Report Card – September 21, 2005

Real Property

On September 21, 2004, Minister Brison gave his strategic vision speech for delivering services smarter, faster and at a reduced cost.
Budget 2005 confirmed that our goal is to find $925 million in savings over the next five years by managing our properties more effectively and improving the application of standards for office space.

A Request for Proposal is now posted on MERX to seek advice from the private sector on the most cost-effective, efficient and environmentally sound way to manage our portfolio. Over the past few months, we sought industry advice in developing the RFP for the study and have also retained the services of a Fairness Monitor through public tender to oversee the study's procurement process. We are now ready to conduct a fair, open and transparent procurement process to ensure the best expertise is hired for this very important study.
The study includes 326 buildings owned by the Government of Canada and will look at a variety of options for managing our portfolio on a long-term basis, including retaining ownership, leasing buildings while retaining ownership of the land, selling certain types of buildings, Real Estate Investment Trusts, or a combination of these alternatives.

We have been applying more rigorously our accommodation and fit-up standards. Just enforcing these standards is going to generate over one-half of real property's savings targets.

As part of our other cost-saving measures, we're taking a more aggressive and proactive approach in negotiating new leases in order to bring down the rental rates. Just on the leases we've negotiated so far during the first quarter of this year, we have achieved a net savings of about $5 million.
The savings come from achieving better rental rates when we renew our leases and by rigorously applying our accommodation and fit-up standards. As an example, we saved close to $2.7 million on an accommodation project for Statistics Canada.

We have also reduced our operating costs by contracting property management services to SNC-Lavalin ProFac. This will save millions of dollars per year over our estimated budget.

We are continuing to look at ways to deliver our services more efficiently and cost effectively. As a result, we recently launched the Management-Union Efficiencies Initiative through which we are exploring ways to improve some of our current business processes. The focus is on finding efficiencies and savings that will help us reach our commitments in The Way Forward while reducing the potential impact on jobs.