Thank you, Madam Chair. Thank you for your invitation.
Accompanying me today are Mr. David Marshall, Deputy Minister of the Department of Public Works and Government Services, and Ms. Margaret Kenny,
[English]
who runs the office of greening government operations, which we call OGGO.
Again, thank you very much for inviting me.
[Translation]
To begin, I would like to discuss my department's central role in the greening of government and in military procurement—both areas that I know are of interest to this committee. I would also like to briefly mention some other timely developments.
With its wide range of real property, procurement and information technology activities, my department is uniquely positioned to contribute to real progress in protecting the environment.
PWGSC's Office of Greening Government Operations is overseen by Ms. Kenny, and has a mandate to accelerate the greening of government by working closely with other federal departments.
[English]
An important milestone was reached when the department partnered with Environment Canada and Natural Resources Canada to develop the Government of Canada's policy on green government. The policy, which came into effect last April, directs that environmental performance considerations be incorporated into all stages of procurement, from planning and requirement definition to purchase, use, and ultimate disposal.
Green procurement itself isn't new. What is new is that rather than being made on a transactional basis by individual procurement officers, environmental performance considerations are now systematically embedded into the procurement processes of all departments and agencies, just as price, performance, availability, and quality are. This represents a fundamental change in how the government determines value for money.
[Translation]
Green procurement meshes well with other environmental initiatives underway in my department. For example, last June I opened a new, energy efficient, environmentally friendly, federal government building on Bel-Air Street in Montreal. This building is named after Normand Maurice, who is considered the father of recycling in Quebec. Built with recycled material from the previous building on this site, it uses geothermics and solar energy for heating and cooling, and rain water for the toilets. Thanks to these and other advances, operational costs will be 35% lower than for conventional buildings, while we expect energy costs to be cut in about half.
I invite committee members who happen to be travelling through Montreal to pay a visit to the Normand-Maurice building on Bel-Air Street.
[English]
I also encourage you to see 401 Burrard in Vancouver, a 19-storey office tower that represents a new generation of commercial office space, not only in terms of sustainability but also in terms of providing a healthier and more productive work environment.
All new federal office buildings must now meet the Canada Green Building Council's LEED gold level, and the LEED gold-level standard is also being sought for new long-term leases.
Although my department is not a significant owner of contaminated sites, it offers project management, as well as technical, procurement, and environmental services to federal departments carrying out cleanup projects across Canada.
The $400 million cleanup of the Sydney tar ponds and coke ovens that I announced a few weeks ago is a great example of this program in action, with the federal government contributing $280 million and the province $120 million. Up to 150 workers will be employed at peak construction times. I understand that the committee is considering a study of the greening of government operations; I would endorse such an initiative.
[Translation]
A second matter I'd like to talk about is military procurement, and the significant role my department plays in equipping Canada's military—everything from aircraft to uniforms.
In fact, the Department of National Defence accounts the more than half the business conducted by PWGSC each year. DND is responsible for identifying its requirements and specifications, while my department is responsible for the procurement. It is no secret that, after many years of negligence, the Canadian Forces requires new and better equipment. Given that our military personnel are operating in demanding and dangerous environments, we must ensure that they have the equipment they need.
Last June, the government announced 17 billion in planned procurements for the Canadian Forces, including the purchase of 2,300 medium-sized logistics trucks; 16 medium- to heavy-lift helicopters; four strategic lift aircraft; 17 tactical lift aircraft; and three supply ships.
Two weeks ago, the Government of Canada awarded a contract to the Boeing Company to procure four C-17 Globemaster III aircraft to provide a strategic capability for the Canadian Forces.
I want to assure this committee that all of our procurements are being managed in a fair, open and transparent fashion—in keeping with our government's commitment to accountability—and that they encourage competition by Canadian suppliers.
[English]
At the same time, our military's needs deserve to be met in a timely manner. The Department of National Defence has told us it takes, on average, about 15 years to move a major military procurement from the time a need is identified to full deployment in the field. That, you will agree with me, is unacceptable.
The Prime Minister has asked a group of ministers, including me, to review the situation and recommend how the process can be streamlined. In the meantime, we have been clear and open with Canadians about our acquisition priorities, our procurement methods, and the status of major projects. Uppermost in our minds are the needs of the men and women who every day put their lives on the line for Canadians; we make no apologies for that.
I'd like to turn quickly to something discussed during my last appearance. That is the department's new office of small and medium enterprises, set up to ensure that firms have fair opportunities to compete regardless of their size or location.
I am pleased to report that the response to this new initiative has been very gratifying. The office is already fielding more than 500 inquiries a month across Canada. Since April, when I launched the offices, 800 new firms per month have registered to do business with us, and a majority of these firms, I'm happy to report, are SMEs.
Our performance in terms of the value of contracts being won by SMEs exceeds that of the U.S., which has an explicit set-aside program for SMEs. While one-quarter of the value of U.S. contracts goes to SMEs, in Canada the proportion has grown higher.
[Translation]
We are also taking steps to address the challenges we are facing in managing the government's real estate. This is another area suffering from years of neglect. Many of our properties are aging and in dire need of work. In fact, our recapitalization needs are an estimated $4 billion.
PWGSC has hired experts from the private sector to study samples of its real property portfolio and to recommend how to meet these challenges more effectively. These firms will help us devise innovative strategies to allow PWGSC to meet accommodation requirements, generate savings, and ensure that these assets are properly maintained.
[English]
Madame Chair, the last area I'd like to mention is the development of a code of conduct for procurement. This code is another step forward in implementing the Federal Accountability Act and the action plan that goes with it. It will consolidate existing legal, regulatory, and policy requirements into a concise and transparent statement of the expectations government has of its employees and suppliers. The draft code can be found online and through MERX, and we invite the public to comment any time before March 7, 2007.
[Translation]
Madam Chair, there are many other developments I could talk about, but I'm sure that I will have the opportunity to do so during questions.
:
Firstly, allow me to respond to the first point you raised. I would ask you to revisit the premise upon which you say that procurement was not carried out fairly or transparently, because it was.
Mr. Rodriguez, the awarding of the contract that was ultimately given to Boeing was preceded by several meetings with suppliers working in the aeronautics industry. Once it was agreed upon that there was only one single supplier that satisfied all criteria, after having received word from other suppliers who also thought they could meet the requirements, a committee concluded that Boeing was the only company that could supply these aircraft. We then entered into discussions with Boeing.
Contrary to what you were saying and what others are alleging, I believe that the process was very transparent.
With respect to ITAR, I agree with you completely. When a private Canadian company deals with an American company, and in this case is forced to transfer an employee in order to keep the contract with the U.S. company and be in compliance with American legislation, the law is being applied extraterritorially, something that the Prime Minister of Canada and my colleague, the Minister of Foreign Affairs have objected to and rejected. They have indicated to their U.S. counterparts that we do not agree with the extraterritorial reach of ITAR.
Fortunately, Mr. Rodriguez, these cases are still isolated incidents. But one case is one case too many. Canada continues—and will continue—to remind the Americans that we will not allow private Canadian companies working in Canada to be forced to hire only persons designated by Americans, or by U.S. legislation, because this is what is deemed to be acceptable in their eyes. We reject this premise, and will continue to reject this premise.
I have a whole series of questions on this, but limited time, so I'm going to go on to the sale of buildings.
I'm happy to hear that no decision has been made yet. You were read one quote from James McKellar. Incidentally, Mr. McKellar, who was quoted earlier, is the co-author or assembler of this book called Managing Government Property Assets: International Experiences, one of the very few books of this nature, so he has some authority. He has concluded that this would almost certainly cost more to taxpayers.
There was another quote in the press not too long ago, from a professor of economics in the Department of Economics at the University of B.C. He said, “The stated argument in favour of the plan is that the new owners would foot the bill for renovations. Nonsense: The purchaser will incorporate the costs of renovations in the rent. The government will pay for the renovations either way. The question is whether this scheme reduces costs.” It goes on and concludes by saying, “Either way, this seems like bad public policy and lazy thinking.”
Now, if the decision has not been made, Minister, would you consider an option along the lines that I will describe now?
First, I acknowledge and I accept that since this country entered into a deficit situation more than 25 years ago, there's been neglect in maintaining our buildings. I don't question that. The previous government, once we'd eliminated the deficit, had started recovering some of the... But the problem is huge, and officials will confirm that. There was the rust-out program. We were starting on a priority basis, but there's no denying that we have a problem. It's been built up over the years.
But if we just rent out with a repurchase scheme for 25 years, I would argue that we're freezing ourselves — because once you've rented, you're eliminating some of the flexibility we would otherwise have — and 25 years later we're no further ahead, in the sense that those buildings will probably need renovations at that time, if not a complete retrofit.
Instead of doing that, would the government consider creating a crown corporation with a legal mandate to charge what it costs to the users, with the ability to borrow, backed up by the government, to do the retrofitting necessary and acquire or hire the expertise that currently the government doesn't have, so that 25 years from now we would have that expertise and could become a model to other governments and other countries on how to a manage public real estate portfolio?
Is that under consideration, Minister?
Thank you, Minister, for appearing before us.
I find it quite ironic that a multi-billion-dollar defence and military procurement contract—and it's Boeing I'm referring to—meant to safeguard Canadians and Canadian sovereignty would in fact be the construct that undermines fundamental pillars of Canadian society. U.S. ITAR legislation undermines our Charter of Rights, forcing Canadian companies to discriminate against Canadians born in certain countries.
In Canada we do not discriminate amongst Canadians based on their place of birth. In fact, a colleague of ours, a member of Parliament, Omar Alghabra, who has been entrusted by Canadians to pass legislation in our House of Commons, would not be allowed to work on this contract.
Secondly, this contract fundamentally undermines Canada's sovereignty. Although Americans are our friends, only Canadian laws should apply on Canadian soil. We need to stand up for legislative sovereignty.
Yesterday in the Senate, Minister, you stated, “The good news is that such cases are rare. That is very good news...”. Just recently here in committee, you said you were proud of this particular contract. Minister, how can you categorize as good news any breaching of Canada's Charter of Rights and Freedoms or of legislative sovereignty on Canada's soil?
:
I'd be happy to, and perhaps we'll ask Margaret to complement my answers.
Let's start with LEED. We talked about buildings earlier. Any new significant real estate investments we're going to make on buildings we own, as we did in Montreal in the Bel-Air building, are going to be made to meet the LEED standards. We're going to be very cognizant of the environment, saving energy, making sure the improvements and the repairs are done in harmony with the environment. Bel-Air is a good example, and 401 Burrard in Mr. Moore's backyard is another great example. If you're in Vancouver, you should visit the building. It's quite extraordinary.
When replacing cars in the government's fleet of cars, we've focused on buying hybrid cars, no more eight cylinders. We're very cognizant of the fact that we're buying cars that will consume less gas and be friendlier to the environment.
We're also focused on buying assets such as computers that save energy. So once they're not in use, they automatically go off. Initiatives such as this have been implemented throughout the department.
We understand that with a purchasing power such as ours, if we're smart at it, we have the ability to dictate the supply chain we're going to deal with. If we send out a strong message that we're only going to deal with people who are eco-friendly and environmentally friendly, I think we can make a difference.
I don't know if Margaret wants to add to this.