Col Denys Guérin

Mr. John O'Reilly

Col Denys Guérin

The Chair

Mr. Jay Hill

1650

Col Denys Guérin

Mr. Jay Hill

Ms. Olga Massicotte

Col Denys Guérin

Mr. Jay Hill

Ms. Olga Massicotte

Mr. Jay Hill

Ms. Olga Massicotte

Mr. Jay Hill

The Chair

Mr. Jay Hill

Ms. Olga Massicotte

Mr. Jay Hill

Ms. Olga Massicotte

Mr. Jay Hill

The Chair

Ms. Olga Massicotte

1655

The Chair

Ms. Olga Massicotte

The Chair

Mr. Murray Calder (Dufferin—Peel—Wellington—Grey, Lib.)

Ms. Olga Massicotte

Mr. Murray Calder

Ms. Olga Massicotte

Mr. Murray Calder

Ms. Olga Massicotte

Mr. Murray Calder

Col Denys Guérin

Mr. Murray Calder

Ms. Olga Massicotte

1700

The Chair

Ms. Olga Massicotte

Mr. Murray Calder

The Chair

Mr. Claude Bachand

Col Denys Guérin

Mr. Claude Bachand

Ms. Olga Massicotte

Mr. Claude Bachand

Ms. Olga Massicotte

Mr. Claude Bachand

Ms. Olga Massicotte

Mr. Claude Bachand

Ms. Olga Massicotte

Mr. Claude Bachand

Ms. Olga Massicotte

Mr. Claude Bachand

Ms. Olga Massicotte

1705

Mr. Claude Bachand

Ms. Olga Massicotte

Mr. Claude Bachand

Ms. Olga Massicotte

Mr. Claude Bachand

The Chair

Col Denys Guérin

The Chair

Col Denys Guérin

The Chair

Hon. David Price (Compton—Stanstead, Lib.)

Ms. Olga Massicotte

Hon. David Price

Ms. Olga Massicotte

1710

Hon. David Price

Ms. Olga Massicotte

Hon. David Price

The Chair

Mrs. Elsie Wayne (Saint John, CPC)

The Chair

1715

Col Denys Guérin

Ms. Olga Massicotte

Mrs. Elsie Wayne

Mr. Jay Hill

The Chair

Mrs. Elsie Wayne

The Chair

Ms. Olga Massicotte

The Chair

Mr. Rob Anders (Calgary West, CPC)

Ms. Olga Massicotte

Mr. Rob Anders

Ms. Olga Massicotte

1720

Mr. Rob Anders

Ms. Olga Massicotte

Mr. Rob Anders

Ms. Olga Massicotte

Mr. Rob Anders

Ms. Olga Massicotte

Mr. Rob Anders

Ms. Olga Massicotte

Mr. Rob Anders

Ms. Olga Massicotte

Col Denys Guérin

The Chair

Mr. Jay Hill

Ms. Olga Massicotte

Mr. Jay Hill

1725

Ms. Olga Massicotte

Mr. Jay Hill

Ms. Olga Massicotte

Mr. Jay Hill

Col Denys Guérin

The Chair

Ms. Olga Massicotte

Mr. Jay Hill

Ms. Olga Massicotte

Mr. Jay Hill

The Chair

Mr. Jay Hill

The Chair

Ms. Olga Massicotte

The Chair

CANADA

Standing Committee on National Defence and Veterans Affairs

NUMBER 013

3rd SESSION

37th PARLIAMENT

EVIDENCE

Tuesday, May 11, 2004

[Recorded by Electronic Apparatus]

¹ (1530)

[English]

The Chair (Mr. Pat O'Brien (London—Fanshawe, Lib.)): I would like to call to order the 13th meeting of the Standing Committee on National Defence and Veterans Affairs.

Today, at the committee's request, we are going to have a briefing by DND. I'm pleased to welcome Olga Massicotte, chief executive officer of the Canadian Forces Housing Agency; Colonel Claude Rochette, director general,compensation and benefits; and Colonel Denys Guérin, director,quality of life. Welcome to all of you.

Ms. Massicotte.

Ms. Olga Massicotte (Chief Executive Officer, Canadian Forces Housing Agency, Department of National Defence): Thank you, Mr. Chairman.

Mr. Chairman and members of the Standing Committee on National Defence and Veterans Affairs, good afternoon, and thank you for inviting us to be here today. It's a real pleasure for us to have this opportunity to answer your questions about residential housing in the Canadian Forces and to thank you for your continued interest.

I recognize that your concerns centre on rent and health issues. Mr. Chairman, I will discuss rent issues later. But I wish to reassure you and the members of the committee that our primary concern is health and safety. I can assure you, Mr. Chairman and committee members, that no occupant is exposed to hazards, including lead or asbestos, and further, any problems or complaints concerning health and safety are dealt with immediately.

I wish to thank you, Mr. Chairman and members of this committee. The focus you've brought to the terms and conditions of many facets of military life served as the initial catalyst for many improvements to the military compensation package. These improvements in turn have enabled the department to modernize the accommodation policy to be consistent with Treasury Board direction. My colleague Colonel Denys Guérin will speak to that in a moment, and Colonel Rochette will also be available to answer any questions you have about the compensation issues.

We'd like to begin the session with some introductory remarks to explain the policy foundation for the provision of government-owned and -leased residential housing. I will then provide you with a brief overview of the current state of our housing portfolio, the actual rent-setting process, our ongoing maintenance activities, and our future portfolio plans. Again, as I said, we'd be pleased to answer your questions.

I'll now pass it over to Colonel Guérin to speak about the accommodation policy.

Colonel Denys Guérin (Director, Quality of Life, Department of National Defence): Thank you.

Mr. Chairman and members of the committee, good afternoon.

The basis for the Canadian Forces accommodation policy and regulations is the Treasury Board isolated posts and government housing directive. This directive specifies that it is the policy of the Government of Canada that occupants of government housing be accorded treatment equivalent to that accorded to persons renting similar accommodation from private or commercial sources. Rents for government housing must be fair and equitable and shall be comparable to those paid for a dwelling of similar size and condition in similar markets. This is the reason the rent charged to the 20% of Canadian Forces personnel who live in crown residential housing is equivalent to that charged for similar housing in the market, where 80% of our people reside.

The second fundamental element of the government policy is the rationalization of crown-owned or -leased accommodation. Specifically, crown residential accommodation is only to be provided where there is a clear deficiency in the private sector supply of suitable accommodation.

In the March 2004 Treasury Board decision on the designation of the Canadian Forces Housing Agency as a special operating agency, it was quite clear that the Canadian Forces intervention to provide crown-owned or -leased residential accommodation will only be undertaken when the market is unable to satisfy the Canadian Forces needs, and not for affordability purposes.

The Treasury Board directive is the foundation for our Canadian Forces regulations and accommodation policy and for our vision for the future, of which you have a copy in front of you.

In both our policy and strategic vision, we affirm our commitment to ensure that the Canadian Forces members are able to secure accommodation that is suitable to personal circumstances at any location where duty demands. To maximize freedom of choice, we encourage CF members to secure accommodation in the private sector marketplace. But in those instances when the private sector marketplace cannot meet the needs of the Canadian Forces member, we will provide crown housing. Our goal is to ensure that Canadian Forces members can find the right accommodation at the right place and at the right time, accommodation that is suitable, available, and affordable.

¹ (1535)

In a moment, Madam Massicotte will say a few words about suitability and availability and about the rent-setting process. With respect to affordability, from a policy perspective, notwithstanding the government directive that we must charge market rent for crown-owned or -leased residential housing, affordability is measured against a 25% threshold value of gross family income for shelter.

We realize that in certain locations, market value rents may be quite expensive for our junior non-commissioned members and officer cadets. Therefore, where the shelter charge, excluding utilities, exceeds 25% of the family income, the member may apply to have the rental rate reduced to this value.

Mr. Chairman and members of the committee, this committee's report of October 1998 on the quality of life in the Canadian Forces charged the Department of National Defence with ensuring that Canadian Forces members are able to obtain safe and suitable accommodation wherever they serve. CF members and their families expect and deserve accommodation support programs that meet their evolving needs. Our accommodation policy and our vision recognize that our members should decide where they and their families wish to live. One of the choices is crown residential accommodation.

I'd like to return the microphone to Madam Massicotte, who can explain how rent is determined and applied, and who can provide a brief synopsis of the current state of the housing portfolio and the plan to improve the housing.

Thank you.

Ms. Olga Massicotte: Thank you, Colonel Guérin.

Mr. Chairman, as you are aware, DND determined in 1995 that the establishment of a special operating agency within the department would be the most efficient and effective way of managing the DND crown housing portfolio. At that time, the Canadian Forces Housing Agency inherited a large and very aged housing stock. Shelter charges were not applied consistently, and there were large variations between the shelter charges for married quarters and the average market value for similar housing in the community. For example, the difference between a married quarter and market rents in Esquimalt was over $700 a month. Nevertheless, Treasury Board and Department of National Defence policy dictated that the agency implement changes to move toward the Canada Mortgage and Housing Corporation appraised market values.

In order to deal with large variances in shelter charges and to protect occupants who were financially stressed, the agency asked the Treasury Board to allow National Defence to implement a reduced phasing approach that would cap annual rent increases at $20, $30, and $35 a month, depending on family income. Treasury Board approved this special program, and the agency then proceeded to apply this phasing. This also allowed us to regulate and standardize the shelter charge system across Canada, including in the rent control provinces of Ontario and Manitoba.

By 2001 the reasons that gave rise to the special phasing measures no longer existed. In the intervening period, CF personnel saw significant adjustments to their compensation and benefit packages by means of pay raises and the introduction of the post living differential, which was introduced in 2000. Treasury Board therefore saw no reason to extend the special measures. Rent adjustments continued, to a normal Treasury Board maximum of $100 per month in any given year. These continue to this day as part of our annual rent review cycle, as there remain a number of our occupants whose rent is still being phased up to market values, particularly, as I mentioned, in the rent control provinces.

As Colonel Guérin has explained to you, the DND accommodation policy and therefore the rent-setting process are both driven by Treasury Board policy. To determine up-to-date market rents for CF family housing, the Canada Mortgage and Housing Corporation establishes market rent appraisals for specific benchmark married quarters at all of our Canadian Forces sites. These benchmark units are selected by National Defence and comprise a representative sample of the units available at that location. For instance, last year we asked Canada Mortgage and Housing to appraise 800 units, which represent the benchmarks for the 4,000 rental values we have across the portfolio. This represents a 20% annual review of the occupied portfolio.

The Canada Mortgage and Housing Corporation appraisers research the local real estate market both inside and outside the subject community or area. Data collection incorporates the supply and availability of rental properties, turnover and vacancy rates, terms and conditions of leases, and any other factors that may influence the market in that particular community. The appraisers then estimate the degree of similarity or difference between our benchmark married quarters and comparable rental properties by considering various elements such as location, noise factors, proximity to schools, community facilities, and other amenities. They also look at market conditions and physical characteristics, such as size, style, age, parking, and overall condition of the unit. This annual review ensures that our married quarters shelter charges are always current and move with the cycles in the local housing markets, be they up or down.

The assessments provided by Canada Mortgage and Housing Corporation are reviewed by the agency and challenged where appropriate. They are not taken at face value.

¹ (1540)

The agency often completes further adjustments downward where warranted to account for additional maintenance factors. For instance, there are several condition-related factors, such as the propensity for wet basements, found in parts of our Winnipeg site, that are not included in the Canada Mortgage and Housing Corporation appraisal. The agency then applies these benchmark values to our portfolio. In no case is the CMHC appraisal adjusted upward. The benefit is always given to the occupant.

I wish to make it clear that the appraisal factors fully account for property attributes such as building size, location, number of bathrooms, parking, air conditioning or the lack thereof, porches and additions, whether there is a basement and whether it's finished, whether there are fireplaces, the quality of the plumbing fixtures, the construction quality, the year built, the condition and design of the unit, the type of lease, etc. I assure you, Mr. Chairman and members of this committee, that the appraisal process is a fair comparison of units and fully accounts for their age and condition and the amenities that are included with each unit in each location.

Furthermore, the Canadian Forces member who considers living in a house managed by the agency receives all of this information related to the assessment of their rental charges before they move in and again with each annual review. At this time, apart from Ontario and Manitoba, where rent controls apply, most occupants throughout the rest of Canada pay a rent that is at or very close to market rent levels. I should also point out that there were six locations last year where the average appraised level decreased and many occupants saw a reduction in their rent levels.

I'd like now to address the quality of the housing we offer to Canadian Forces members. I'd like to emphasize again, Mr. Chairman, that the health, safety, and security of the roughly 12,000 occupants in our portfolio is and remains our primary concern. Contrary to what has been reported in the press, our occupants are not exposed to hazardous substances, and we respond immediately to any health, safety, and security issue that's brought to our attention.

Since 1998 the department has spent over $400 million to address health and safety issues, on regular and programmed maintenance, and on other projects in order to bring the units up to contemporary standards. Projects such as the replacement of roofs, windows, doors, siding, and insulation, the installation of smoke detectors, and accessibility upgrades comprise two-thirds of this expenditure. Our day-to-day maintenance activities, which include 24-hour emergency response and other programmed life cycle activities, such as the replacement of obsolete furnaces, comprise the remainder. I should add that in the course of performing our daily repairs, planned upgrades, or renovation projects, we ensure that our contractors fully comply with all federal and provincial regulatory requirements. Further, our inspectors follow Canada Mortgage and Housing Corporation and Health Canada best practices with regard to environmental and indoor air quality issues.

Mr. Chairman, $400 million is a lot of money, but that really only translates into an accumulative investment of less than $20,000 per unit. When you consider the cost of a typical roof, furnace, or insulation, it doesn't take long to reach this amount. At this time, half of our occupied units have new roofs and new insulation, two-thirds have new furnaces, and three-quarters have new doors and windows.

Maintenance moneys also include the significant sums we invest every year in the 30% turnover of our 12,000 occupants. We spend on average $2,800 repairing and preparing each unit as part of this annual posting turnover. We recognize that we have a duty to provide safe and suitable accommodation, and we continue to invest in preventive maintenance and upgrade activities.

¹ (1545)

I would also note that the agency's health, safety, and security repair program, which was instituted in 1998 at the behest of this committee, was audited in 2002 by KPMG on behalf of the chief of review services in National Defence. This study found that over the four years surveyed, delivery mechanisms for the program were functioning well and a good deal of progress had been made toward our goal of rectifying or preventing health, safety, and security risks to our occupants.

We have worked diligently to address the state of the portfolio, but we recognize, as did this committee in its 1999 interim report, that maintenance is not the solution to the housing problems that confront the Canadian Forces. We need to continue to invest in health and safety, but we also need to have a more comprehensive plan for the renewal of the portfolio.

In keeping with the 1999 recommendation that we proceed with the best way of providing modern and environmentally efficient married quarters, I'm pleased to report that we have developed and received Treasury Board approval for a rationalization framework that will allow us to do just that. The goal of this initiative is to develop and maintain a contemporary sustainable housing portfolio that meets the housing needs of our CF families and is responsive to evolving and cyclical change.

Our renewal efforts commenced this year with approximately 190 major whole-home renovations, comprised of complete upgrades to contemporary standards at nine different sites across Canada. This is just the first step in our long-range plan. Over the course of the next 20 to 25 years, we will completely contemporize the portfolio. In addition to these whole-home renovations that we are currently getting underway, we are also exploring partnerships with public and private sector developers, seeking opportunities for innovation in meeting the housing needs of our CF members.

Throughout all of our activities, the agency will continue to evolve and adapt as the Canadian Forces composition and tasking evolve. This means being where we are needed today, but also being in a position to respond to changing needs over the next several decades. We will continue to provide trusted and valued housing services to military members, wherever the need may be.

Thank you, Mr. Chairman.

¹ (1550)

The Chair: Thank you all very much.

Just before we go to questions and because of events that we're all anticipating, I'd like to note that two long-time members of this committee, strong advocates for the Canadian Forces--and as it happens, one from each side of the table--are not contesting in the next election, whenever that might happen. They are Mrs. Wayne and Mr. Wood. So on behalf of the whole committee, I want to recognize these two members. Mrs. Wayne is of course the defence critic, an appropriately aggressive and dedicated one, and Mr. Wood served as parliamentary secretary for the Minister of Veterans Affairs. I think they are good examples of the non-partisan spirit that generally prevails at this committee. On behalf of the members, I want to congratulate them, thank them, and wish them the very best in their future endeavours.

Some of us hope to be back. Hopefully, we'll continue the good fight at this committee and others.

The second item is a clarification. All the witnesses referred to the quality of life report. The two members I just mentioned and several others were on this committee at that time. I was honoured to become chair partway through that process. Most of that work was chaired by my colleague Mr. Robert Bertrand. It was quite a voluminous report. I remember cheering it in the House. It had a number of recommendations. I remember specifically my colleague Mr. Price insisting--and it was very easy to convince the committee on both sides--that there be regular reporting back. This report was well received by the Canadian Forces right across the country. That's what they told me. The government quickly enacted most of it, which is rare. It had bipartisan support, which was good.

How often are you reporting back on the housing situation and other issues? Is there any regularity to that? That is exactly what this committee sought at that time. Perhaps you can help me with that, and then we'll go to questions.

Col Denys Guérin: As one of my functions as a director for quality of life, I'm responsible for reporting to SCONDVA on those particular recommendations. I provide that report on an annual basis. That is reported through the Chief of Defence Staff.

The 2003-2004 report has not been finalized as far as I know, but it will be coming back to the committee here in the near future, I would think. But the report has been done, and I do it on an annual basis.

The Chair: Annually at roughly what time of year?

Col Denys Guérin: In January. We start collecting the information around the November timeframe because we also have to collect the information from other government departments, specifically Veterans Affairs. It does take a little bit of time to work through the various staff. We do that before Christmas and then we're ready after Christmas.

The Chair: I appreciate that, because this was a great concern of the committee at that time, and it allows members like us to keep up to speed on that on an ongoing basis.

I thank you for being here. We wanted this special briefing today.

Now I want to go to members for, I'm sure, a number of questions. We'll start with Mr. Hill for seven minutes, please.

Mr. Hill.

Mr. Jay Hill (Prince George—Peace River, CPC): Thank you, Mr. Chairman.

Welcome to the committee.

Madam Massicotte, you paint a better picture certainly than what I've heard from a lot of individuals and from what I've experienced and seen with my own eyes. Of course I guess that's probably part of your job, to paint a good picture for your agency.

I'd love to have the same twenty minutes you had to make a lengthy statement outlining all of the concerns that have been forwarded to my office by our men and women in the military and by their extended families that are obviously concerned about them.

You say in your opening remarks that the concerns are dealt with immediately. I've had a number of people say yes, they're dealt with immediately, but too often the first reaction from the housing agency is to say no.

In preparation for today I talked to the ombudsman's office and received some raw data from there. Since January 2002 they've received some 95 complaints concerning CFHA. A little over half—about 50 of them—were concerning rent or substandard conditions. Some of them were quite serious, such as mould in homes, and that's been reported in the press as well, and bats in the attic—those types of things.

Obviously there's a bit of a disparity, not only from what you've tried to present to the committee this afternoon, but also from reports coming to us or reports in the media and indeed from concerns being expressed directly to the Canadian Forces ombudsman.

I have a number of questions I would like to try to get in, so I would ask, if possible, where I'm just asking for a number or something like that, that you keep your answer as brief as possible so we can try to get as many of them in, because you can see there are a lot of colleagues and I'm sure they all have questions and I might not get another chance.

You say there are 12,000 occupants who are currently in housing. Just so that I can clarify, is that men, women, and children, or is that 12,000 units that have people in them?

¹ (1555)

Ms. Olga Massicotte: It's roughly 12,000 units.

Mr. Jay Hill: Okay. I've been told—and I don't know whether this is true, and that's why I'm asking.... What is the annual rent that CFHA collects in total across Canada? How many bases is it? I've been told the figure is $77 million. I don't know whether that's accurate or not.

Ms. Olga Massicotte: Yes, that's reasonably close to the net revenues. Our rental charges, if we didn't mitigate them, would amount to over $83 million, but because of a number of adjustments that we make downward, yes, our net collections are in the range of $77 million.

Mr. Jay Hill: Okay. My understanding is that according to the quality of life report the chairman and you referred to, this money is supposed to be spent on either maintenance or improvements to the homes. Is that indeed the case? I asked the minister about this issue fairly recently in the House of Commons. I think it was last week—we lose track of time around this place. In reference to the question, if memory serves me correctly, the minister quoted a number of $120 million that is going to be spent over the next three years. Doing the math, that would lead me to believe it's $40 million per year on improvements to the homes.

I think you referred to a plan, a rationalization formula. I don't even want to get into what that bureauspeak might actually encompass, because I'm sure you could go on for quite some time trying to explain what a rationalization formula is. But you can see where I'm going with this. He said $40 million a year. If it's $77 million, or whatever the number is, is that the total amount that's spent to maintain and improve and make changes and improvements to the homes?

Ms. Olga Massicotte: Sir, the $120 million is the amount we are planning to spend specifically on the renewal of the portfolio. That doesn't include all of the moneys we will be spending on ongoing maintenance and operation of the portfolio and moving the CF members in and out.

Mr. Jay Hill: Would it be fair to say that the $40 million is part of the $77 million, and $77 million is total, or is the $40 million going to be added to the $77 million?

Ms. Olga Massicotte: It's part of the $77 million.

Mr. Jay Hill: Whatever we take in in rent, no matter how we talk about it, whether supposedly this minister makes an announcement of about $120 million, really that's just part of the annual rent that's taken in and then spent to maintain the homes.

Ms. Olga Massicotte: All of the money that is received in rental revenues is reinvested into the portfolio. In addition to that, I failed to note earlier that National Defence has allotted an additional $15 million out of the DND operating budget per year to supplement our rental revenues so that we can reinvest in the upgrading of the portfolio.

Mr. Jay Hill: I've been on bases. I think I've mentioned to you when we were talking just before the committee started to sit today that when I'm living in Ottawa I live just a half a block behind Rockcliffe base. I have the opportunity to go for a walk every once in a while in the evening, and I walk through the base. I can tell you that many of the homes there are in a deplorable state. Shingles are all curled up and wrinkled. As hard as it is for me to believe, there's actually a home there—I don't know if there's more than one—that I've seen where obviously the roof was leaking and they replaced the bottom six rows of shingles. That's all they did, the bottom six rows. The rest of the shingles weren't replaced. I've never seen that happen, ever, in the private sector that somebody wouldn't replace all the shingles on a roof. It leads me to believe, as I said earlier, the situation isn't quite as rosy as you would like to paint.

I also noticed that many houses there are abandoned, and many have been torn down. On other bases--I was just in Trenton last week--a lot of houses are sitting empty. My understanding is there are about 16,000 units, and you say 12,000 are occupied. So are there 4,000 that are sitting either emptied or abandoned or condemned?

º (1600)

Ms. Olga Massicotte: There are about 4,000 of our housing units that are slated for disposal because as part of our rationalization framework we have determined that there isn't an ongoing need for them. So yes, we are slowly divesting ourselves of those units and doing an ongoing review of the needs so that we only maintain as much as we absolutely need to.

In the case of Rockcliffe, in 1995, you will recall, it was slated as one of the locations that was to be a strategic disposal of crown housing. So that is why some of the units are in a less viable state of repair than others. For those we are not continuing to do major upgrades, but we will do responsive maintenance as long as there are occupants.

Mr. Jay Hill: I guess I'm just about out of time.

I want to squeeze in a statement in case I don't get another opportunity. I'll make a statement and then you can comment on it.

It would seem to me that when you look at how many empty houses there are, the men and women in our armed forces are making a conscious choice to depopulate our bases because they feel the rents are too high for the product they're renting, for the condition of the home, and they're not prepared to live in sub-standard housing. So I guess you're achieving your aim. But that's why there are houses empty, I would suggest, on every base across the country. With these ever-increasing rents and the sad condition of most of the homes, or a lot of the homes, they can get something better in town.

Of course there's a whole myriad of issues dealing with quality of life that flow from that, because we're destroying the sense of community of our military personnel and families because of it.

The Chair: Thank you.

A final comment to that, please, and then we'll move on.

Col Denys Guérin: I don't think the intent is to depopulate the bases. The intent is to give people the choice to decide where they want to live. As well, we're following Treasury Board guidance that says we're not going to provide crown housing where the market can in fact provide that housing. The intent is to give people that choice. If they don't want to live on base, they don't have to live on base; they can live downtown, where there are choices to be made.

The Chair: Hasn't that choice always been the practice, or for a long time?

Col Denys Guérin: Absolutely.

The Chair: I grew up near an army base, and it seems to me we had some on the base and some in our neighbourhood.

[Translation]

You have seven minutes, Mr. Bachand.

Mr. Claude Bachand (Saint-Jean, BQ): Thank you, Mr. Chairman.

First off, I have some questions concerning the Agency which was created, as I recall, in 1995. In documents obtained over the Internet and from the Agency itself, mention is made of the fact that was supposed to be a temporary agency. I'd like you to explain to me how the Department of National Defence ultimately decided to turn responsibility for these units over to an agency?

The Agency was supposed to be temporary. Soon, it will be marking its tenth anniversary. How long will it keep its provisional status? I'd also like you to tell me, when you respond, how many people work for this agency and what its annual operating budget is.

[English]

Ms. Olga Massicotte: To begin with, the Treasury Board approved the Canadian Forces Housing Agency as a full special operating agency as of March 29. It took a number of years for the provisional status to be addressed, because there were a number of conditions that the Treasury Board wanted to be reassured about in terms of the agency's capacity to provide this service to the Canadian Forces in an effective way. So it took us a number of years to actually respond to those conditions and build our internal capacity.

In terms of why National Defence determined that the special operating agency was the way to go in order to meet the housing needs of our Canadian Forces, the logic at the time, which still applies today, was that the focus of the environmental commands, the army, the navy, and the air force, should be on operational readiness and defence matters, and not on peripheral matters. So it was consistent with decisions that were also made in previous years to move some of the personal support functions off to other organizations. The other part of the logic was to ensure that we could identify and define a very dedicated source of funding for the houses and reinvest it back into the portfolio.

In response to your question about the number of FTEs the agency has, we have an authorized full-time equivalent count of 312 employees. Quite honestly, we're still building up to that quota, because we are still growing and building our own internal capacity.

Our annual budget is limited to the rental revenues. As well, as I mentioned earlier in response to Mr. Hill's question, we have received the support from National Defence for an additional $15 million per annum to contribute toward the rejuvenation of the portfolio.

º (1605)

[Translation]

Mr. Claude Bachand: You were allocated an additional $15 million. What does your annual budget now total?

[English]

Ms. Olga Massicotte: That would be $77 million--

[Translation]

Mr. Claude Bachand: You now have an annual budget of $77 million.

[English]

Ms. Olga Massicotte: --plus the $15 million.

[Translation]

Mr. Claude Bachand: Plus $15 million, for a total of $92 million.

Ms. Olga Massicotte: Approximately, yes.

Mr. Claude Bachand: When we talk about an agency, we always talk about creating one that operates at arm's length from the government, as they say.

What does that mean in terms of accountability? Can questions be put to the minister? Can he respond by saying that this is an agency like NAV CANADA and many others, that the agency is responsible and that he is no longer accountable for its operations? I imagine he can't go quite that far, because eventually, the minister must answer to any problems that the agency has or if there are any changes that need to be made.

[English]

Ms. Olga Massicotte: The Canadian Forces Housing Agency is not a crown corporation, sir; it is simply a departmental operating agency within National Defence. So it is fully accountable to the minister through the deputy minister.

[Translation]

Mr. Claude Bachand: Very well.

Regarding the report on the quality of life, at one point, I believe there was a recommendation...I too have seen some absolutely fantastic properties put up for sale in regions represented by my Conservative colleagues in British Columbia. I visited a base that was slated to close, and land in an extraordinary area of Vancouver was set to be put up for sale. At the time, the public would have liked to see that windfall from the sale of this land used to upgrade DND's existing housing stock.

Was that merely wishful thinking, or did the government, in disposing of or selling the land, take the opportunity to turn the money over to the Agency so that it could upgrade DND's housing stock?

[English]

Ms. Olga Massicotte: I'm pleased to report, sir, that part of the Treasury Board approval that we received at the end of March did include their endorsement for the reassignment of any funds from disposal of properties to allow us to reinvest in the portfolio.

[Translation]

Mr. Claude Bachand: That is good news.

Is there some way to amend Treasury Board regulations? I realize that this is not your bailiwick, but as I understand it, the Agency is not at liberty to do whatever it likes. In other words, if the realization dawns at some point that three- or four-bedroom units in the Saint-Jean area are worth x number of dollars, but that the quality of the on-base housing is inferior, does Treasury Board make some allowances? For instance, instead of charging $400 a month for a three-bedroom unit, in line with off-base rents, since the stock is older and the quality inferior, it could give tenants a rebate.

º (1610)

[English]

Ms. Olga Massicotte: In fact the Canada Mortgage and Housing Corporation appraisal process does address that very issue, in that they look at the value of our particular housing unit in relation to other housing units in the community, and there are adjustments because of the quality of the house. So there will be an inherent downward adjustment if our representative unit is of a lower quality overall than something that would be available in the private market. After that we make further adjustments if there's a particular issue with a given unit.

[Translation]

Mr. Claude Bachand: Earlier, you seemed to attach considerable importance to the fact that your current housing stock is totally secure. Should we be reading between the lines and understanding that there are no longer any housing units in Canada with asbestos insulation or UFFI, as was once the case? Some older units were insulated with UFFI, which, as we know, turned out to be a monumental mistake.

Am I to understand from what you're saying that not one single housing unit in Canada is insulated either with asbestos or UFFI?

[English]

Ms. Olga Massicotte: Some of our units may well have asbestos, but we have inspected and contained them to make sure there is no health and safety danger to our occupants.

You may have read recently in the newspapers about an issue with a particular form of insulation called Zonolite that Health Canada raised some concerns about. We have an active inspection program underway right now. Our information from Health Canada is that there is no health and safety concern for the resident if this material has been contained, which we believe to be the case in all of our units. But we have taken a proactive stance on this and have notified all of our occupants and given them advice about not doing anything in the unit that could cause it to be disturbed. Our information at the moment is that it's not a problem, but we will be following up with detailed inspections to provide reassurance to all.

[Translation]

Mr. Claude Bachand: Thank you.

[English]

The Chair: Merci, Monsieur Bachand.

There's no one from the NDP, so we'll go over to this side for seven minutes.

Mr. O'Reilly, please.

Mr. John O'Reilly (Haliburton—Victoria—Brock, Lib.): Thank you very much, Mr. Chairman.

Thank you very much for coming. I'm pleased to see that some of the recommendations in the quality of life report are being fulfilled. I still am concerned that the ombudsman has 95 complaints and that we still are facing lead pipes and inadequate wiring and leaky roofs and poor basements.

I'm a real estate broker by trade—yes, I even do appraisals—and I also do house inspections, which leads me to comment on some of the housing that I find to be totally inadequate. I won't get into that, because I understand $4,500 for a new roof versus $600 for a repair and then it's torn down. I understand all that stuff.

How many units? In the report it says 16,000 PMQs. You're talking about 12,000 units. There are 4,000 being disposed of. What are we going to end up with in the end—8,000, 6,000 units? What are we looking at?

Ms. Olga Massicotte: Our housing rationalization study indicates that we expect an ongoing requirement at this stage for married quarters in the amount of 12,500. That doesn't take into account any new tasking or increase to the force complement, so we will need to continue to update these estimates. At this point, we are still trying to gauge the requirement for singles quarters.

º (1615)

Mr. John O'Reilly: Are you involved in the study going on within the military now of a review of the military and what its future is? Are you brought into that type of circle? Someone said they're looking for 5,000 additional people over what there presently are now in the forces just to be able to maintain the areas we're going into. That would put a fair amount of pressure on the housing unit to come up with adequate housing.

I know that we encourage home ownership because we want people to build some equity into their housing. The one thing I was involved in in the quality of life report.... I was a former manager of Royal LePage and Canada Trust, and I brought in a formula for making up the regional allowance basis for appraisal so that a person received market value for their house. If it went down, it used to be it had to go down 10% before any formula kicked in. I know that was changed, and I just wanted to make sure that was still being implemented.

Can you tell me what formula you use to determine a loss? If someone has a loss, is that loss made up using any particular formula?

Ms. Olga Massicotte: I'm sorry, sir. Are you talking about the annual rent appraisal review?

Mr. John O'Reilly: Well, you're talking rent. I was talking home ownership, because we're encouraging that.

Ms. Olga Massicotte: No.

Mr. John O'Reilly: So you're not involved in a home ownership transfer plan. Maybe Colonel Rochette is.

Colonel Claude Rochette (Director General, Compensation and Benefits, Department of National Defence): Thank you, sir.

Basically, what we have, as part of our regulations for a move for our members throughout Canada, is a package for them that pays for different expenses, such as moving furniture and effects. We have also a provision in the regulations that allows a member to claim up to $15,000 if they do have a loss while selling their house. They can be compensated.

Mr. John O'Reilly: There's a cap of $15,000 on a single family loss if the market goes down.

Col Claude Rochette: There is, sir, yes.

Mr. John O'Reilly: In some cases that probably wouldn't cover the loss if you're stuck with environmental problems or a base is moving and that's the only place you may have an opportunity to sell that. I would question it being fixed at $15,000, when a market may in fact drop more than that, but I'll look at that later.

Mr. Wood, you want to ask a question?

Mr. Bob Wood (Nipissing, Lib.): Yes, I do.

Mr. John O'Reilly: I guess that's on my list here, if you want.

The Chair: There are a couple more minutes.

Mr. Wood.

Mr. Bob Wood: Yes, okay. Thanks.

Mr. John O'Reilly: I know Mr. Wood has to leave.

Mr. Bob Wood: The thing that really bothers me about all this in the housing, and it has ever since John mentioned the quality of life, is that it seems every time the Canadian Forces get a raise, actually, about three days later, you can hear the wringing sound coming from your office because you're wringing your hands since you know the rents are going up.

How many times have you put up the rents right after a pay raise? It just seems that the enlisted guy in the air force, or wherever in the armed forces, can't get ahead. We give them x amount of dollars; you guys up the rent.

Now, these houses have been paid for God knows how many times. So I want to know why you do that.

Ms. Olga Massicotte: I guess my response is that the annual rent review cycle is not linked to the compensation program.

Mr. Bob Wood: Well, your timing is really bad.

The other thing—and I know my colleague was going to ask this, but I just want a quick response—is I got into a bit of a discussion the last time the minister was here about this same thing. He talked about how the rent is market value. Well, that's all very nice to have market value, but my question is this. If you're going to pay market value, at least the people in the Canadian armed forces should get market quality. Madam, I don't believe they're getting market quality for market value.

Ms. Olga Massicotte: Sir, we recognize that our housing stock is aged, but it is in good condition, and we take good care of it. The rents that people are charged are rents that are based on equivalent housing in the community. So I would argue that our 40- and 50-year-old houses are in as good condition as the 40- and 50-year-old houses in the marketplace, but we do take much better care of them than most private landlords do.

º (1620)

Mr. Bob Wood: I don't agree with that at all. When we went over the quality of life stuff, there were all kinds of things that were wrong in the houses--mould, water in the basements, cockroaches, all kinds of stuff.

So I don't see how you can say they're getting market quality. I don't believe they are, unless they've changed them a lot. And if they have changed them, I would certainly like to see the changes.

Ms. Olga Massicotte: Sir, I would say the $400 million we've spent in the last few years has had a significant positive impact on the quality of those houses.

The Chair: Thank you very much.

We'll start a second round of five minutes each, starting with Mrs. Gallant, five minutes, please.

Mrs. Cheryl Gallant (Renfrew—Nipissing—Pembroke, CPC): Thank you, Mr. Chairman, and through you to the witness.

Would you please explain what the CANFORGEN is?

Col Denys Guérin: The CANFORGEN is a Canadian Forces general message, which is our way of sending out a message, a policy, a directive, to everybody in the Canadian Forces so that everybody has a chance to read it.

Mrs. Cheryl Gallant: So this must be the message that Mrs. Massicotte was mentioning in respect to the warning about the asbestos in the vermiculite.

Oh, it's not?

Ms. Olga Massicotte: No, we sent out personally addressed letters to all of our occupants and hand-delivered them. The CANFORGEN message was a complementary message that was sent out to all of the base commands to make sure we hit everybody in the chain of command as well as all of our occupants.

Mrs. Cheryl Gallant: In your opening statements, you assured the chairman and all the members of the committee that “no occupant is exposed to hazards, including lead or asbestos”. Now, I live near a base, and people are coming in with this letter. I don't know if it's a CANFORGEN or not. It doesn't look like it's specifically addressed to anyone. It comes from the Canadian Forces Housing Agency, and it says, talking about the insulation, “What can I do to protect myself and my family?”, which really does open up the question of whether or not these families are at risk.

This has sounded the alarm bell for the personnel and their dependants. They'd like to know more about the timeframe insofar as developing this response and checking out...because they're living in fear right now.

Can you tell us how this systematic approach is going to take place?

Ms. Olga Massicotte: The purpose of the letter we issued to our occupants was to reassure them in case they were concerned about any of the media stories. We were trying to be proactive in this instance, to reassure them that based on the information we had from Health Canada, we did not believe they were at risk, but as a precautionary measure they may wish to take extra steps.

Within the Department of National Defence, we recognize the possibility that this particular insulation material, Zonolite, may have been used in both our residential construction and in some of our other base properties. Therefore, our construction engineering staff are developing an inspection protocol to make sure we identify any locations where there might be this material and reassure ourselves that in fact it is appropriately contained.

Mrs. Cheryl Gallant: Are you aware of the years that this Zonolite product would have been used in the construction?

Ms. Olga Massicotte: Yes, it was used in construction up until 1990.

Mrs. Cheryl Gallant: From when until 1990?

Ms. Olga Massicotte: The mine this material was mined from was open from 1960 through to 1990.

º (1625)

Mrs. Cheryl Gallant: Thank you.

On housing costs, you described the criteria upon which the dollar amount per month was based. From what you said, does that mean a two-bedroom house in Gagetown, for example, would be rented at exactly the same price as a two-bedroom house of similar construction in Esquimalt?

Ms. Olga Massicotte: No, ma'am, a two-bedroom house in Gagetown is compared against a two-bedroom house in the Gagetown market area.

Mrs. Cheryl Gallant: Are you aware of whether or not soldiers receive a comparable increase in pay if they're posted from, say, Gagetown to Esquimalt, which is, I understand, much higher-costing in terms of the private sector housing market?

Ms. Olga Massicotte: Yes, they do.

I'll ask Colonel Rochette to give a bit of explanation about that.

Col Claude Rochette: In the military we are paid base pay, base rank, so that everybody receives the same rate of pay. However, in order to recognize that certain locations have a variation in cost, an allowance differential is paid to the members.

This is based on three factors. We look at basically the income tax, federal and provincial, and the change between the provinces. We look also at the shelter value for different houses and at the cost of a basket of goods--for example, cigarettes, gas, milk, bread, and things like that. Then we make a national average using an average of three years. Basically, we use that average by province, or even by area, to compare the amount of money.

So depending on the location of the base, you could get an allowance greater than somebody else.

The Chair: Thank you, Mrs. Gallant.

That was an important question. It was a major part of the quality of life investigation, as many of us will recall. It was good to hear that.

Mr. Peric, please, for five minutes.

Mr. Janko Peric (Cambridge, Lib.): Thank you, Mr. Chair.

I just want to continue on where Mr. Wood stopped, going back to the original market value. I'm a little bit concerned when you start comparing the quality and the market value with that of the private sector.

When we advertise and lobby for young Canadians to join our forces, we expect them to do whatever is necessary. They are the first ones to go and defend our values, whether in Canada or abroad. At the same time, I personally believe the quality of living and the standard of living in the forces is much lower than in the private sector. So how can you say...?

Every time they receive a raise, they change the base value, and they raise the price of the rent. That's ridiculous. That's unacceptable. These are the Canadians we expect to go abroad to fight for this country, and we're treating them like that? We're comparing them...?

I think there are too many generals sitting there in Ottawa who have no clue about what's going on in different parts of the country. I'm talking about quality for those we should respect the most, because we are expecting from them the most.

What is your comment on that?

Col Denys Guérin: Over the past three years, while we were trying to catch up to the market rents and trying to implement the Treasury Board base shelter value, we had a large discrepancy between what we were charging for married quarters and what the base shelter value was. We were trying to catch up to that market value. That's why you were seeing in a lot of places a $100-per-month increase in the rents. Now that most of the houses are at base shelter value, I think the level of increase in rent--and indeed, as we've heard, some of the rents are being decreased--or the change, the $100 per month, is not happening across the board here for most of our married quarters.

There are still locations, especially where we have rent control, where it's going to take a little while to catch up to the market rent because of the rent control, but for the most part I think we're almost there.

We also announced the pay increase in the April timeframe and the rent adjustment in the November timeframe so that two announcements wouldn't happen in the same month.

So I think we're getting there. Certainly we have achieved the base shelter value for most locations. The number of changes and the size of the changes are certainly not as much as they were over the past two or three years.

º (1630)

Mr. Janko Peric: Mr. Chair, we hear from all members on both sides the concerns about the quality of living, the standard of living, of members of the national forces. I would strongly recommend that this committee in the future seriously pay a visit to some locations and see for themselves instead of just taking the recommendations and views from head office here in Ottawa.

I'm really concerned about the standard of living and about how we're going to keep our young soldiers in the forces instead of seeing them leave to join the private sector after so many years of aggravation. I was visited by one of the young men who left the forces for similar reasons. I'm afraid we're going to be facing that in the future. We're not paying them as they would be paid in the private sector, and yet we're charging them for rent as the private sector would be charged.

I don't think that's fair, and I don't think that's right.

Ms. Olga Massicotte: I'll ask Colonel Rochette to speak to the compensation policy.

Col Claude Rochette: Basically, sir, compensation for the rate of pay for our members, as was mentioned by Colonel Guérin and Ms. Massicotte, is completely linked to increases in the cost of shelter or accommodation, the housing. So it's a negotiation on comparability with the public service, and we do have different methodologies to compare the same type of work done by our military with that done by public servants. From that we derive a comparison in the pay.

In addition to that, we add the military factor, which will pay for different things, such as overtime. We are not paid overtime, we are paid on a monthly basis. It also includes things for posting people, and so on. Basically, military pay is based on economic factors.

We have, as I mentioned earlier, other allowances, depending on where people are located. For postings in Canada, normally we have a posting differential that we cover for the members, but we have also other types of allowances, depending on the location. For instance, for isolated locations we have different allowances to make sure the members are not deprived and penalized financially.

The Chair: Thank you, Mr. Peric. You're well over your time. I'll come back to you.

I want to make a suggestion at this point, and I'll just see how the committee feels. We've heard it expressed several times, or I have, that there is this pay raise for the troops and then, boom, up goes the rent. So let's get some facts.

I want to suggest to the committee that we ask you--I think you'd be the appropriate people--to table with the committee a chart, going back five years, that shows the pay raises for the Canadian Forces, and let's have another chart that shows the rent increases for the Canadian Forces. Let's have some facts to see if our feeling is factually based or if we're just hearing from some disgruntled friends or constituents in the forces. And they have the same right to talk to their MPs that every other Canadian has.

Is that a reasonable request to you folks?

º (1635)

Col Denys Guérin: We're talking about the rent increases for the 20% who live in married quarters, not for the entire...?

The Chair: Well, sure, and if you have the entire picture--

Col Denys Guérin: That might be a little bit more difficult.

The Chair: Give us what you can in the near future.

Mr. Jay Hill: What are people renting in the real world? It would be very difficult to find out, I would think. You'd almost have to poll them individually.

Col Denys Guérin: Exactly, and people buy houses across Canada, so I think that might be a little difficult.

Mr. Jay Hill: But that's not what we're asking--only what you have control over.

The Chair: Yes.

If you could give us that in the near future, that would be helpful.

Ms. Olga Massicotte: We can try to provide some comparable data from Canada Mortgage and Housing Corporation.

The Chair: Okay.

The members have a right to ask any questions they want, and we're going to continue to do that. I just want to point out, though, that some of the frustration we're expressing as MPs is what we hear from friends and constituents who are in the Canadian Forces. Like every Canadian, they have the right to speak to us, perhaps more so given the dangerous work they do. But I just want to encourage colleagues and all of us here to keep these questions for the minister. They and we are the policy-makers. These people before us carry out the policy of the government. So let's save some of these bullets for the right people, too, and not use them all up today.

That said, we're going to have lots more interesting questions, I know.

I see Monsieur Bachand is anxious. Cinq minutes, please.

[Translation]

Mr. Claude Bachand: Thank you, Mr. Chairman.

I'd like to begin by throwing out some numbers: according to the briefing note prepared by the Library of Parliament, 33 per cent of forces members reside on bases, whereas 66 per cent live off base. You quoted figures in the order of 25 per cent and 75 per cent respectively.

What are the exact figures?

Ms. Olga Massicotte: The numbers of 20 per cent and 80 per cent respectively.

Mr. Claude Bachand: Earlier, you stated that the Agency had 312 employees and an annual operating budget of $92 million. Could you break these numbers down for me? Not all 312 employees are program administrators. Of the FTEs you spoke of earlier, how many are carpenters and electricians, for example, or do you contract out that type of work? Who are these 312 employees? Give me a breakdown of your budget. What percentage goes to administration, and what percentage goes directly to doing renovations and maintaining the housing stock?

[English]

Ms. Olga Massicotte: I'll just make a clarification. I said earlier that we have been authorized a complement of staff of 312 full-time equivalents. We're not fully staffed up to that amount at the moment. We're a little over 290. Of that, more than 70% of these staff members are actually on site in our housing management offices across the country. They are actually involved in delivering client service to Canadian Forces members.

Within headquarters we have a number of specialists—urban planners, architects, engineers—who work on the site planning and development. If you add those to the people who are actually delivering the services on site, I would estimate that we're well over 80% or 85% who are directly involved in program delivery.

The balance of our current staff on strength is involved in the ongoing administration and management of the agency and in meeting our accountability requirements to the minister, to this committee, and to the Canadian public.

In terms of the type of staff we have on site and how we deliver services, we do contract for a lot of specialty trades. We do some of our own inspections, and some we also contract out with other professional agencies, including Defence Construction Canada.

[Translation]

Mr. Claude Bachand: I have a very simple question for you. I have a tendency to put myself in the shoes of someone in the private sector. For instance, after a building has been around for 50 or 60 years, it requires some repairs. At some point, however, a decision must be made as to whether it might not be better to raze the building altogether and provide direct housing allowances to individuals, instead of always trying to renovate and invest in aging units, knowing full well that the battle is never ending.

Have any studies been done to see if it might be preferable, at some point down the road, given everything that we have... Obviously, it depends who we're talking about. We can't ask the people stationed in Alert to relocate to the next town. I understand that.

Generally speaking, the bases that I visited are located in urban areas where alternate housing is available close by. Instead of investing hundreds of millions of dollars in efforts to restore and renovate aging stock, would it not be better to come to a decision to gradually divest ourselves of our housing stock and instead, provide housing allowances to our CF members to ensure that they have decent housing in the private sector?

º (1640)

[English]

Ms. Olga Massicotte: Yes, sir, that's exactly what our rationalization framework is attempting to do. We have projected the requirements based on an analysis that we undertook in 2001 that identified the 12,500 units we felt were probably going to be required on an ongoing basis. That's why we're disposing of anything in excess of that.

Starting this year with the rejuvenation program, we are doing an assessment on a site-by-site basis that helps us to determine which of our units are effectively beyond economic repair and need to be disposed of, and which ones are still candidates for major renovation and rejuvenation.

Of the ones that are beyond economic repair, we will continue to dispose of them and to look not only on base but to other private and public sector partnerships to come up with innovative alternatives that will still meet the needs of our Canadian Forces members.

The Chair: Merci, Monsieur Bachand.

Again to Mr. O'Reilly, please, for five minutes.

Mr. John O'Reilly: Thank you very much, Mr. Chairman.

In terms of the new units you propose to build, is this to CMHC standards or to local building code standards? How do you use that from province to province? How do you balance that off? And that leads me into your tendering process.

Ms. Olga Massicotte: All of our units, whether they're being renovated or whether they will be rebuilt from scratch, will meet all applicable building code standards, whether they be provincial or national.

Mr. John O'Reilly: It's going to cost you a lot of money if you're renovating some of the ones I've seen.

At any rate, if you call for tenders, for instance, to build a particular building, do you keep it as a local tender, a regional tender, a provincial tender, or can anyone tender from right across the country?

Ms. Olga Massicotte: We follow nationally accepted contracting and procurement practices. So it would depend on the value of the contract.

Mr. John O'Reilly: What's the minimum square footage you would build for a single family unit?

Ms. Olga Massicotte: That I would have to get back to you on.

Mr. John O'Reilly: Would that be the same if you were to reconstruct a barrack, say? Would there be a minimum square footage if you were doing a new barrack? I was in Esquimalt, and there's a new building out there with quite nice-looking units. I'm not sure of the square footage. So how would you determine that?

Ms. Olga Massicotte: At the moment, the agency is not responsible for barracks, but Colonel Guérin might have a bit more information.

Col Denys Guérin: We will be publishing within the next couple of weeks new functional accommodation standards for both residential and training accommodations. We're talking about single members. In those standards we will have the recommended square footage and all the amenities that should be in contemporary single quarters. Some of those quarters have achieved that. We have a way to go with others, but the intent is to actually build quarters here that have a certain size with certain modern amenities and certain modern services.

Mr. John O'Reilly: When we did the quality of life report, I can remember looking at some of the housing. I haven't gone back to see what improvements have been made, but the officers' quarters were done in brick and the general quarters were done in wood or whatever the other material was. So it was easy to find out where the officers lived, because they were all in the brick houses.

So when I'm asking about minimum square footage and those kinds of things....

Yes, the last pig had bricks, I know.

That's Jay's joke. Actually, I have a bricklayer at home, and that's what it says on his truck, that the last pig had bricks.

That's why I was asking about tendering in terms of minimum square footage and standards, because I couldn't find anything that would satisfy me, in my own mind, that standards were the same for all ranks.

º (1645)

Ms. Olga Massicotte: I can certainly speak to that point, Mr. O'Reilly. The allocation of housing has no relationship to rank any more. It's based on the requirement of the occupants--whether they are single or married, what is the size of their family, what their needs are.

The other reason it was difficult for me to respond to the minimum square footage question on single housing is that we won't be looking simply at single family housing. We'll be looking at a number of different housing options, including multiple units, condominium style possibly, townhouses, and things like that. As Colonel Guérin mentioned, the minimum size will depend on the number of occupants that we anticipate in a given unit.

Mr. John O'Reilly: On the units that have been built in the past, no building permit was required from the local municipality. I think that's why we're in so much trouble with housing today. In the ones that I inspected, some of the things that had to be done to bring them up to standard so they were livable, such as spraying the urea-formaldehyde and the asbestos and so forth, made basements unusable. So those units are basically tear-downs, and I hope that's being addressed so that people aren't going into units where they can't use the basement or there are some other problems with them.

I must admit, I haven't gone back, but I'd be interested in going back to Happy Valley--Goose Bay, for instance, to see whether those two brick houses up on the hill are occupied by privates.

The Chair: Mr. O'Reilly, this will be your last question.

Mr. John O'Reilly: In your book on page 7 it says, “When access to suitable or available accommodation is denied or constrained, DND and the CF are prepared to intervene to maintain the mobility of CF members.” What does that mean?

Col Denys Guérin: That is precisely the Goose Bay example. Having lived there in the PMQs, it was--

Mr. John O'Reilly: Were you in the brick house on the hill?

Col Denys Guérin: No, I had another house, beside this gentleman.

Mr. John O'Reilly: Two brick houses--I found them.

Col Denys Guérin: I don't remember brick houses in Goose Bay.

Where the market is not sufficient to cater to the needs of the members, the crown will intervene. That's consistent with the Treasury Board guidelines. That's something we do in all of our remote locations.

The Chair: Thank you, Mr. O'Reilly.

We promised you a lot of questions, and on my list I have Mr. Hill, Mrs. Wayne, Mr. Anders, and Mr. Calder.

Mr. Hill.

Mr. Jay Hill: Thank you, Mr. Chairman.

I also want to state, as did the chairman, that it's not the committee's intent to unnecessarily attack our witnesses today. We recognize the difficult position you're in. You're constrained by a limited amount of money.

Having said that, there's a difference of opinion at this committee meeting today on what the witnesses have expressed versus what members from both sides are hearing from constituents and the men and women, together with their young families, who comprise our Canadian Forces. I hear stories about rats in a basement. They call and action is taken. They can't get them out, so they have to move this young family. The young mother is moving out with her children. Her husband is serving in Afghanistan. The housing agency wants to charge her for the moving costs. You can imagine what that does to my sense of fair play and why I call into question some of the statements that were made earlier today, Mr. Chairman.

I'm assuming that CFHA paid for this brochure. Do you have any idea how much this cost and how many copies were made? It's a nice brochure.

º (1650)

Col Denys Guérin: That was put together by my director, but I have no idea how much that cost. It was well before I arrived. But I can find that out.

Mr. Jay Hill: I'm going to hazard a guess that something like this, including the administration costs of CFHA, would come out of the $77 million. Is that correct?

Ms. Olga Massicotte: No, this was not published by the Canadian Forces Housing Agency.

Col Denys Guérin: It was published by the Department of National Defence, at a cost, I'm told, of about $10,000 for 1,000 copies.

Mr. Jay Hill: So the administration costs of CFHA do not come out of the rent. Where does your budget come from, then?

Ms. Olga Massicotte: The administration costs of the agency do come out of the rental revenues.

Mr. Jay Hill: How much of the $77 million plus the $15 million you alluded to earlier, which Mr. Bachand says is $92 million, is eaten up in administration costs? How much is actually spent on refurbishing the homes?

Ms. Olga Massicotte: I gave some ballpark figures to Mr. Bachand in my response, but if you'd like a detailed breakdown of administration costs versus actual repair and maintenance costs and things like that, we'd have to get back to you.

Mr. Jay Hill: That's fair enough. I think that all the committee members would be interested in receiving that information.

The Chair: Yes, we would. Please do that.

Mr. Jay Hill: I want to return to the issue of market value. On most of the bases I've been on--and I recognize that Rockcliffe is probably one of the worst examples--the roads are unbelievable. I come from northern British Columbia, and I'm used to driving on bad roads. Just take a drive around Rockcliffe. And some of the other bases aren't much better. There are potholes. You'd think you were driving down some rural road in northern Prince George--Peace River, where I come from, where you can lose your SUV in a pothole.

When you're determining market value, do you consider the condition of the street and the fact there are no sidewalks and street lights, so that the children have to walk home in the dark, especially in the winter months? Are those things factored in as well when you are determining the fair market value for the home?

Ms. Olga Massicotte: Yes, sir, we believe Canada Mortgage and Housing Corporation does take all those factors into account.

Mr. Jay Hill: Okay, because I've heard the opposite. I've heard that when those issues are raised by our Canadian Forces families, they're told, oh, well, the sidewalks, or lack of, and the street lamps, or lack of, that's all public works; it has nothing to do with the Canadian Forces Housing Agency; we don't pay any attention to that.

Is there any other appeal process? Let's say a young Canadian Forces family feels that their rent has gone up too much, that it's too high considering the condition of their home and the base in which they happen to be located. Is there an appeal process other than for them to get hold of André Marin, the ombudsman? Or is there an appeal process directly?

Ms. Olga Massicotte: In the annual rent review cycle, we encourage any occupant to get clarification from their local housing manager about the basis on which the rent was established. If they feel that there has been an error in the calculation, or that some particular factor has not been taken into account, we will look into that and make any adjustments, if necessary.

The bottom line on the availability of the housing, as Colonel Guérin has repeated a number of times, is that the occupancy of the particular married quarter is a matter of choice. If the occupant feels that they can get a better option in the private market, then they're encouraged to do so.

Mr. Jay Hill: It's a pretty hard-hearted approach, I think, to suggest that if the rent's too high, you always have the option of moving.

The Chair: We'll come back to you, Mr. Hill.

Just as a clarification on Mr. Hill's question, can you give us an idea of how many people in the forces would have availed themselves of this in the last year, say? You probably don't have that handy, so perhaps you could give us that. So I'm asking how many people would have actually launched a request for reconsideration of their rent, or whatever you want to call it. Any idea?

Ms. Olga Massicotte: No. I couldn't give you precise figures at the moment, but we could provide them to the committee.

º (1655)

The Chair: Great.

Ms. Olga Massicotte: What I can say is that the number of queries and complaints about the rent has been mitigated over the last few years.

The Chair: Well, we would hope so, after that quality of life.... I know there are still some valid points that all members are both hearing and raising, and I would just like us to get some concrete facts so that next time we have this discussion we can actually look at some numbers.

I didn't mean to stop Mr. Calder, the next questioner over here, and I didn't take any time from him.

Go ahead, Mr. Calder, five minutes, please.

Mr. Murray Calder (Dufferin—Peel—Wellington—Grey, Lib.): Thank you very much, Mr. Chair.

I want to go back to the renovations you were talking about. I notice on page 8 here you basically have a classic 1950s or 1960s small bungalow, probably about 1,200 square feet.

Now, I've done renovations extensively, and I know that any of these structures that were built in the 1950s and 1960s are probably two-by-four stud construction, so you have a wall R factor of around 12, probably R-20 in the attic, and single-pane windows. I'm curious, when you renovate one of these houses...and this is an example right here. I can see that you probably have double-glazed windows in it now, with vinyl siding.

How much further do you go with it? For instance, in a 1950s or 1960s house like this one, the heating source is probably baseboard electric heaters. So when you renovate one of these buildings, how far do you go with it?

Ms. Olga Massicotte: We do a house-by-house assessment to determine whether or not it is beyond economic value to recover it. We don't want to invest more than we can recoup. We don't want to throw a whole whack of money at something that will never be more than substandard by contemporary measures. We would identify that unit for disposal rather than renovation.

Mr. Murray Calder: But for any structure that age, if you're going to do a renovation, you're obviously going to go right in and tear out all the inside walls, because you'd have settling in the insulation inside, which would give you condensation problems in the walls, which would give you wetness around the windows, which would give you mould problems and everything else. So in terms of a house-by-house examination and assessment, if you're going to do a proper renovation of the structure, obviously you're going to tear out the whole insides of it.

Am I right or wrong?

Ms. Olga Massicotte: You're absolutely right, yes, in many cases, but it's still economically viable in a number of other cases. In fact, the 190 houses that we'll be working on this year are candidates where it did still make sense to do a major renovation rather than a reconstruction from the ground up.

Mr. Murray Calder: How old are those candidates that are financially viable enough for a total reconstruct? They obviously aren't from the 1950s or 1960s. They have to be newer than that.

Ms. Olga Massicotte: I'd have to look at the individual list of houses to confirm their actual age.

Mr. Murray Calder: Okay.

I guess the point I'm getting at here is that you can cover up a lot of sins with vinyl siding on the outside, but you haven't solved any problems. That's the point I'm driving at.

The other thing is that these rental units are obviously sitting on DND land, so you're not paying property taxes. Am I right?

Col Denys Guérin: Yes. As a former base commander, I can tell you that you do make payment in lieu of taxes for the land you have.

Mr. Murray Calder: Right. In that situation, then, if we're going to run, as was stated here before, market value, a private landlord obviously looks at taxes that he has to pay, so he's going to have to recoup that out of his rent. You don't have to. There's extra money that you're actually making, because you don't pay taxes. And at one point, as Mr. Wood said, these units are paid for probably ten or twenty times over. So where does that money go? Obviously you're making a profit out of the rent. Where does the money go?

Ms. Olga Massicotte: I would challenge the statement that we're not paying taxes. We are paying, as Colonel Guérin said, payments in lieu of taxes. So it's not a total freebie for us. We are paying for municipal and infrastructure services.

» (1700)

The Chair: Can I interrupt, just for clarification?

So to the municipal council, you make a payment instead of, or in lieu of, taxes. But you're not without costs, that's what you're telling us.

Ms. Olga Massicotte: Yes.

In terms of where the profit goes, there is no profit, because all revenues are reinvested into the portfolio.

Mr. Murray Calder: Okay.

Thanks, Mr. Chair.

The Chair: Thanks, Mr...Mr. Who...? Oh, yes, it's Mr. Calder. I've only known him for a long time. When it gets to be five o'clock, I start to forget my own name.

Sorry, Mr. Calder.

[Translation]

You have five minutes, Mr. Bachand.

Mr. Claude Bachand: I have a question concerning grants in lieu of taxes. As we all know, this provision was created because the Queen does not pay taxes to her subjects. I know that you do not pay fully 100 per cent of your taxes to municipalities. However, I do believe you pay the equivalent of 60 per cent or 70 per cent of the land value.

Can you tell me if these figures are in the right ball park?

Col Denys Guérin: I don't recall the formula used to calculate the amount. All I know is that I was required to pay so much per year. I believe the calculations are done by our infrastructure people. I'm not quite certain.

Mr. Claude Bachand: I'm sure it also depends on the location of the bases, since municipalities set property tax rates. Of course the government negotiates a preferential rate because, as I was saying earlier, that's the purpose of grants in lieu of taxes.

I have a question concerning the water and sewer lines. When the system breaks down, it needs to be fixed. Often, municipalities ask their residents for permission to borrow the money to put in new lines. Are you responsible for doing this kind of work, or are the military bases responsible for water and sewer repairs and upgrades?

[English]

Ms. Olga Massicotte: At the moment, the infrastructure costs are a departmental responsibility, worked out between the base command and our infrastructure branch within the department. These are broad corporate costs that are not the specific responsibility of the Canadian Forces Housing Agency.

[Translation]

Mr. Claude Bachand: Earlier, you said that you would be doing work on 190 houses this year. That was a while ago.

How is the money invested in renovations actually spent? Could we get a breakdown of the money that goes to Quebec, British Columbia and Alberta? I would imagine the overall number of housing units is also a factor that comes into play. If Prince Edward Island has only a small number of units, it cannot demand 10 per cent of the budget. Therefore, the size of the bases, their location and so forth are surely factors that play in the decision.

Furthermore, I'm curious as to how you set your priorities. How do you decide which 190 units, out of a total of 8,000, will be renovated? Do you select the units that are most in need of repairs, or do you spread the budget around? Could you explain the annual budget allocation process to me?

[English]

Ms. Olga Massicotte: The identification of the nine sites that were chosen for the rejuvenation program this year was done in consultation with the environmental commands and our assessment of the most urgent requirements across the country. That led to the selection of units in Ottawa, Borden, Petawawa, Gagetown, Comox, Shilo, North Bay, Wainwright, and Cold Lake.

[Translation]

Mr. Claude Bachand: Then, housing units in Quebec are in a fine state. Is that what you're saying?

[English]

Ms. Olga Massicotte: No, but in consultation with the environmental commands, with head of the army, which is essentially what we have in Quebec, and at Bagotville--

Mr. Claude Bachand: That's good for my campaign, what she's saying.

Ms. Olga Massicotte: The priorities that they indicated to us were elsewhere.

[Translation]

Mr. Claude Bachand: Does the Agency put out an annual report?

[English]

Ms. Olga Massicotte: Yes, we do, sir.

[Translation]

Mr. Claude Bachand: So, this information is contained in the annual report?

[English]

Ms. Olga Massicotte: This will be in the annual report for the year we've just begun.

» (1705)

[Translation]

Mr. Claude Bachand: Have you issued annual reports since 1995 detailing how the money has been allocated to each province? Is that information contained in these annual reports?

[English]

Ms. Olga Massicotte: The annual reports have been evolving with more and more precision every year. You asked earlier why we were a provisional agency for so long. One of the conditions the Treasury Board imposed on us was the development and implementation of a cost accounting system and a full performance measurement and reporting framework.

[Translation]

Mr. Claude Bachand: I imagine that the information you shared with me earlier is public knowledge and that I won't have to go through access to information to obtain a copy of this document.

[English]

Ms. Olga Massicotte: In fact, the minister very shortly will be sharing with all members of this committee the latest annual report.

[Translation]

Mr. Claude Bachand: Thank you.

[English]

The Chair: Thank you, Monsieur Bachand.

Just to clarify, on the annual report that we spoke about earlier, your report flowing from the quality of life, what's the target time to report that to this committee each year? What's the timeframe?

Col Denys Guérin: I don't know. I'd have to get back to the committee on that.

The Chair: We're well into this year, so unless we're talking about a fiscal year.... Is it based on the fiscal year, or is it based on the calendar year, do you know?

Col Denys Guérin: My report is based on a fiscal year, but I can certainly find out what the plan is in terms of getting back to this committee. I don't have that information with me.

The Chair: We'd appreciate it. I guess the point is that if there's an annual report, obviously the committee would like to get it as early in the year as it can.

Mr. Price, please, five minutes.

Hon. David Price (Compton—Stanstead, Lib.): Thank you, Mr. Chair.

Thanks very much for being here.

What would be your percentage of off-base rental housing, roughly?

Ms. Olga Massicotte: Very little, at the moment. We have a few lease arrangements in a few locations, such as Masset in B.C and Debert in Nova Scotia, but it's very minor at the moment. We will be looking at more opportunities for that type of partnership arrangement in the future.

Hon. David Price: That's exactly what my next question would have been.

Now, in terms of the way in which we run our bases these days, there tend to be high points and low points over a number of years. Therefore, you no doubt have surpluses on many bases--and shortages, too. You say that you have a certain inventory there that is not in good condition and that you are planning on eliminating totally. Obviously you can't sell it to anyone, because it's on a base, which means you're going to scrap it. But you also have another inventory, and I imagine a large inventory, of empty buildings. What happens to those? Are they just sitting there? Since civilians can't rent those properties that are on the base, would we not maybe be better off looking at moving our housing outside the base, and then, when they are empty for periods of years, renting them to civilians?

Ms. Olga Massicotte: We actually do have some flexibility in who we rent to if we have excess capacity. We do try to optimize the revenue stream for the portfolio when there's a request for a non-CF member to rent on base. That helps fill some of the vacant units. For the ones where we've determined there is not going to be an ongoing requirement, we are identifying those for disposal. The disposal process looks at a combination of possibilities. We only do demolition as a last option, because there's no recovery from that. We look at the possibility of recycling the stock even if the land isn't available to be sold with it. As part of the ongoing re-examination of force and base structure, there are some instances when we are looking at actually severing part of the property and disposing of it and reducing the overall size of the base.

So a range of disposal options are considered in every instance. But until a disposal takes place, we do look at rentals to people who are not in the forces.

» (1710)

Hon. David Price: Mr. Bachand mentioned Vancouver. I'm thinking of Jericho and the opportunities we're looking at there. There are DND buildings on the base, but there's also part of your operation on the base. Are there any thoughts of selling off the housing units?

Ms. Olga Massicotte: Those are certainly some of the options that are being looked at.

Hon. David Price: That's it, Mr. Chair.

The Chair: Thank you, Mr. Price.

There have been a number of requests for information from members on both sides. I think you can assume that the whole committee wants that information. If you could make sure that it gets to the clerk, she'll distribute it appropriately.

Now I'll turn to our long-time member, Mrs. Wayne. As I said, I'm sorry that she won't be back.

Mrs. Elsie Wayne (Saint John, CPC): I'm sorry I won't be back too, I have to say.

I was invited to visit the base in Vancouver, and then I was invited to visit Nova Scotia as well. At the naval base in Vancouver, some of the men said to me, “Mrs. Wayne, would you come and look at where we live and how we have to live?” I said, “Certainly I will.” I have to say, Olga, that I was really shocked at that time. That was a few years ago. The report says that the CFHA is saddled with a portfolio of PMQs, most of which were built in the 1940s and 1950s. In Nova Scotia, they had gone to the private sector to raise funds--and this really broke my heart--to put a counselling centre on the site where their families lived because the children needed counselling when their dads or moms had to go away for a long period of time. I looked at the children there and in B.C., and it disturbed me greatly to think that these children were living in these kinds of accommodations.

I know Janko isn't here. I honestly believe in my heart, Olga, that 98% of the people in Canada put our military first. They don't all speak out that way. Some of us do, and some don't. But I really believe they feel strongly about our men and women in uniform. They feel very strongly that they should be the number one priority when it comes to housing, looking after them, counselling, and so on. We haven't done that over the years.

This brochure is entitled Accommodation in support of the Canadian Forces: A Vision for 2020. Is it not possible, Colonel, to have a vision for, say, 2009, so that we don't have to wait 16 years for us to turn this around? I think we have to try to step it up for them. I don't think you will ever be criticized, so help me God, by anyone. Even if I'm not here, if anybody criticizes them, you're going to hear from me one way or another. I honestly think it has to be a top priority, after I saw how they were living. You can't do this to the children, and you can't do it to the families. I was told that this is death by a thousand cuts. It's the thousand cuts in the military that have caused these things to happen.

I feel strongly that we must try to step it up, Colonel, just a little bit, and make sure that every man and woman in our military is treated with dignity. Their way of life and quality of life have to be number one, and we should make sure of it, sir.

The Chair: Does anyone want to touch that? I'm sure you agree.

» (1715)

Col Denys Guérin: I agree wholeheartedly.

Ms. Olga Massicotte: We all recognize that Mrs. Wayne is a champion for the Canadian Forces.

Mrs. Elsie Wayne: I have a question. Is the base in Ottawa going to close? That's the one you went to, Jay.

Mr. Jay Hill: That's the Rockcliffe base.

The Chair: Is the Rockcliffe base going to close? I don't know if you want to answer that.

Mrs. Elsie Wayne: Because of the way things have gone there, we wondered if that's something they're looking at. At our last meeting, the colonel who was here was bringing 2,000 men back from Afghanistan, but he could only replace them with 600 because he didn't have enough.

The Chair: Perhaps you could give a quick response. Mr. Anders is waiting.

Ms. Olga Massicotte: I would just point out that Rockcliffe was slated for disposal through a cabinet decision back in 1995. You might want to ask the minister for an update.

The Chair: The decision was made, but it hasn't actually been carried out.

Thank you very much, Mrs. Wayne.

Mr. Anders.

Mr. Rob Anders (Calgary West, CPC): Thank you, Mr. Chairman.

I talked to a fellow in my riding who lived in the PMQ for over 15 years, from 1972-89. He feels that something is fundamentally going wrong. He thinks the armed forces are better if you actually have military families living within the base. You want to have the security and knowledge that your family is protected within the perimeter of the base if there's some sort of domestic insurrection. If a member passes on or gets injured overseas, the support network in and around the base is able to help the family deal with that crisis. That contributes to the efficiency of the forces and helps with the situation generally.

It pains me to hear that we have 4,000 units that people aren't using because there's no way they can meet the market standards. If they met the market standards and we were doing a good job, people would want to live there, but they're choosing not to.

I know that's not the case in the United States. We went ahead and checked out Quantico, where they've had a huge boom in construction. They've created 1,500 jobs, and 80% of the construction work has gone to local contractors. They're using privatized renovation and development.... They are using private sector partners as much as they can to make those facilities liveable, so the people want to live within the perimeter and on base.

You mentioned Defence Construction Canada, and I'm wondering what capacity it fills. Can you comment on this whole idea of private sector partnerships to enhance our on-base facilities?

Ms. Olga Massicotte: I didn't catch the last bit of the question.

Mr. Rob Anders: You mentioned Defence Construction Canada. I also note on page 10 in the bottom paragraph you mention partnerships with public-private training and educational institutions. I know that in the U.S., the army uses GMH Military Housing to renovate and develop their facilities on base. I want to have a sense of how much of that goes on here in Canada.

Ms. Olga Massicotte: We look at our counterparts in other countries on an ongoing basis to see what kinds of models they use. We've done some research on the American, Great Britain, and Australian models. We are facing similar challenges in some ways, but they also have different social contracts with their armed forces, so some of their solutions are different from ours.

In the work we have done to date with Defence Construction Canada, we have used them primarily as a centre of expertise that we didn't feel was appropriate at the time to build in-house. They are experts in military and large construction projects.

» (1720)

Mr. Rob Anders: Do they act as some sort of consultant on development?

Ms. Olga Massicotte: They're a crown corporation, I believe, that reports to the Minister of Public Works and Government Services.

Mr. Rob Anders: Do they actually do the construction themselves, or do they contract it out?

Ms. Olga Massicotte: They act as the contracting arm for National Defence.

Mr. Rob Anders: Does that mean they do the construction? Do they bang nails and pour cement?

Ms. Olga Massicotte: No.

Mr. Rob Anders: Okay. They set the standards and contract it out.

Ms. Olga Massicotte: They manage the projects.

I'm sorry, I don't think I've answered your question.

Mr. Rob Anders: I sense that the Americans are doing a much better job at this. I think they're much more successful at having their people live on base, partly because of this private sector partnership. I think we're missing the ball. If our people aren't choosing to live on base, it's because we're doing something wrong. If we provided them with effective accommodation on base they would choose to be there, and we'd have a better and more efficient armed forces. We're obviously doing something inappropriately, because they're opting out of living on base and are going somewhere else.

Ms. Olga Massicotte: I'll ask Colonel Guérin to speak to it a little bit, but I would point out that part of what accounts for our vacancy rate is the fact that a lot of our members are becoming homeowners, and part of that is the demographic shift. They have the option to purchase homes in the community and they're exercising that option. Even if there were much more attractive options on base, their desire to become homeowners and build some equity for when they leave the forces would still drive them out of the married quarters.

Col Denys Guérin: This is not a new phenomenon. For many years we've had more people living off base than on base, and it's a personal choice. A lot of people don't want to live on base; they'd rather own their own house. So it's not something we've created; it's something that is part of the reality of the demographics, that people want to live off base.

The Chair: Thank you, Mr. Anders.

As I said, I grew up in London, near Wolseley Barracks, and we had that phenomenon 40 or 45 years ago--I won't tell you how old I am--the same thing.

I'm going to give the last five minutes to Mr. Hill.

Mr. Jay Hill: Thank you, Mr. Chairman.

I agree with the general thrust of my colleague Mr. Anders' comments. It just seems to me that if we scratch the surface, we'll see that beneath this there's much more going on here than a matter of choice. I think, with all due respect, that it's a little bit of a cop-out. It's easy to say they're choosing to live off base. In many cases that might be true, but I think we need to look a little bit deeper, and we need to look at the fact that in many cases rents have been going up by $100 per month for the last three or four years.

As to some of the accommodations, I use the term substandard, and I don't use it lightly. For some of the accommodations I've looked at you're charging $1,000, $1,100, or $1,200 a month for--well, I don't even want to describe it. I'll just leave it on the point that I think there's much more at work here than just a matter of choice for many of our military families.

Who determines when repairs are necessary?

Ms. Olga Massicotte: Our local housing manager is the first person to assess the state of the inventory. They do ongoing inspections, partly as part of an annual business planning cycle but also in response to the annual posting season, where we march members in and out as they are posted to different bases. Both of those serve as catalysts for an evaluation of the unit. Also, if there are any emergency situations that require a response, that gets fed into our annual business planning process.

Mr. Jay Hill: I'm just going to pass it on to you to talk to these people. I know that in many cases they're making some very tough decisions, as we said earlier. Money is very tight, and we can get into all sorts of political debates about who's at fault for that.

I have had the opportunity to tour some of these homes, and you see peeling paint, holes in the walls, and soiled carpets they've requested for quite some time to have replaced. You have young families where the father or mother is serving overseas, serving our country at a time when many of us consider we're at war with terrorism, and these young families are living in those types of conditions. Maybe they don't have the down payment so they can, as you say, make the choice to go downtown, or maybe there isn't a community close enough that they can commute back and forth, so they're stuck there living in those types of conditions. I just challenge you to take a hard look at what's going on in some cases.

I want to return to a point my colleague Mr. Price made earlier about renting to civilians. I've heard this story--and it's partly because, as I've said, when I live in Ottawa I'm half a block away from Rockcliffe--and I just wanted to run this by you. I've heard that directly below where I live, just off Montreal Road, there's a group of houses on that base. Some of them were empty and some of the Canadian Forces families were effectively evicted. The houses were turned over to an influx of refugees, but before the refugees could move in, those houses were in such deplorably poor shape that they actually had to be improved after our Canadian Forces families had moved out so the refugees could move into them. Now, this is a story I've heard, and I want you to answer today as to whether there's any truth to that.

» (1725)

Ms. Olga Massicotte: I'd have to have more specifics on the story before I could give you an appropriate response to it, sir.

Mr. Jay Hill: Are there any civilians, either low-income Canadians or refugees, living on base at Rockcliffe here in Ottawa? Are there any civilians living on base?

Ms. Olga Massicotte: Yes, there are some civilians living on base.

Mr. Jay Hill: But you don't know any of the background of how they came to live there, what rent they're paying, what the condition of the houses was, or whether the houses had to be improved to bring them up to minimal provincial standards before the refugees could move in. Yet they were considered good enough for Canadian Forces families to live in prior to that. This is what I've heard.

Col Denys Guérin: I'm not aware of that.

The Chair: Ms. Massicotte, do you have any information?

It's a valid question, and I just want to know if Ms. Massicotte has any information she can share.

Ms. Olga Massicotte: No, I don't have any specific information.

Mr. Jay Hill: I don't have any more information than that, or I would share it with you, but perhaps you could look into it.

Ms. Olga Massicotte: On the specific area, yes.

Mr. Jay Hill: That's specifically on the base here.

And I recognize, as you said earlier, that Rockcliffe is a little bit of a special circumstance. We don't have the same type of thing, hopefully, happening on bases all across the country.

Are we out of time?

The Chair: Yes, we're out of time.

Mr. Jay Hill: Thank you, Mr. Chairman. I could go on all day.

The Chair: I think a lot of us could.

Thank you, Mr. Hill.

So you'll take that last inquiry, please, and provide that information.

Ms. Olga Massicotte: Yes.

The Chair: I want to thank you, Ms. Massicotte, Colonel Guérin, and Colonel Rochette, for joining us.

You had some enthusiastic questions from members on both sides. I think what the members are telling you is that they want you to take these questions in the spirit expressed on both sides of this table, whether we be opposition or government members, where there's a tremendous determination to see the best possible done for the men and women of the Canadian Forces. We think sometimes it hasn't been the case, and we're determined to try to ensure that this is the case from here on out. That's the spirit in which you had some of the questions that came forward today.

We thank you very much for being here, and we look forward to your responses.

This committee is adjourned.