Media Room

Speeches

Speaking notes for the
Honourable Scott Brison
Minister of Public Works and
Government Services Canada

On the occasion of an address to the
Economic Club of Toronto

April 19, 2005
Toronto, Ontario

Check Against Delivery

Thank you, and good morning, ladies and gentlemen.

It's always a pleasure for me to be in Toronto. In fact, these days it's a pleasure to be anywhere but Ottawa. The old saying is that a week is a long time in politics.

Well let me tell you the forty-five minutes of Question Period is certainly a long long long time these days.

Back in September, I was still a rookie minister with training wheels. But with just two months on the job, I made my first big speech here in Toronto to outline my vision for my department of Public Works and Government Services — a vision to help change the way the government does business.

And in essence help transform the culture of government.

First I want to tackle head on what many Canadians are talking about and that's the sponsorship issue.

There have been allegations of unacceptable, in fact, disgusting activities.

But these are allegations, not facts.

The public has the right to be angry. I personally am very angry. I gotta tell you I could not and would not defend these types of activities. They are indefensible.

I have no difficulty — and am in fact proud to defend the actions of our Prime Minister and government in cleaning up this mess and getting to the bottom on this issue.

As you know, Prime Minister Paul Martin has not been ducking the fallout from this troubling situation and I don't intend to do it either.

Earlier I talked about Question Period.

People sometimes say it must be awfully tough to stand up there day after day to face the onslaught from the opposition.

Well in fact, I don't mind at all. Not when I believe in what I am saying and in what the Prime Minister of Canada has done.

He showed great political courage by setting up the Gomery Commission.

There may be difficult political consequences but I can say to you that it was the right thing for the Prime Minister to do. And it's going to all be worth it if we can change the culture of government for generations to come — by bringing in a new culture of respect for ethics and accountability.

Paul Martin is putting country before party, principle before strategy and courage before opportunism.

Right now the opposition wants to get to the polls, but I can tell you that on behalf of Canadians, Paul Martin wants to get to the truth.

When Justice Gomery does report, we intend to make sure that any profiteer or any guilty party is punished with the full extent of Canadian law.

And we also want to act decisively to make sure this kind of abuse never happens again.

I could spend the next twenty minutes talking about the things that have already been done:

• Establishing the Gomery Commission;
• Filing a statement of claim in Quebec Superior Court for $41 million from 19 companies and individuals involved with sponsorship;
• Bringing in an independent Ethics Commissioner;
• Introducing a new ethics package for ministers and MP's;
• Posting the travel and hospitality expenses of ministers, their political staff and senior bureaucrats on the web;
• Changing the way we appoint heads of Crown Corporations;
• Bringing in whistleblower legislation.

We have taken action to get to the truth and to make fundamental changes to help ensure that this doesn't happen again.

The Paul Martin government intends to earn, and I repeat earn the trust of Canadians, to govern with integrity and follow a culture of respect for ethics and accountability.

There is another way that the Paul Martin government is fundamentally changing the culture of government and that's by respecting its promises.

The Prime Minister promised to deliver on health care. His $41 billion dollars package did just that.

Municipalities are going to get a portion of the gas tax worth $5 billion over the next five years.

We've set aside $5 billion for child care.

Reached a new deal on equalization.

Invested in defense and foreign aid.

Put a stronger focus on the environment.

These are all promises made and promises kept.

We've even been able to deliver some tax relief.

That includes the elimination of the corporate surtax, cutting the corporate income tax rate to 19 from 21 percent, and raising the basic tax exemption to help low income Canadians.

Now there's a reason we can both make strategic investments and cut taxes — it started when Paul Martin as Finance Minister eliminated the culture of deficits and brought in a new culture of surpluses instead.

We've now had eight balanced budgets. The Canadian economic and fiscal situation is the best in the G-8. Canada is the envy of the world.

Still, we aren't resting on our laurels. Another change in the culture of government is about always respecting taxpayers' hard-earned money.

As you know, we recently undertook an expenditure review process. And in the budget, we outlined $11 billion in savings to reallocate from low to high priority areas.

From now on through good times and bad, we will continue to review expenditures as a normal way of doing business.

Who can argue with the idea that the government has a responsibility to continuously seek out ways to spend its money smarter and more efficiently? After all families do it, and of course you do it in your businesses as well.

And I am very proud that my department of Public Works and Government Services will contribute almost a third of the government's target for expenditure review.

In fact, we intend to find about $3.5 billion in efficiencies over the next five years.

The bulk of the savings – $2.5 billion – will come from being smarter in our buying of goods and services.

That's because Budget 2005 confirmed that Public Works and Government Services is going to be the procurement arm of government rather than scattering it among 98 separate departments and agencies.

We now intend to take a government-wide corporate approach to purchasing goods and services. And that means cutting costs by harnessing the government's bulk-buying power to get better prices.

We're also developing the Government of Canada marketplace with IBM - that will help us save money by simplifying the buying process as well as helping us reach the goal of cutting the time it takes to procure a good or service in half.

I could tell you so much more — some people get excited when they announce new spending, I get excited when I talk about saving money.

And that's where I now want to turn my attention.

The budget committed us to save almost $1 billion over 5 years in our office building portfolio. We're taking such measures as reducing the amount of space per employee in our buildings, and taking a more aggressive approach to leasing.

We also are saving money by outsourcing maintenance. Our most recent contract to SNC Lavalin-Profac saved $50 million per year over the amount budgeted.

Our overall goal is to become a more efficient, cost-effective and environmentally friendly landlord for the more than 200,000 federal employees we now accommodate across the country.

Today, I want to announce the next step we are taking to explore new creative ways on how we manage our office building portfolio.

We want to bring the same business-like and focused approach to the management of our real estate as we are doing in the areas of procurement.

Public Works manages one of the largest real estate portfolios in Canada — in total, we are the custodian of almost 7 million square metres of space. It's hard to picture exactly how much that is, but I know it's a heck of a lot.

We're a huge landlord. And we are a high cost one.

Our studies show that the federal government spends 20 percent more on a per square foot basis to operate our real estate than the private sector average.

At the same time, the buildings owned by Public Works are on average 43 years old, and will require some $2 billion in investments over the next five years to upgrade them. The issues around deferred maintenance are significant ones.

Our aging inventory is also not very energy efficient, and that's unacceptable.

We want our buildings to be "green" and to surpass any national or international targets for environmental sustainability. We want them to be an example to the world.

It also makes sense to have more flexibility to provide service to Canadians in areas of growing population as well as in smaller centres.

And we want to better house our public servants.

Above all we want to provide value for hard-earned taxpayers money.

So, clearly, the status quo is not acceptable.

That's why it's now time to move forward and see how we can best manage and green our real estate holdings over the mid to long term from 5 to 15 years.

That's why I am announcing today the publication of a draft Request for Proposals — it will seek outside advice on the most cost effective and efficient and environmentally sound way to accommodate our employees.

The study will specifically look at 327 buildings that represent 3.275 million square metres of space. These buildings have a book value of $3.3 billion.

This first step is simply to get input on what should or shouldn't be included in this study.

This consultation period will last one month. After that, we'll issue a formal RFP, hold an open competitive process and award the contract probably in August. We hope to have the final study by early in the New Year, and make a decision shortly after.

We want to look at all kinds of "lessons learned" — both successful and less successful experiences - as part of our decision-making process.

For example some private sector companies — CIBC, Royal Bank, Bell Canada — have decided to get out of the business of being landlords or owners to concentrate on their core businesses.

There is no doubt there are studies showing that if a larger organization uses a company that specializes in managing properties, there can be reduced costs as well as more efficient and effective use of office space.

Obviously commercial real estate management is not a core function of government.

If you ask Canadians — do you want the Government of Canada to invest your tax dollars in commercial real estate, some of you might say yes.

However, if you instead ask: "do you want the Government of Canada to manage your investment in commercial real estate," I expect the response would be overwhelmingly NO.

Commercial real estate is simply not the same as the economics of home ownership.

Direct ownership of office buildings may or may not be the best way to maximize value for tax dollars.

A large institution has to manage the buildings, and renovate them frequently to accommodate the changing needs of an organization.

It has to make them accessible to the public, and take care of health and safety and environmental issues.

Having said that, I don't come to this with a firm ideology on what must be done.

In fact, we want the study to consider a number of ways to achieve economic value for taxpayers while providing the capital necessary to effectively house public servants.

We do not want to exclude any option, be it public ownership or private ownership, that could give us the best possible value.

It could mean,

• outsourcing the management
• using public-private partnerships
• It could mean a REIT, or real estate investment trust.

In the current capital market environment, there is a strong appetite for this kind of investment vehicle. Frankly there's a lot of cheap institutional money looking to invest in a finite amount of Canadian Commercial real estate.

If that approach were taken, investment could come from public sector pensions funds.

For example, the Canada Pension Plan. Various pension plans for teachers. OMERS — the Ontario Municipal Employees Retirement System.

Or we should also consider la Caisse de dépôt et de placement du Québec.

So there are many ways that Canadian taxpayers could retain some equity yet still benefit from the discipline and value creation of the private sector. It's possible to get the best of both worlds.

The study will be looking at innovative approaches that have been taken elsewhere in Canada and abroad.

For example Australia and New Zealand determined it was more cost-effective to sell government holdings.

The Government Services Administration in the U.S. decided not to sell existing federal buildings but to lease any future office space required.

I'd like to make a few important points about this initiative.

Historic landmark buildings like the Parliament Buildings, the Supreme Court and the Citadel in Quebec are not part of this study. And nothing will be done to undermine the federal visibility in communities and regions of Canada.

We want to consult widely and have the informed input of many stakeholders on as many alternatives as possible.

We are doing this in the interests of hard-working taxpayers.

We want to create long-term investment value while providing the most cost-effective way of housing public servants over the medium to longer term.

This is also about better service — better accommodation for our public servants, and better service to Canadians.

And again, it's all part of the government's "green" agenda. Public Works is already a leader in green building design and we want to build on our government's sustainable environment agenda.

Public Works is a significant property manager.

If we can find a way to do what we do better, then we have a responsibility to do so.

This rethinking of the future of our office building portfolio is part of the ambitious agenda of this government.

We're bringing in a new culture of respect for ethics and accountability.

A culture of respecting our promises to Canadians.

A culture of respecting hard earned taxpayers money.

A culture of respecting the environment.

The Paul Martin government is working hard to change the culture of government into a culture of respect for Canadians.

They deserve nothing less.

Thank you, merci.