TRGO Committee Meeting

STANDING COMMITTEE ON TRANSPORT AND GOVERNMENT OPERATIONS

LE COMITÉ PERMANENT DES TRANSPORTS ET DES OPÉRATIONS GOUVERNEMENTALES

EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, April 26, 2001

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[English]

The Chair (Mr. Ovid Jackson (Bruce—Grey—Owen Sound, Lib.)): I'd like to clear the room of the previous guests and start the proceedings of the transport committee.

This morning we have the Minister of Public Works and Government Services, and pursuant to Standing Order 81(6) we're dealing with the estimates ending on March 31, 2002. We have votes 1, 5, 10, 15, and 25 of the Department of Public Works and Government Services.

Minister Gagliano, you have five minutes to introduce your guests. Then what we normally do is have a first round of ten minutes between the opposition and government members and then subsequent rounds of five minutes.

Welcome. You may proceed, sir.

Hon. Alfonso Gagliano (Minister of Public Works and Government Services Canada): Thank you, Mr. Chairman.

I have with me Deputy Minister Janice Cochrane. I have Jane Billings, Assistant Deputy Minister, Supply Operations Service Branch; the Honourable André Ouellet, President and CEO of Canada Post; Jean-Claude Villiard, who is President and CEO of Canada Mortgage and Housing Corporation;

[Translation]

and Marc Lafrenière, who is the Executive Director of the Canada Information Office.

[English]

And I have people from the Royal Canadian Mint and Canada Defence Construction Corporation, and also other officials in case they can help me in answering all the questions.

[Translation]

First of all, Mr. Chairman, allow me to congratulate you on your election as Chair of the Committee. It is a pleasure for me to make my first Committee appearance of this new Parliament, and I think Mr. Chairman, it is quite appropriate that it be before this Committee. As you know, Mr. Chairman, I am responsible not only for the Department of Public Works and Government Services, but also for a number of very important Crown corporations.

[English]

I will therefore provide an overview of the various initiatives now underway in the Department of Public Works and Government Services and the crown corporations for which I'm responsible.

Members will, I trust, forgive me for being brief. Naturally I will be glad to answer any questions that they may have at the conclusion of my presentation.

The Department of Public Works and Government Services is playing an important role in fulfilling the Government of Canada's agenda of building a stronger, more inclusive Canada and securing a higher quality of life for all Canadians. My department is focusing its efforts over the next three years on helping the government meet the new challenges facing all Canadians, businesses, and government organizations, especially with regard to technology, the environment, and service to citizens.

Technology, in particular e-government, is the driving force behind how we will operate and deliver our services. We are working to provide the electronic structure that will allow citizens and industry to do business with the government.

[Translation]

The importance of sustainable development continues to grow as environmental pressures drive international agreements and government action. Our commitment in this area is clear—to operate in a more environmentally sustainable manner.

Our future depends on the knowledge and expertise of our people, our ability to make effective use of technology, and the rigour with which we maintain the public trust.

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As we enter the 21st century, I am confident that Public Works and Government Services will continue to play a significant part in helping the government provide a high level of service to all Canadians. I have the same confidence in the Crown corporations and government agencies that I am responsible for. Let me now say a few words on each one of them.

Defence Construction Canada continues to manage contracting for construction and professional services required in support of the management of facility infrastructure owned by the Department of National Defence. This year marks the corporation's 50th anniversary of service to DND and the Government of Canada.

[English]

Over the last several years, the volume of work carried by DCC has been relatively constant at $300 million to $350 million per year. The single largest program being managed is the environmental remediation of the 20 distant early-warning line radio stations in the far north.

For the Canada Information Office, another company under my portfolio, the past year has been of considerable progress, as will be the year to come. The Canada Information Office's report on plans and priorities found that the modern communications environment provides citizens with countless sources of information from every direction, but it is often hard for them to obtain the information they need and want. That's why the Canada Information Office exists—to help cut through today's complex communications environment by communicating with Canadians in a common voice.

[Translation]

The Canada Information Office is working to strengthen regional communications and advertise government programs and services. I am pleased to report that it is working. Last fall we delivered a national service guide to every household in the country. Hundreds of thousands of Canadians have responded positively to the new Canada Pavilion at fairs across the country.

Moreover, ads in some 1,300 community newspapers nationwide have succeeded in raising citizens' awareness. In the year to come, the Canada Information Office will continue to improve the Government of Canada's communications with Canadians. Because the better we communicate, the better we can serve the people of this great country.

In 2000, Canada Lands Company Limited underwent a mandate review at the end of its first five years of operations, to address its future direction. Concurrently with a special examination by the Auditor General, the company was also benchmarked by an independent, outside organization against the top real estate development companies in the industry. Both studies demonstrated the success of Canada Lands against its set goals, its performance relative to the industry, and the significant value it has created for its shareholder, the Government of Canada.

In August of last year, Kathy Milsom joined Canada Lands as its new President and CEO following an extensive national search process. Ms. Milsom, who joins me here today, was formerly the president of a large facilities management firm headquartered in Toronto.

[English]

This company has exceeded all expectations at the financial level and has distributed a total of $180 million to government since its reactivation in 1995. However, the real benefit can be found in Canada Land's tag line—“Innovation, Value, and Legacy”.

Operating in a balanced scorecard fashion ensures that this company provides benefits to local communities and Canadian taxpayers. This includes today the potential for 26,000 newly created jobs, 9,500 newly constructed residential units, and environmental expenditures of approximately $25 million for green urban space from coast to coast.

As Canada's national housing agency, CMHC has provided Canadians with housing-related programs and services for over 50 years. CMHC's mortgage loan insurance program continues to make it easier for more Canadians to buy a home. This past year saw the amount of the corporation's outstanding insured mortgages exceed $200 billion for the first time.

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A number of new insurance products and enhancements to existing products were introduced to provide further borrower flexibility and a greater range of financing options for Canadians.

CMHC continues to provide approximately $1.9 billion a year in support of social housing programs. CMHC is also discussing the Government of Canada's offer to transfer responsibility for the administration of social housing with three of the four remaining provinces.

[Translation]

Last September, I co-chaired a meeting of the provincial and territorial housing ministers, the first such gathering in over five years. As a result of that meeting, working groups have been established to address impediments to the production of affordable rental housing and housing needs in rural and remote areas.

CMHC also funds and disseminates research on a wide range of housing-related topics, including housing needs and housing markets, for use by consumers, private industry and community-based groups.

Internationally, CMHC promotes the excellence of the Canadian housing system abroad, increasing export opportunities for Canadian housing products, services and expertise.

According to a recent Conference Board of Canada report, Canada Post makes a significant contribution to the Canadian economy. The Corporation directly hires some 65,000 employees, generates another 30,000 spin-off jobs and contributes some $2 billion of real economic activity each year.

In 1997, Canada Post's Customer Satisfaction Index stood at 67%. Less than four years later, this Index is up to 79% and the corporation is well on its way to achieving its 85% objective.

[English]

Last June, epost was named one of Canada's top e-businesses in an independent survey for the Globe and Mail. In just over a year, more than 120,000 Canadians have registered with epost, and 90 companies are committed to sending mail. Telus Corporation, a national communications provider, recently decided to invest $30 million in return for a 5% equity stake. This gives epost an independent valuation of approximately $600 million.

Over the past few years, the corporation has made significant progress with respect to its labour relations. This year Canada Post has reached a tentative agreement with the Association of Postal Officials of Canada.

I'm also pleased to report that in 2000 the Royal Canadian Mint achieved its second-highest earnings since 1993 with a pre-tax income of $8.7 million. This success is due to the Mint's popular millennium coin program and to a large volume of foreign circulation production. The popularity of the millennium coin program has proved yet again that the use of circulation coins marking special events or occasions is very popular with Canadians. The introduction of plated circulation 5¢, 10¢, and 25¢ coins in the marketplace this year will save the government close to $10 million annually on the production of coins for Canada. The Globe and Mail's “Report on Business” magazine has ranked the Royal Canadian Mint as one of the 35 best companies to work for in Canada in their annual standings.

[Translation]

This ranking marks the first time that a Crown corporation has been recognized by the study, which attests to the ongoing commitment by the Mint to foster an environment of corporate success through employee development. The Mint is truly a Crown corporation of which all Canadians can be proud.

Mr. Chairman, I have tried to provide you and the members of your committee with a sense of the many initiatives underway within the departments and organizations for which I am responsible. It is with great certainty that I say that these organizations will continue to be valuable assets for Canadians. Thank you.

[English]

Thank you, and I'll be ready, with the help of my officials, to try to answer all your questions, sir.

The Chair: Thank you very much, Minister Gagliano.

We'll start with Mr. Burton of the Alliance Party for ten minutes.

Mr. Andy Burton (Skeena, CA): Thank you, Mr. Chairman.

I'd like just a point of clarification. Is the minister here till one o'clock, or what is the time allowed?

The Chair: Minister?

Mr. Alfonso Gagliano: Sorry, I didn't...

The Chair: You're here for the total duration of the meeting if we need you?

Mr. Alfonso Gagliano: I believe that I'm here till one o'clock.

The Chair: Okay.

Mr. Andy Burton: Thank you, Mr. Chairman.

Mr. Alfonso Gagliano: Then we have to prepare for question period.

Mr. Andy Burton: Thank you, Mr. Chairman.

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Thank you, Mr. Minister, for being here, and I appreciate you taking the time.

I've got a number of questions that I'd like to start out with—just general contracting questions in terms of contracts and Public Works contracting procedures. We've had a number of great things from your people, and they were quite informative, but there are a few things I'd like to clear up.

The first question is regarding sole-source contracting and ACANs, Mr. Minister. According to your officials, 18% of contracting is awarded sole-source and approximately 18% through ACANs, which the Auditor General also deems to be sole-source. So that's 36% of your contracting, worth approximately $4.8 billion is 1998 figures. My question is: when we're doing this kind of dollar-volume business as sole-source contracting, how can we be assured that Canadians are getting the best value for the dollar, and how are we assured of accountability for this contracting process?

Mr. Alfonso Gagliano: First of all, on the ACAN program, that is nothing new. We differed—not only us, but Treasury Board—with the assessment of the Auditor General that the ACAN procurement is sole-source. The ACAN procurement is put into the system and allows anybody to compete, and once they have manifested their serious intentions, we proceed to the usual competitive process. So, on the ACAN, we consider it in a special category, but we definitely don't agree with the Auditor General that ACAN is a sole-source program.

Secondly, I believe that during the past few years we also have delegated authority to departments to facilitate and accelerate the process so that departments can do their own procurement up to a certain amount. But, in that, there are a number of guidelines with checks and balances to make sure that we get the best product and the best service for the best price. For me it's very clear that transparency, accessibility, and equity are the three most important objectives that I've been pursuing since June, 1997 as Minister of Public Works and Government Services.

Mr. Andy Burton: Well, I appreciate that answer, Mr. Minister, through the chairman, but the Auditor General himself disagrees with Treasury Board on the matter, and he does not consider ACANs to be competitive.

I'd like to ask the minister, is he prepared to take the necessary measures advocated by the Auditor General to make competitive bidding necessary for all government contracts, and if not, why not?

Mr. Alfonso Gagliano: We definitely want to make sure that every contract is competitive and that every Canadian business can participate. We encourage as much competition as possible. In certain cases there is a certain contract, whether they are very small or there is a timeframe, and that's why we... Let's not forget that my department is in steady communication and consultation with the business community and industry. Therefore, we have an idea of what is in the market.

Sometimes, because of the size of the contract, or because of the circumstances, we use the ACAN system to put it in the system out there and see if there is more than one firm, more interest, and then we respond to the regular bidding process. Definitely I encourage and pursue that, when it's possible, and it should be competitive. I encourage my officials, and my officials encourage their co-workers to make sure that the competitive process is there and that it is there for everybody.

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Mr. Andy Burton: Well, I do appreciate that answer, but if I may quote from Hansard, 36th Parliament, November 3, 1997, the honourable minister stated: “I can assure this House and my honourable colleagues that all government contracts”—all government contracts—“are awarded by public tendering and open to all.” I'm hearing that this isn't necessarily the case, and I think our concern is that they're not open to all. Why aren't they? The minister himself has said that they are open to all.

Mr. Alfonso Gagliano: They are always open. ACAN, sir, is open to everybody. A call is put out on the MERX system, and if there are people who want to bid, we go through the process. But if there's nobody or if there's only one company... We only use the ACAN system when the contract is small or when certain time factors come into play. The ACAN system is open to everybody, and we say, look, we need this type of service or product, so are you interested? Indicate that you are interested, or we go through the normal process, which is time-consuming and which also takes resources.

I believe I carry out the statement you quoted to me about Treasury Board guidelines. Maybe someone should quote the total statement I made in the House.

Mr. Andy Burton: That does explain ACAN to some degree, minister, but there are also approximately 18% of contracts that are sole source, which in order words don't go out for tender, so—

Mr. Alfonso Gagliano: Treasury Board policy says that contracts of $25,000 and less do not necessarily have to go through the regular bidding process. We delegate authority to the departments for contracts above $25,000. So yes, a certain number of contracts for $25,000 and less go sole source because of the small value of the contract.

Mr. Andy Burton: We actually have a number of documents provided by your officials, minister, that describe contracts in excess of $1 million that were done either through sole source or through ACAN. This is what we're having some difficulty with. Most of them are for high-tech or military projects, and I understand some degree of need is involved, but it seems as if there are an awful lot of them. I have a fairly lengthy list, and I wonder if you can explain why so many contracts are awarded through sole source or ACAN at that high dollar value level?

Mr. Alfonso Gagliano: For sole source contract awards, you yourself quoted the figure of 18%. There are 19% that come under under ACAN and 63% that are tendered. Now, if you add the 63% to the 19%, it makes 82%, I believe. If you look at what the U.S.A. and other governments are doing in this regard, I think our statistics are very good.

There are sometimes contracts of $1 million that, because of the nature of the contract—perhaps defence or security—might be sole sourced because of their nature and sensitivity.

However, I'm on record in a letter as instructing everybody that any contract above $25,000 should be tendered. Again, there are exceptions, and Treasury Board guidelines provide for those exceptions in very specific circumstances.

The Chair: Mr. Burton, you have two minutes left, and I just want to remind both your and the guest that questions and answers should come through the chair so it doesn't become too personal.

Mr. Andy Burton: Thank you, Mr. Chair. I'm not trying to be personal—

The Chair: No, I know you're not. I'm just trying to...

Mr. Andy Burton: Thank you.

We have a number of communications-type contracts for communications services that were awarded on an ACAN basis. Some of them were for fairly substantial sums of money, including one for almost $10 million. I wonder if the minister could define to me what kind of things these communications services entail, especially for those large dollar numbers?

Mr. Alfonso Gagliano: In terms of communications, departments ask us to certify accredited communications firms in the advertising and communications services sectors, and we go through the normal competitive processes when we put it in the MERX system. There is a committee that is made up of Public Works officials and officials from the department or agency asking for the procurement, plus members from the private sector in the communications industry.

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The candidates are interviewed, and according to the answers given to whatever is asked of them, it is determined whether the firm is qualified to deliver a service. From the qualifications of the firms and according to the service required, the department in question will award communications mandates.

Mr. Andy Burton: Just one minute. The problem I have, Mr. Chairman, is right here. It's the supply program business volume for sole-source contracts awarded worth over $1 million. There's one here for $10.5 million. I have another one for $9.5 million. Those are very substantial sums of money. To think that it's sole source is somewhat disconcerting. How does the minister's department justify this level of sole-source contracting? That's my concern.

Mr. Alfonso Gagliano: Mr. Chairman, this is already the second time the honourable member has mentioned sole-source contracts in communications of $9 million or $10 million. I would perhaps like to have the details so I can give an educated answer. I would definitely be concerned myself as well if there were a sole-source communications contract worth $10 million. There has to be a reason, so I would at least like to see the details in order to give the appropriate answer, Mr. Chairman.

The Chair: Mr. Burton, the minister will look at those questions in particular if you furnish him with the information. You would forward it back to the—

Mr. Alfonso Gagliano: I will give the information to him through the clerk.

Mr. Andy Burton: I certainly thank you, Mr. Chairman. Thank you, Minister.

The Chair: Okay, you're out of time. We'll go to Mr. St. Denis of the Liberals for ten minutes.

Mr. Brent St. Denis (Algoma—Manitoulin, Lib.): Thank you, Mr. Chair.

Thank you, Minister, for being here with your officials. One of the things the federal government has been noted for is its commitment to social housing in this country. We know that of course there's an endless need. The federal government has responded in a very helpful and positive way. I know CMHC, through its program that allows people to get a mortgage with only 10% or even in some cases 5% down, is probably one of the finest programs there is to make sure that families can get access to affordable housing.

I also wonder if under the Canada Lands Company there are other ways apart from CMHC that Canada has been able to help make sure that our communities are able to respond to the needs of lower- and fixed-income families in our country.

Mr. Alfonso Gagliano: You know the government is committed to encouraging the construction of affordable housing. It was mentioned in the Speech from the Throne. We're working to develop such a program in cooperation with the provinces, the municipalities, and any other groups that want to join us in helping to create as many affordable rental units across the country as possible.

Concerning your specific question about Canada Land, I believe you're referring to situations where there is surplus land in Canada that could be made available to help reduce the cost of a unit. In 1998, I believe, I and my colleague Claudette Bradshaw, Minister of Labour, announced an omnibus package. In that there was a program affecting every piece of land that belongs to the crown. To encourage departments to dispose of land and property they didn't need, we created a $10 million fund. Whenever there is land available, the department in question won't be penalized if it disposes of the land for a minimal cost. It can draw up to the market value through that fund.

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This fund is administered by Public Works, and we have already started seeing some cases coming forward. Naturally it's a new program, but I hope that through this we can put more land available for buildings into the inventory. The program is also for the renovation of old properties that are not being used—even if they are commercial or industrial properties—and for transferring those shelters to the homeless and to make affordable units. So yes, we are doing something in that direction.

Mr. Brent St. Denis: Thank you.

The Vice-Chair (Mr. Jay Hill (Prince George—Peace River, CA)): Will you be sharing your time?

Mr. Brent St. Denis: Yes.

The Vice-Chair (Mr. Jay Hill): Mr. Proulx.

Mr. Marcel Proulx (Hull—Aylmer, Lib.): Thank you, Mr. Chair.

[Translation]

Good morning, Minister. I would like to welcome you and your officials to this meeting. As I am sure you have guessed, I would like to talk about the management of facilities in the greater National Capital Region. As you know, I am particularly interested in this subject. I know that there have been some acquisitions and that you have an acquisition policy. Could you explain the government's policy in this regard, please, Minister?

Mr. Alfonso Gagliano: Thank you for your words of welcome, Mr. Proulx.

We too have a policy. If I understand your question correctly, it is about the property management policy for the National Capital Region. Since the creation of the National Capital Region, our policy has always been to have 75% of the Canadian government buildings on the Ontario side, and 25% on the Quebec side. All my predecessors have always tried to comply with this policy. Of course, there are always developments in the real estate sector, but I would say that we try to respect this equation almost to the letter.

Mr. Marcel Proulx: But is there an overall policy? A number of buildings have been purchased and some have been rented in the National Capital Region. The federal government has a policy on the purchase or rental of buildings not only as regards the breakdown between Ontario and Quebec, but in general.

Mr. Alfonso Gagliano: Yes, of course we have a rental policy, and in some cases we own the buildings. In recent years, we have adopted a rental policy, but in some cases we opted for purchasing, when this was more economical and appropriate. Recently, for example, we purchased the Ottawa City Hall. We are negotiating for other buildings. Depending on the strategic advantages and the needs of departments, we negotiate either the purchase of the building or a long-term lease.

Mr. Marcel Proulx: I'm assuming I have a few minutes left, Minister.

An initiative was undertaken at the Canada Information Office a few years ago. It was administered very well and produced significant results. I know that it bothered many people, but the results were very valuable. I am referring to the visits by ministers, which, to date, have been mostly in Quebec, I believe. Do you intend or does the CIO intend to expand these activities to other provinces and other parts of the country?

Mr. Alfonso Gagliano: The Canada Information Office is, of course, an agency of the Canadian government, and therefore a national agency that serves all of Canada. The Quebec ministerial tour was organized at the request of Quebec ministers and, naturally, if we go this way, there will be other discussions in other regions. We are there to serve the whole country. Any request from another region will certainly be analyzed and acted on if it seems worthwhile. We intend to continue with this policy.

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Mr. Marcel Proulx: Thank you, Mr. Minister.

[English]

There are about two minutes left for the government side.

Mr. Shepherd.

Mr. Alex Shepherd (Durham, Lib.): Minister, I am certainly interested in some of our objectives in sustainable development and in looking at the stock of buildings owned by the federal government. I note on the performance report where it talks about the objectives you previously sought, which were to have an inventory of all the buildings and to identify those areas where there would be a sort of cost benefit from implementing these transfers. It says that you have done that in 53% of the cases. Is there any kind of estimate as to how much costs are reduced as a result of those efforts and how much more costs we could reduce if we sped that process up?

Mr. Alfonso Gagliano: So far we have been working on saving energy, for example, and on installing new technology in buildings in concert with the private sector. Over the years the savings will pay for the cost of the transformation of the system. We continue to look at every case, every building, and every piece of property. I will ask my deputy to give you the details.

Ms. Janice Cochrane (Deputy Minister, Public Works and Government Services Canada): Thank you, Mr. Chair.

As you know, the federal buildings initiative is a program that is intended to maximize energy efficiency and conservation in federal facilities with minimum capital investment. This has been achieved to date through partnerships with the private sector at no up-front cost to the taxpayer.

We have in phase one 44 projects involving 29 contracts. They reduce energy costs by approximately $6.5 million per year, have created 672 jobs, and have reduced greenhouse emissions over the eight-year period by 208,000 tonnes.

Mr. Alex Shepherd: It says that you've implemented that. I presume that's part of the implementation process. In 53% of the areas you have identified, you just told me that you can reduce government costs by $6.5 million a year. What would be the anticipated savings from the rest of the implementation?

Mr. Alfonso Gagliano: I don't think we have the exact figures on what that will be. We are still working on this with the private sector. First of all, to avoid the cost of doing the transformation and for the saving... We naturally have to pay for the installations before we see the savings directly in the books of the Government of Canada, and this will take a number of years. Our objective is to reduce the consumption of energy. We have also in our service section a policy to buy green and all that stuff. On this we are definitely trying to do our part.

Mr. Alex Shepherd: I have one last question.

The Chair: No, the time has expired. I'll pick you up in the next round.

We'll now go to Monsieur Laframboise.

[Translation]

Mr. Mario Laframboise (Argenteuil—Papineau—Mirabel, BQ): Thank you, Mr. Chairman.

Naturally, my question is directed to the witnesses. First of all, I'm pleased that our committee is the first which the witness has attended. My question has to do mainly with the witness' responsibilities in the area of public works.

On November 15, 2000, the newspaper Le Devoir reported on the talks that had taken place in the riding of Beauharnois-Salaberry one day earlier. You were there, Mr. Minister, with Ms. Robillard and other candidates, and you announced a promise to invest 357 million dollars to build two bridges and a section of Highway 30.

Well, a great deal of water has passed under the bridge since then. On February 27, 2001, Minister Chevrette sent the Transport Department an offer to give effect to the announcement that had been made as part of the election campaign, one of the results of which was to get Mr. Marcil elected. He has no doubt been grateful to you since then.

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And so a clear offer was submitted by the Quebec government, a proposal for funding the extension of Highway 30, south of Montreal. The cost, which was estimated at 632 million dollars in 1998, had grown to 730 million dollars by 2001. Minister Chevrette was proposing that the federal and provincial governments sign a memorandum of understanding that would allow for participation by the private sector. Under the MOU, the two governments would equally split the costs that were not paid by the private sector.

As was reported in the media, you were cut to the quick and you reacted sharply to Mr. Chevrette's proposal, reminding him that there were existing programs that should be used. However, the program that covers, among other things, the construction of the two bridges and the highway section is the Strategic Highway Infrastructure Program. This is the only federal program that exists at this time. This program is worth 600 million dollars over five years, and Quebec's share is 108.5 million dollars, which represents 27 million dollars per year over five years. This is the only money that is currently available to carry out all infrastructure work, including the bridges that were announced.

Well, the Transport Minister reacted immediately, saying that he intended to call for tenders from the private sector. The Quebec government proposed that a memorandum of understanding be signed and that the federal government commit itself to paying its half, excluding any amounts that would be assumed by the private sector.

Mr. Chairman, is the witness prepared to give his full support, so that the promise he made last November can be fulfilled, and is he prepared to tell us today that the money is available and that the federal government is ready to pay its share and to sign an agreement with the Quebec government so that we can finally complete the two bridges on the south shore and the highway section for which the people in this large region on the south shore have been waiting for several decades?

Mr. Alfonso Gagliano: Mr. Chairman, I thank the honourable member for his question, even though it does not come under my responsibilities as Minister of Public Works and Government Services. The Minister of Transport is the one who is responsible for this file, although I have been involved in certain aspects of the matter. Therefore, if I may, I will make some comments and outline the government's current position as announced by the Minister of Transport a few weeks ago, if I'm not mistaken.

First of all, a few weeks ago, Minister Chevrette announced his transportation plan for the greater Montreal area. At that time, he clearly stated—and this is documented in the media—that the federal government should build the two bridges and that he would finish Highway 30. That is what was reported in all the newspapers, on television and on the radio.

That is when we took up the challenge to build the bridges that the Quebec Transport Minister had issued to us. As you know, the Federal Bridge Corporation was created after the Seaway privatization. The Corporation carried out a preliminary study of the situation and recommended that the government build these bridges in partnership with the private sector. So, we are talking about toll bridges.

It is true that, during the election campaign, in the riding of my colleague here, Mr. Marcil, to whom I give my respects, we announced that, as a government, we promised to build the two bridges and the seven or fourteen kilometres of highway linking the bridges, including access infrastructure. We said at that time, and I repeat it, that we would do it in partnership with the private sector. As you said, it was an election promise that has now become a government commitment, because the Transport Minister announced this project. For projects of this type, we send out requests for information, as we did for the Confederation Bridge. We have not yet called for tenders for the bridge construction, but we are using the RFI process to solicit proposals from the private sector and from the bridge construction industry on how we could build these bridges with the private sector.

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Minister Chevrette then changed his position. He had asked us to build these bridges, but he subsequently said that he wanted to build them himself and he asked us for the money. We, for our part, were responding to the call that he had sent out a year earlier. He has now changed his position. We will see what happens. We are currently in a request for information process. The Transport Minister has already answered by saying—I don't have the letter here with me—that relations were good and that he could discuss the matter. However, it is not a good idea to constantly change one's position—one day they ask us for certain things and the next they tell us that they want to build these bridges. We are always prepared to talk. The Transport Minister has always said that he was prepared to sit down with Mr. Chevrette to discuss not only Highway 30 and the bridges, but the overall transportation system in Quebec as well.

Mr. Mario Laframboise: Mr. Chairman, I would just like to point out to the witness that Mr. Chevrette's proposal was submitted on February 27, 2001, and that the decision of the Transport Department to call for public tenders was made on April 9, 2001.

Mr. Minister, you say that the Quebec government changed its mind. It is the Canadian government that changed its mind. The proposal put forward during the election campaign was that both governments be involved together in both projects. The Quebec government reacted on February 27 by proposing a memorandum of understanding that I can table here, with the committee, Mr. Chairman. I can table the memorandum of understanding put forward by the Quebec government. So, this proposal was made on February 27, and it was the federal government that decided to call for public tenders.

My problem is that, even if you call for public tenders, there is no money. All there is in the budget is an amount of 108 million dollars over five years, to be taken out of the funding that was announced. There is no additional money in the government's budget up to the year 2002, unless you intend to announce to us today that you are going to increase spending, which would be a great thing for all of us, including my colleague Marcil, who would be very happy if funding were announced today, Mr. Minister.

Mr. Alfonso Gagliano: I myself have been clear on this and I will continue to be. During the election campaign in November, we said that we were going to build two bridges and 14 kilometres of highway with the private sector. Furthermore, Mr. Chevrette, a few weeks after the election, said that this was an election trial balloon and that we had no intention of keeping our promise. We know that, after the election, the government and officials had to examine our commitment, and we initiated a request for information process in early April.

I repeat that there is a difference between a request for information and a call for tenders. When we call for tenders, we solicit bids to build the project. We are not there yet. We are currently in the middle of a request for information process. This is the first step, the process that was used for the Confederation Bridge. Industry and the private sector are asked if they are interested in building a toll bridge, how they would go about doing it, what they would require from the governments and what would be their commitments and their responsibilities. That is the stage we are at now.

There is nothing to prevent us from discussing the matter with Mr. Chevrette. However, I find it strange that, after criticizing us the week before he sent his letter to the Transport Minister because we were not keeping our election promise, he is now criticizing us because we are keeping our promise and going ahead. This much is clear. We made commitments and we will deliver on them. If Mr. Chevrette wants to come on board, well, he should hook up with the Minister of Transport of Canada, Mr. Collenette. I am sure that the latter would be very pleased to sit down with him, as he does regularly, moreover, and discuss the matter.

[English]

The Vice-Chair (Mr. Jay Hill): Thank you, Mr. Minister.

That concludes the opening ten-minute round. We'll now go to the five-minute rounds of questions. Mr. Johnston.

Mr. Dale Johnston (Wetaskiwin, CA): Thank you, Mr. Chairman.

I'd like thank the minister and his officials for the presentation today.

I'd like to ask some questions on behalf of the rural route mail carriers.

I'd like to open by relating some of my experience with rural route mail carriers over the course of my lifetime. In my neighbourhood we had the same mailman for about the first 30 years of my life. He educated his family, he paid for his house, and he kept his car in good repair, which was quite a challenge, because the roads were so bad in those days that it took a lot out of your car to get through the country roads and deliver the mail. He managed to put enough aside to buy a new car from time to time, and he continued to do that until he retired.

• 1200

Since that time, we've had so many mail delivery people in our area that, frankly, today I don't know who delivers my mail. That's quite a departure from the days when they actually made a living out of delivering the mail.

That raises several questions in my mind regarding the tendering process and the methods by which they are remunerated, things such as fuel clauses in their contracts and several other issues in that regard.

As you would know, Mr. Minister and Mr. Ouellet, the rural route mail carriers are very much desirous of becoming employees of Canada Post rather than contractors.

Perhaps you could comment on those remarks, and then I'll have some other questions.

Mr. Alfonso Gagliano: Thank you, sir.

Before I ask Mr. Ouellet to comment on where negotiations are at this stage, let me just make a general comment.

When Canada Post was created in the 1980s, there was a specific clause in the Canada Post Corporation Act with regard to rural mail delivery that intended to keep that special—I'm trying to find a word—

Mr. Dale Johnston: Relationship.

Mr. Alfonso Gagliano: —relationship with rural Canada such as you were describing.

Naturally, with the passing of years there was contracting, there were changes, there were government changes, and the procurement system was changed at a certain time. The system allowed that one contractor could have more than one route. Then that created certain problems. With Mr. Ouellet leading the corporation, he looked at this and said this was a special relationship. That special relationship has continued, and that's why we came back to one contract per route.

I know that some contractors want to be employees. There was a debate in the House. There was even a vote.

I know that this issue is still being pursued by the rural mail contractors, but mostly by CUPW, which would like to organize that sector.

We have been in touch with the association. We're trying to have some meetings. Some meetings are successful and some are not.

I'm going to ask Mr. Ouellet to comment on where we are at this stage on this issue.

Mr. André Ouellet (President and Chief Executive Officer, Canada Post Corporation): Thank you, Mr. Minister.

It's quite clear that the vast majority of our rural route contractors have been doing this job for a number of years. I would say that more than two-thirds of the rural route contractors have been doing this job for over ten years.

We have established a procedure so that when the contract is up for renewal, the incumbent has an automatic preference, and negotiations take place with the incumbent to renew the contract. Indeed, it is in the interest of Canada Post to continue to use the same contractor if that contractor is doing a good job. There's no doubt that if the public is satisfied and the contractor is doing a good job, we prefer to continue the relationship with that person rather than to have to train a new person.

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There has been, as you mentioned—and I don't know exactly the specifics of your case—a change of contractors in the suburban areas of cities, because as the minister was explaining, there were companies that have been successful in winning a number of contracts, and that is a procedure we are phasing out. As contracts come due, we tend to favour the renewal of a contract with the incumbent or with the individual rather than with companies that administer a series of contracts.

You allude to the possibility that some of our rural route contractors would like to become employees. Canada Post's position is that we will respect the law. The law does not permit that at this time. We will respect the will of Parliament. But it is quite clear that the vast majority of those who are doing this service are happy to be contractors. They are small entrepreneurs who have more flexibility than employees. We know the union, CUPW, is actively supporting a certain group and trying to sign up people to ask to become employees, but the reality is that most of those that are dealing with us are not telling us that they want to be unionized. They want to continue the relationship that they have and continue to be entrepreneurs.

The Vice-Chair (Mr. Jay Hill): Thank you, Mr. Ouellet.

Mr. Johnston, your time has expired.

I would encourage our guests and the members to keep the questions and answers as succinct as possible. I have quite a list of members from all sides who would like to ask questions, and obviously we hope to get in as many as possible.

I'm going to the Liberals for five minutes. Mr. Bagnell.

[Translation]

Mr. Larry Bagnell (Yukon, Lib.): Thank you, Mr. Chairman.

[English]

I appreciate seeing you in the chair today. I've always appreciated the thoughtful level of research you've brought to this committee.

I'd like to spend my five minutes on the year of the volunteer. Having been volunteer of the year, last year, for Whitehorse, I feel a sort of semblance on me to be a watchdog and make sure the government does celebrate this. In fact, in that respect, I was happy to see Lance Koschzeck from the Yukon in the gallery yesterday with all the other volunteers being celebrated.

It's especially important to rural Yukon. We don't necessarily have the other resources to do everything, so we have thousands of dedicated volunteers in the Yukon.

I have one comment and one question. The comment is that for years, Donna McBee, Ross Findlater, and I have been trying to start a volunteer centre in the Yukon, and because it's a smaller population, we can't generate resources. So I'm going to be looking to various government departments for that funding, and I hope when I figure out which department might help in such an opportunity and they bring something to cabinet, you'll be supportive of that.

I'm also a coin collector. Since 1962 I've been a faithful customer of the Royal Canadian Mint. I haven't yet seen anything in the literature that I constantly get for being such a good customer, and I was wondering if there is a way that the Royal Canadian Mint can help celebrate the year of the volunteer.

Mr. Alfonso Gagliano: Thank you for that question. As a matter of fact, the president of the Mint is not with us here today because she is in Saskatchewan with the Prince, and they will announce a ten-cent coin to celebrate the International Year of the Volunteer. Today is the official announcement. You don't have the literature, but you will be receiving it, I hope, within the next few days. The first unveiling is today, with the Prince of Wales. I know there will be an announcement in a couple of weeks, and there will be one in Montreal, and one in Ottawa at the beginning of June, I believe, so I hope you'll participate.

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The Royal Mint is definitely participating in this major activity with this special ten-cent coin, which is a circulation coin. The experience we had with the millennium coins, the 25-cent coins, was that Canadians like to have these in hand and also in circulation. So this will be a ten-cent circulation coin, commemorating the International Year of the Volunteer.

Mr. Larry Bagnell: How much time do I have left?

The Vice-Chair (Mr. Jay Hill): You still have a couple of minutes.

Mr. Larry Bagnell: Thank you.

My second question is related to the website and the 1-80O-O-CANADA line, and I've also mentioned this to Treasury Board when they were here. I think rural Canadians in years gone by have felt somewhat detached from the federal government and all parties—it doesn't matter which party is in—because they're so far from government services. You can't have a $100,000-a-year salaried bureaucrat in a town of 200 people. No one could afford it; we'd go bankrupt. So we need new ways of getting information to them.

The 1-800-O-CANADA line has been a good initiative, the effort that has been put into that in the last few years, and now the website, and any interactive services we can deliver in the small communities. All the communities in the Yukon, except one, have fewer than 2,000 people. I want to make sure that you are fully behind this and will continue to add the resources that are needed to deliver government services in this way. I think it will bring rural Canadians more attachment to Ottawa and to the federal government, and in fact, to all the federal parties that are representing them.

Mr. Alfonso Gagliano: Thank you for that question, because I really appreciate being able to tell you that the 1-800-O-CANADA line is not only an easy number to remember, but is also probably one of the rare answering services where there is a human voice that answers the phone, and it's a success. This is a new service, of a couple of years, and the success is incredible. We have more than 6,000 calls per day; there has been an increase of 60%. I think it's important, because no matter where you are in the country you can call.

There is the 1-800 number, the website, which is www.Canada.gc.ca, and we also have the service centres in certain areas. We're also using Canada Post outlets whenever possible so that people can have the telephone line, the Internet for those who have Internet, or can go in person for service, so that they know what the Government of Canada programs are in order to take advantage of them.

The Vice-Chair (Mr. Jay Hill): Thank you, Mr. Bagnell.

We will now go to the Bloc, Mr. Lebel.

[Translation]

Mr. Ghislain Lebel (Chambly, BQ): My question is for the Head of the Canada Post Corporation, Mr. Ouellet.

You referred earlier to your contractors. You said that the great majority were interested in remaining contractors. However, it would appear that there are between 5,000 and 6,000 contractors, most of them women who deliver mail, who would perhaps prefer to have the opportunity to form an organization and negotiate their agreement in the form of a collective agreement. But section 13(5) of your governing statute prevents them from doing this. I know that you are aware of the problem. You have already told me that this provision, which was adopted when you were the minister of Canada Post and which you are therefore perfectly familiar with, served a purpose at that time. Is it still as relevant today?

Mr. Alfonso Gagliano: As far as that section of the act is concerned, I will let André Ouellet have the pleasure of giving you all the answers in a few minutes. Yes, it's true. As to the question of whether or not this provision is still relevant, there has been quite a debate on that topic. The unions came to Parliament Hill and we had a debate. I have looked at the whole matter several times, but I have not found any reason to change this provision.

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Where I agree with you... I met with the representative. I think there is no need to amend the act. That is why I asked Mr. Ouellet to meet with the association and sit down with it. They have an association. The association drew up a list of what it wanted. I was at the meeting with Mr. Ouellet. We were prepared to negotiate all of the items, but from the outset, the association did not want to discuss anything other than the issue of repealing this provision. I told them that the decision had been made by parliament itself, which had voted on it. I also told them that Canada Post was prepared to sit down with them, to recognize their demands and to negotiate an agreement. Mr. Ouellet can confirm this for you.

We're quite conscious that things are changing. Working conditions must therefore be re-examined. But to do that, isn't it necessary to do away with this provision? I'm not yet ready for that. I'll try to negotiate again, if it's possible, and come to an agreement without changing the legislation.

I'll give the floor to Mr. Ouellet.

Mr. Ghislain Lebel: It's always the same thing. I have to be happy with it, but—

Mr. Alfonso Gagliano: He could report on the state of the negotiations.

Mr. Ghislain Lebel: You know that this group is made up of women. Mr. Ouellet, my question is for you.

When the time comes to renew a mail delivery contract, you have people who are well set up in all areas of Canada telling each and every one of your contractors—I call that pretty heavy pressure—that the contract is going to expire soon, that someone has already shown an interest, but if they didn't mind dropping a few thousand dollars, maybe the contract could be renewed. All this is done based on the priority you set out earlier. As is the case in all Canadian sectors of economic activity, people aren't asking for costs to skyrocket or give out contracts; they're simply asking to at least keep their purchasing power. On the contrary, at Canada Post, your contractors are decreasing in numbers day after day. Unfortunately, they're almost all women. Listen, we're not asking for much. Those people are working for less than minimum wage. Canada Post just doesn't have any pity for their workers. The question is that blunt.

Mr. André Ouellet: Mr. Chairman, I think that Mr. Lebel has been told tall tales by the union people who are trying to increase the number of their members and get higher dues. All that is absolutely false. The rural contractors don't work for less than minimum wage, absolutely not.

Second, it's true there is a certain number of women, but there are not only women. Maybe 60% of the rural contractors are women and 40% are men.

Third, as for contract renewal, for two years, since the minister and this committee—this was discussed during another Parliament—changed the procedures, there are no more contracts being negotiated for a lower rate, none of them. On the contrary, the contracts are renewed not only for a five-year period, but there's even a renewal option for five more years. So there's a ten-year possibility.

Earlier, the honourable member was talking about the matter of fuel. In the contract, there is now a clause providing that if the cost of fuel increases, there will be automatic compensation for the rural contractors.

I know that people are trying to tell stories to the members so that they'll be more sympathetic to unionizing those people. However, I will repeat that in the great majority of cases, those people don't feel exploited, on the contrary. The proof of the pudding is that when we call for public tenders, there are all kinds of people who want to get those contracts for rural mail delivery. If those people are working for less than minimum wage and are being exploited, why do so many other people want to get those contracts?

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The facts are that, in the context and in the environment in which these people work, the money is considered as being good and many people in the same area would like to get those contracts and do that kind of work.

The Vice-Chair (Mr. Jay Hill): Thank you, Mr. Lebel.

[English]

Your five minutes are up. Sorry, but they go very quickly. Unless the clock is wrong...

We now return to the Liberals for another five-minute round.

[Translation]

Mr. Marcil.

Mr. Serge Marcil (Beauharnois—Salaberry, Lib.): Thank you, Mr. Chairman.

Mr. Laframboise mentioned a matter I wanted to mention myself, Minister. However, I would still like to tell this committee that my colleague across the way came up with a bit of a simplistic analysis of the electoral results in the riding of Beauharnois—Salaberry.

He should perhaps, Minister, have taken into account the results of the vote during the last election for all of Quebec when we noticed a major decrease in the total vote in favour of the Bloc Québécois and a marked increase in the federalist vote. The Quebec Liberals got a share of the total vote higher than that in favour of the Bloc Québécois, notably in the riding of Beauharnois—Salaberry where the number of new votes in favour of the Liberal Party was somewhere in the order of 6 to 7,000.

And even if, in general, the proportion of the francophone vote decreased, it did increase rather substantially in the riding of Beauharnois—Salaberry. I find his reasoning, or analysis, a bit of an insult for the voters in that riding. I consider it a bit of an insult to think that people could have voted for a member only because an announcement was made that there was to be a bridge- building project. That means that the voters in our area are considered as imbeciles, and I don't believe that. People made a rather objective evaluation on the performance of the previous MP and the performance of the Bloc Québécois in general.

That said, Minister, I really liked your answer before, on the matter of bridges, to be specific. However, as one often tends to use information to one's advantage and thus mislead the population, people must know, and I'd like to bring this fact to their attention, that the rules of the game were changed by Minister Chevrette. The commitment made by the Liberal Party of Canada to Quebec, during the election campaign, was in answer to the request made by that minister, publicly and often, to the federal government to make a commitment about bridge-building after which the Quebec government would decrease the timeframe for building Highway 30.

And even his announcement, in Valleyfield recently, concerning 2 million dollars that are supposed to speed up the expropriation and the surveying was made because of an order from the National Assembly. We should not forget that. It is last October, in the year 2000, that Jean-Marc Fournier, the member for Châteauguay, tabled a motion in Quebec's National Assembly asking the government of Quebec to speed up the surveying and expropriation undertakings concerning Highway 30 so it could be ready by January 2002 at the latest.

At that time, Minister Chevrette amended the motion to include the condition that the federal government make a commitment for bridges. So what he announced in Valleyfield was done because of an order from the National Assembly. The National Assembly voted unanimously to order the Minister of Transport to speed up the process. So one can see that if the Liberals did not do anything about this matter, the whole thing would just die off.

That said, Minister, there's a lot of talk about the Canada Information Office or CIO. One often gets the impression that the CIO has offices only in Quebec. Once again, the population is being misled with that statement. I'd like you to tell us, Minister, if the Canada Information Office has chapters or offices all across Canada. At the same time, I'd like to know what kind of activities are being undertaken to serve the Canadian population.

Mr. Alfonso Gagliano: Thank you. I won't comment on the bridge question; I think I was clear earlier. My position is clear.

As for the Canada Information Office, there aren't necessarily offices in all provinces of the country because our basic budget, I'd like to remind you of this, dear colleagues, is only $20 million and that has been the case for four years now. However, we do have regional coordinators who are there precisely to help the different departments.

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Over the past few years, the CIO has become an agency for informing Canadians. We have a coordinating role. The regional coordinators, in every province, in every region of the country, enable us to gather the information that the Canadian government transmits to citizens to make them aware of its activities and programs, and to tell them how they can take advantage of them. Isolated regions like our colleague's region sometimes lose touch altogether because of distance and a lack of infrastructure. So, this is where we are. Our activities include a program of fairs and exhibitions. We participate in various fairs across the country and we also have other programs, of course. Last summer, we distributed a citizens information guide and I think that another one is being prepared. I do not know whether we have the time but I could let the executive director...

[English]

The Vice-Chair (Mr. Jay Hill): Unfortunately, Mr. Minister, due to the political analysis of Monsieur Marcil, there isn't sufficient time to add anything further to your comments.

Mr. Alfonso Gagliano: Next time.

The Vice-Chair (Mr. Jay Hill): Next time.

We now go back to the Canadian Alliance, and Mr. Johnston.

Mr. Dale Johnston: Thank you very much, Mr. Chairman.

Getting back to Canada Post and the rural route mail carriers for a moment, has Canada Post done an analysis of what it would actually cost if these rural route mail carriers became employees?

Mr. André Ouellet: Yes, indeed we did, and it would be in the many millions. If we were to pay the rural route contractors what we are currently paying letter carriers under CUPW, all our profit would be washed out.

Mr. Dale Johnston: Could you put a figure on that for me, sir? Could you put a number on that?

Mr. André Ouellet: It would be in the dizaines de millions—many tens of millions.

Mr. Dale Johnston: Perhaps one of the things the rural route mail carriers have been asking for is some sort of appeal process, if you were to consider a process whereby they could appeal their contracts if there were extenuating circumstances or whatever. Could you give any reason why they are restricted to delivering only Canada Post material?

Mr. André Ouellet: When we met with the representatives of this group, they were complaining—and Monsieur Lebel has raised some of the complaints, which we don't think are legitimate—that they were not treated fairly and that they could not really have fair negotiations for the renewal of their contracts.

We offered them the chance to go to a public tender process. We said to them that if they were not happy with the procedures of negotiating the renewal of their contracts, we would go to such public tenders, that we would open the tenders, and the ones with the lowest tendered bids would win. We would give some points for the price, some points for the experience, and some points for the performance. Obviously, a previous rural route courier would gain some points for performance.

They totally rejected this. They said they didn't want to have public tenders. Since their associations didn't want them, my answer to them was that they had to make up their minds, or that we don't have public tenders but renew the process through negotiations with them and they accept it.

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We said we would try to make sure it's fair, never reducing the amount, but giving them a certain percentage increase according to the increase in the cost of living. We would make a business deal with them.

That's what we're doing at the moment, and I believe we are treating them fairly. We try every time to renew the contract with those incumbents in a way that is sound business.

Now, whether or not we should have an appeal... An appeal to whom? It's very difficult.

The Vice-Chair (Mr. Jay Hill): You have time for one short question, Mr. Johnston.

Mr. Dale Johnston: Thank you, Mr. Chairman.

It appears to me that this is an ongoing thing between the mail carriers and Canada Post, and I'm wondering if it has gotten to the point at which Canada Post is considering some sort of alternative to rural route mail delivery. Has that ever been a consideration at Canada Post to go to some other method other than gate-to-gate rural route mail carriers?

Mr. André Ouellet: As you know, we have an obligation to universal services. As a crown corporation, we accept this responsibility. The private entrepreneurs don't go to these parts of Canada. In fact, they use us as the last leg of delivery. So we do not want to abandon the service. We think people living in rural Canada deserve a service, and this is a good way of doing it. We've been doing it for a number of years, and in a good fashion. The service that is delivered is, by and large, a very good service.

I repeat that our dealings with the vast majority of our rural route contractors is very good. There are some people who are activists who want to become unionized, and they are receiving the support of one union in particular to become unionized. But at the moment, I do not see major failures in the service and I do not see great dissatisfaction with the overwhelming majority of rural route contractors.

Mr. Dale Johnston: Do you see a departure from the service?

Mr. André Ouellet: No, I think the service is relatively good, and we want to keep it.

The Vice-Chair (Mr. Jay Hill): Thank you, Mr. Johnston.

We now return to the Liberals.

[Translation]

Mr. Dominic LeBlanc (Beauséjour—Petitcodiac, Lib.): Thank you, Mr. Chairman. I would also like to welcome the minister and thank him for his answers, and also let me tell you, Mr. Chairman, how glad I am to see Mr. Ouellet back on Parliament Hill.

I would also like to congratulate the government and the minister for the labour relations that now prevail within the Canada Post Corporation. I have studied the labour relations in these corporations to some extent. There has certainly been a great improvement as compared to previous years. I think, Mr. Minister, that you deserve our thanks and our congratulations.

Let me ask you, Mr. Chairman, whether the minister could give us a general overview of the labour relations that exist between the Canada Post Corporation and its various unions, and perhaps he might give us an overall picture of what to expect in the future, during the coming years, in terms of labour relations within the Canada Post Corporation.

Mr. Alfonso Gagliano: Mr. Chairman, thank you for your welcome. Everyone surely knows that in the past, labour relations between the Canada Post Corporation and its unions were not always the best, despite the efforts we made. We had an 11-day strike in 1997, after which, I think, we succeeded in establishing more harmonious labour relations. As I said in my opening comments, we signed the contract for which you congratulated me, but these congratulations should really all be addressed to Mr. Ouellet who, as president, finally succeeded in establishing good labour relations.

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So I accept your congratulations and I transmit them to Mr. Ouellet. I will also ask him to inform you about the labour relation situation in the Corporation.

Mr. Ouellet.

Mr. André Ouellet: There are four unions in the Canada Post Corporation. The collective agreement with the Canadian Union of Postal Workers will expire in 2003. We have a supervisors' association called the APOC. We just reached an agreement on principle with it regarding a four-year collective agreement which should be ratified within the coming weeks by the employees of that union.

Early next year, we will be negotiating two new collective agreements: one with the Postmasters Association of Canada, and the other with a union affiliated to the Canadian public service, which is that of our supporting staff. The latter should also be negotiated late this year and early next year.

Of course, we hope that we will be able to sign collective agreements with the other two units that represent our employees. There is no reason to believe that we will not reach an agreement, and this means that labour relations in the Canada Post Corporation are stable and good. I therefore encourage all our clients to put their trust in us because we can, thanks to good labour relations with our employees, deliver efficient service to the population.

[English]

The Vice-Chair (Mr. Jay Hill): You still have time for one short question.

Mr. Dominic LeBlanc: That's fine, Mr. Chairman. Thank you.

The Vice-Chair (Mr. Jay Hill): Thank you.

Mr. Proulx.

Mr. Marcel Proulx: I do have a question, Mr. Chair.

[Translation]

Mr. Minister, Mr. Ouellet, UPS, a private company, alleges and claims that the Canadian government has not properly regulated the Canada Post Corporation and accuses the Corporation of funding its competitive services by using revenues from postal services. Could you please shed some light on that, Mr. Ouellet, or Mr. Minister?

Mr. André Ouellet: No doubt, an article in NAFTA allows private corporations that feel that they are being unfairly treated to sue the government. This lawsuit is not directed at the Canada Post Corporation but rather against the Canadian government. They are saying that the Canadian government is not regulating the Canada Post Corporation properly and that as a result, the Corporation is competing unfairly against this American company.

Obviously, this lawsuit seems rather far-fetched to us given that the Canada Post Corporation has provided service here in Canada for many years. We have been delivering mail, parcels and registered mail for a very long time. We have provided our services for many years, well before UPS ever came to Canada. It is competing with us over parcel post. We were providing this service even before it came here. We are not the ones who are beginning to compete with it, UPS arrived after us.

Do we have enough regulations? I think that we do. The system of regulations in the United States for American postal services is certainly different from the system of regulations in Canada. But I think that the Canadian government has the right to decide on the way it regulates its crown corporations. I think that our government should legally win this case because we have regulations. The fact that UPS operates in Canada along with some 200 other mail companies clearly shows that there is room for competition. Those people are in no way being forced into a situation where they cannot compete with us.

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Secondly, the government has subjected us to very strict obligations. We cannot do anything at will. The price of mailing a letter cannot go up on account of a formula that is equivalent to two-thirds of the increase in the cost of living. The price of stamps in Canada is the second lowest among all industrialized countries in the world. Only Australia has cheaper stamps than we do.

[English]

The Vice-Chair (Mr. Jay Hill): Mr. Ouellet, I'm afraid we're well over time for that particular round.

We'll go to the Canadian Alliance and Mr. Burton, then the Bloc Québécois, and then back to Mr. Shepherd, who indicated quite some time ago that he wanted another round.

Mr. Andy Burton: Thank you, Mr. Chairman. Will we have time for another round, or will this be the last round?

The Vice-Chair (Mr. Jay Hill): Well, it's going to be tight.

Mr. Andy Burton: Okay. Because I have a couple of closing comments I'd like to make.

First of all to the minister, I have a point of information. The information on sole-source contracts over $1 million was supplied to all members of the committee by his department. However, we'll ask the clerk to make sure he has that information.

As to the minister, in the strategic directions laid out for his department in part III of the main estimates nowhere does it mention anything about the need to increase the number and percentage of competitive bids. Even at 18%—and I dispute that, I think it's closer to 35%—sole-source still represents almost $2 billion. A fairly large number of cases have gone to the Canadian International Trade Tribunal, and we lose 45% of those cases. That's telling me that 45% of the time the government is not using fair practices when issuing contracts. It would seem that officials realize we do have a bit of a problem here and we need to get back to open competition at all levels. The department is also foreseeing a 56% increase in business volume over the next three years. So my question to the minister is what are we going to do to ensure that suppliers do not see the necessity to use the CITT challenge procedure in the future?

Mr. Alfonso Gagliano: Mr. Chairman, if we look at the number of contracts my department manages, I think the number before CITT is not as disproportionate as we would see in industry and in other areas. There are sometimes cases, and I have to remind the member that most of those cases are in the high-tech industry, an industry which is evolving rapidly, so that sometimes procurement becomes more complicated and leaves the door open for a claim, a contestation, and so on. But for the record, yes, there were 227 complaints to the CITT, and only 37 were valid. So if you consider the number of contracts, I think... And I want to repeat that most of those cases were in the ITT industry, which is evolving in such a rapid fashion that it definitely creates problems, even for the ministers, not only the officials. I appreciate their hard work, but sometimes they've complicated my life too.

Mr. Andy Burton: Okay. I appreciate the answer.

Quickly, would we have a value on those 37 valid complaints—and that number is correct? Do we have a dollar value?

Mr. Alfonso Gagliano: If she has a value to give...

Ms. Jane Billings (Assistant Deputy Minister, Supply Operations Service Branch, Public Works and Government Services Canada): Are you looking for the value those contracts represented?

Mr. Andy Burton: Yes.

Ms. Jane Billings: We don't have that here, but we can provide it afterward.

Mr. Andy Burton: I'd appreciate that information.

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Given the concerns about sole-sourcing, ACANs, the dispute as to whether an ACAN is a sole-source—either way it's a very substantial number—would the minister not be prepared to issue instructions to his department that they've got to get away from this sole-sourcing and even the concept of sole-sourcing, given the dollars involved and the need for openness and fairness in all government contracting? Would the minister commit himself to that process?

Mr. Alfonso Gagliano: Mr. Chairman, I have been doing that, I believe, since I became a minister, at the beginning of June 1997. As a matter of fact, every time there is a sole-source contract above $25,000, my officials come and brief me and ask my opinion. Usually the only reason I say yes is because the circumstances of that specific procurement cannot go otherwise, and we use the ACAN as much as we can.

I just was given information. If you're referring to that communication contract of $10 million, I believe that is the contract we gave to the Canadian Bank Note Company, and that was for passports. You understand the nature of passports and the problems we have sometimes. We decided for security reasons... If there are any others, I would like to know.

Mr. Andy Burton: We'll refer them to you.

Mr. Alfonso Gagliano: Okay, thank you.

The Vice-Chair (Mr. Jay Hill): Thank you, Mr. Burton.

Monsieur Laframboise.

[Translation]

Mr. Mario Laframboise: Thank you very much, Mr. Chairman.

First, to answer my colleague from Beauharnois—Salaberry, I see that he is preparing for coming elections, but I trust the people. If the bridges and the highway do not get built, they will obviously know what choice they will have to make, and I am convinced that the Bloc Québécois will win votes for the very simple reason that we are working for the entire south shore of Montreal.

Of course, if we look at the way that the current negotiations between the federal government and the provincial government are going regarding things that fall under provincial jurisdiction, it is clear that no conclusion will be reached. The federal government must first understand that this is a matter of provincial jurisdiction. Thus, it must sit down with the provincial government which will file memoranda of understanding that the federal government will refuse to sign. Secondly it must include in its budgets the expenses to cover the cost of the work. So that was my brief comment, Mr. Chairman.

Of course, I am putting this question to Mr. Ouellet. Earlier, my colleague Lebel mentioned that there was a problem with independent contractors. Mr. Ouellet, when employees—because they are basically your employees, they are contractors who make bids—request important things from you such as having the same insurance as State employees... Basically, when your public servants discuss contracts, I know from my own experience that the situation of a contractor within the federal public service is not clearly explained to them; this means that they are not told that they have no part in the insurance plans. In case of illness, they are left to themselves and they often have to pay more than what they earn from a contract if they want to succeed in finishing it even while they are ill.

Thus, somewhere in the negotiations and in what the employees have proposed, as contract employees, there are things that are quite reasonable in the twenty-first century. I do not understand why those things do not come directly from your department, and why you do not take note of the fact that they do not have any consideration, regarding insurance, regarding... This is merely an issue of human dignity. When someone is on contract and falls ill, he basically has no protection or insurance because nobody tells the contractors that they should beware because if they get sick they must take that into account and tender a high enough bid so that they can buy insurance, etc. Thus, they are not considered as employees. Even if they are hired on contract, they are not considered, with regard to insurance and other necessities, as State employees. I think that you are going astray here and that you should offer certain things on your own to your entrepreneurs and in answer to requests that were made.

Mr. Alfonso Gagliano: Mr. Chairman, before giving the floor to Mr. Ouellet to let him answer this detailed question, I'd simply like to point out to the honourable member that bridges and the waterways over which they are built are under federal jurisdiction, and that Highway 30 falls under provincial jurisdiction. Besides, Mr. Chevrette has repeatedly asked us to build these two bridges, and we will build them.

As for the rest, Mr. Ouellet will answer your question regarding contract employees.

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[English]

The Vice-Chair (Mr. Jay Hill): Mr. Ouellet, you have about two minutes to respond. That's the amount of time that's left.

Mr. André Ouellet: I'll take less than that, Mr. Chairman.

[Translation]

I agree with Mr. Laframboise. In specific cases, we can certainly take appropriate measures. If you make a general statement and lead us to believe that all our employees lose money because they fall ill, I think that it does not correspond to reality.

Canada Post has always taken care to treat its employees in the best possible way and to treat fairly those who work for the Corporation under contract. I do not exclude the possibility of trying to find ways to compensate people who fall ill and who have the particular problem that you mentioned. But once again, you should know that there are gross exaggerations in the statements of those who are working in an attempt to unionize contract employees.

[English]

The Vice-Chair (Mr. Jay Hill): I'm sorry, you're out of time.

We'll go to the last round for the Liberals. Mr. Shepherd.

Mr. Alex Shepherd: I'll ask a very quick question. Maybe one of my other colleagues wants the rest of my time.

This is a follow-up to the previous question I asked. Maybe this would be more for your deputy minister. I don't know. I'm very interested in improving our reporting to Parliament and parliamentarians. You gave us some information about your ecological initiatives on buildings, saying there was a $6.5 million savings from some of the things you did, yet the actual performance report doesn't mention that. I use that as an example of where we can improve our disclosure to parliamentarians, that is, we could be more specific about the performances we have achieved.

I look at the plans and priorities. I look under the area of sustainable development, and it doesn't talk specifically about any of your objectives in this area. I look at the other shoe falling on the floor, the 53%. As to the other initiatives we have, presumably we ought to mention them in our sustainable development initiative and also maybe try to attach some kind of objective reporting as to what we were attempting to achieve there in the way of savings to the government. If we did that analysis through the whole performance report and then the plans and priorities, maybe we'd have a better reporting system.

Ms. Janice Cochrane: The member's comments are valid, and we will take them under advisement. We are continuously trying to improve our reporting to Parliament. In the preparation of future reports, we'll be guided by the suggestions the member has made.

Mr. Alex Shepherd: Would anyone else like to take the rest of my time?

An hon. member: Yes.

The Vice-Chair (Mr. Jay Hill): Excuse me, Mr. Bagnell had indicated to the chair that he'd like a little more time. There are about two minutes left.

Mr. Larry Bagnell: Either in his next round or after, maybe Mr. Johnston could explain to me a bit about consistency. Unless I misunderstood the interventions, they were both for spending more money. Every time there are agricultural subsidies and things like that, there are things for spending more money, but then your leader blasted the other parties yesterday for spending more money. Yet you expect us to believe that you actually want to lower taxes and reduce the deficit.

Mr. Dale Johnston: Do I get a chance to respond to that, Mr. Chair?

The Vice-Chair (Mr. Jay Hill): No.

Mr. Dale Johnston: That's too bad.

Mr. Larry Bagnell: In the throne speech there was the theme of connectivity, the information highway and government online. The MLA from the small town of Faro in the Yukon has approached me and asked me how that could affect him. They're not yet connected with high-speed Internet.

Also, if you have time, I'd like you to comment on services online. I know, for instance, that the Indianapolis website is a tremendous model of government services online. Perhaps you could just explain how those two things will be done and how that initiative will go so that I can get back to my constituents.

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Mr. Alfonso Gagliano: I know that I don't have that much time. But let me say that Canada was the first country to connect all the schools across the country and the public libraries. We have committed to have e-government by 2004 so that all Canadians can address the government through electronic means.

We know that the challenge for all of this e-business is speed. The throne speech referred to the engagement, and definitely we will have to increase the capacity. The only way we can stay ahead and compete and be in the top four or five countries is by investing in the infrastructure of the e-business, and as a government, that is what we are committed to do. My department is working on the procurement process of e-government, and we're moving along. But, again, it's a very complicated business. It is a new technology. We are working together with industry, and we hope to have the best system for the best price.

The Vice-Chair (Mr. Jay Hill): Thank you very much, Mr. Minister.

There is a final round of about three minutes remaining. Mr. Burton.

Mr. Andy Burton: Thank you, Mr. Chairman.

I have just a brief statement. Because of some obvious inconsistencies in the whole government contracting process, in my mind anyway—for instance, the ACAN system, comparing the attorney general's interpretation of that process versus that of Public Works and Government Services—I feel that this committee should reconsider the need for a subcommittee on contracting procedures. I therefore put forward a motion that this committee form a subcommittee to review government contracting processes.

The Vice-Chair (Mr. Jay Hill): You need unanimous consent from the members.

Mr. Andy Burton: Yes, I understand that.

The Vice-Chair (Mr. Jay Hill): I'm not sure it's appropriate to take up the minister's time to discuss that type of motion.

If you have no further questions for the minister and his delegation, we'll proceed with motions. I know the Bloc Québécois has a motion it has presented, and we need to deal with that as well.

With that, I would like to thank Mr. Gagliano, the Minister of Public Works and Government Services; Mr. Ouellet; and the officials for attending today and trying to enlighten the committee with your knowledge and expertise. Thank you.

Mr. Alfonso Gagliano: Thank you very much, Mr. Chair. It's always a pleasure to come here and answer your questions.

The Vice-Chair (Mr. Jay Hill): I'll just allow a minute for our guests to leave the table. Then we'll resume the meeting with committee business.

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• 1300

The Vice-Chair (Mr. Jay Hill): Gentlemen, perhaps we'll resume. We have a couple of motions being presented, one for which we've received the required 48 hours' notice.

First, if you would like to seek unanimous consent even though it goes against the 48-hours'-notice rule, obviously the committee could make that decision, Mr. Burton.

Mr. Andy Burton: I would like to repeat the motion and seek unanimous consent to waive the 48-hour rule.

I move that this committee form a subcommittee to review government contracting processes and procedures.

The Vice-Chair (Mr. Jay Hill): Do we have unanimous consent at this time to—

Mr. Brent St. Denis: I would suggest that notice be given.

The Vice-Chair (Mr. Jay Hill): Thank you, Mr. St. Denis.

We don't have unanimous consent.

Mr. Andy Burton: Then I will present this as a notice of motion, and I will forward it.

The Vice-Chair (Mr. Jay Hill): Thank you, Mr. Burton.

Mr. Laframboise, you have a motion that you wanted to present to the committee. You have introduced it with the required 48 hours' notice.

[Translation]

Mr. Mario Laframboise: I will read it out to you, and then I will explain:

WHEREAS concern was raised about the safety of the locks in the St. Lawrence Seaway in the report of October 17, 2000, by Coroner J. Roger Laberge, I therefore move:

THAT the Standing Committee on Transport and Government Operations meet no later than May 18, 2001, to hear in particular from the following witnesses:

- Mr. Pierre Gauthier, President of Local 4320 of the CAW-Québec;

- Mr. Stéphane O'Brien, of Local 4320 of the CAW-Québec;

- Mr. Michel Drolet, Vice-President (Operations) of the St. Lawrence Seaway Management Corporation;

- Mr. Alain Messier, of Public Works and Government Services Canada.

To briefly sum up the situation, there was an accident on June 1st, 2000. Two elderly ladies were walking across the bridge, at the Sainte-Catherine locks. They crossed this bridge that crosses the shipping canal. Around 3:15 p.m., they came back along the same way and, as they crossed the bridge, it opened and began to rise. They became upset, they panicked and, finally, one of them was fatally thrown into the mechanism.

At that time, the personnel included three employees per shift, to watch over the safety of the locks at Sainte-Catherine. The coroner's recommendation is simple. It states:

I recommend that there be four employees per shift and that the fourth employee be assigned exclusively to the control tower upstream.

Obviously, this is a tragic situation because someone got killed, but it is also tragic because on August 31, 2000, the St. Lawrence Seaway Management Corporation advised its employees that in the future, there would not be three employees but only two employees beginning in the year 2001 to man all the different locks along the St. Lawrence Seaway, for instance in the Maisonneuve, Niagara, Iroquois regions and the entire southern area, northern area and central area.

I brought with me the notices sent to all the employees when they were laid off. This was a rather tough policy that began on August 31, 2000, and despite the accident, it is still being pursued. This policy will still apply during the coming year. Thus, all those who will use the locks along the St. Lawrence Seaway, such as pleasure boats, etc. should be aware that there will be less surveillance.

I think that all parties should be brought before the committee to find out clearly whether a good decision was made. A letter from the Minister of Transport Canada was addressed to various stakeholders regarding the delegation agreement with the St. Lawrence Seaway Management Corporation, it was signed by Transport Canada, to which the corporation reports on the daily management of its five-year plan on this. Thus, this organization is accountable to the department. Consequently, the committee should rightfully hear these persons to get a clear idea, and hope that this will be done before May 18, since the accident happened on June the 1st last year. As you know, when summer arrives, there are many pleasure boats and there will be less supervision.

I also brought a letter by a captain, dated November 27, who barely escaped another accident in one of the locks. He simply said that if there had been only two employees, it would have been a real catastrophe. I hope that you will heed this recommendation and that before May 18, we will be able to hear these witnesses, as well as those whom you will see fit to call before us.

The Vice-Chair (Mr. Jay Hill): Thank you, Mr. Laframboise.

[English]

The motion is obviously in order. It has followed the proper procedure.

On debate on the motion, we'll go to Mr. St. Denis.

Mr. Brent St. Denis: Thank you, Mr. Chairman.

With respect to my friend Mario, I'll be speaking not in support of but against his motion, for a number of what I think are very valid reasons.

We acknowledge the tragedy that did occur last June. Apparently the operator of the lift was distracted by a driver who was attempting to go through the barricade.

• 1305

Without doubt, safety is number one to Transport Canada, as it is to the authority in charge of that particular site, the St. Lawrence Seaway Management Corporation. Since the October 17 issuance of the report by the coroner, the management corporation has put in place a number of new measures, including new camera equipment and new monitors. Motion detectors are being evaluated, new operations and procedures are already in place, and other changes are being contemplated.

I think the particular item that Mario was focusing on is the size of the crew on staff at any particular time, and I think we want to distinguish between labour issues and the overall safety issues. I can advise the committee that, on the subject of the crew sizes, this issue has been referred to Human Resources Development Canada for a technical review in order to ensure that the proposed procedures are in line with the safety provisions of the Canada Labour Code. The seaway management corporation is prepared to do whatever is necessary to ensure that safety is assured.

I think I'll conclude, Mr. Chair, by saying it shouldn't be the position of our committee to manage or micro-manage the operations of government departments or their agencies. While we agree with Mario's comments about the tragedy that occurred, we don't believe it is necessarily a huge, systemic problem. Particular responses have been made to the coroner's report, and the issue of staffing is under a technical review by HRDC.

With that, in thanking the member for his motion, I would suggest that we won't be able to support it on this side.

The Vice-Chair (Mr. Jay Hill): Thank you, Mr. St. Denis.

Is there further debate, or are we ready for the question on the motion?

[Translation]

Mr. Mario Laframboise: I request a recorded vote, please.

[English]

(Motion negatived: nays, 6; yeas, 3)

The Vice-Chair (Mr. Jay Hill): Is there any further business that we need to attend to?

Mr. Dale Johnston: Yes, Mr. Chairman.

I would like to provide a notice of motion that I would like to have the minister and his crown corporations appear before the committee again. I think the throne speech covered several areas that we didn't even get a chance to talk about today. I'd like to ask some questions on the CMHC, for instance. I thought the session was very good today, but a bit brief, so I certainly would like to have an opportunity to question the minister and the crown corporations again. I don't have a written motion or a specific date in mind, but I guess it would be at the convenience of the minister, and as soon as we can arrange it.

The Vice-Chair (Mr. Jay Hill): Okay, you're just providing notice of motion at this point in time. You're not asking for the consent of the committee.

Mr. Dale Johnston: I'm just providing notice.

The Vice-Chair (Mr. Jay Hill): Okay, thank you, Mr. Johnston.

Is there any other business to attend to today that is of an urgent nature? Mr. Szabo, did you have an announcement that you wanted to make to the committee?

Mr. Paul Szabo (Mississauga South, Lib.): I move for adjournment. Are you hungry, Mr. Chairman?

The Vice-Chair (Mr. Jay Hill): I'm hungry.

I declare the meeting adjourned.