May 31, 1943

NAT

Howard Charles Green

National Government

Mr. GREEN:

How- much of this capital

expenditure is to be spent overseas?

Topic:   NATIONAL DEFENCE
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LIB

James Layton Ralston (Minister of National Defence)

Liberal

Mr. RALSTON:

I can give it privately to the hon. member; I should prefer to do that.

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NAT
LIB
NAT

Howard Charles Green

National Government

Mr. GREEN:

The navy is also asking

for over S36.500.000 for capital expenditure for construction and the air force is asking for practically S93.500.000 for the same thing. It is a tremendous amount.

Topic:   NATIONAL DEFENCE
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LIB

James Layton Ralston (Minister of National Defence)

Liberal

Mr. RALSTON:

The hon. member referred tu the tremendous amount of lumber and material required-

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NAT
LIB

James Layton Ralston (Minister of National Defence)

Liberal

Mr. RALSTON:

-and labour. No one appreciates that more than we do in the services. There is an inter-service priority committee which meets and goes over the respective projects and endeavours to place them in some order of priority which will enable the most urgent to be done first, dealing with the Department of Munitions and Supply on that basis. There have been constant meetings between the deputy ministers and the controllers of lumber and of other materials to ensure that first things come first. We are under no illusion as to the scarcity of materials or the necessity for conserving them.

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PC

Alfred Henry Bence

Progressive Conservative

Mr. BENCE:

I am concerned about the

matter to which the hon. member for Vancouver South (Mr. Green) has referred. In the first place, the minister has stated that the particular department concerned deals with these various matters. For example, if a building is required for the purposes of the Department of National Defence, only that department concerns itself with acquiring that building. At least, so I understood him. I should like to know how the wffiole situation is canvassed in view of the existing possibilities of finding some substitute instead of building, in order to save the necessary materials that are being used. For instance, is there anyone in the department who will go through Ottawa and canvass the whole situation and determine whether or not a certain building on a particular street could be used, thus avoiding the necessity of erecting a new temporary building? Again, is the department prepared to put up with a certain amount of inconvenience instead of erecting a new building, in order that necessary materials may be saved, together with the labour that will be required?

I should like to know what the policy of the department generally is with respect to purchasing and renting. In some of the returns made to the house I find for example that in the city of Ottawa a' substantial amount of property has been purchased by the Department of National Defence. I am confining my remarks to the army; I am not here dealing with the navy or the air force. Here are some of the buildings acquired: Ottawa Ladies' College, purchased for $225.000; Woods and Canadian buildings, purchased for $680,000; Aylmer apartments, purchased for $321,000; Bate building and Truro apartments, $233,000. I should like to know what the policy of the department is with regard to such purchases. Did it determine first of all whether there was any

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possibility of renting these buildings? Did it consider whether it would be better to rent than to purchase, and did it consider the question whether such buildings could be used after the war? In other words, what has the departfnent in mind with respect to these buildings? In Saskatchewan, according to a return given to the house, no buildings have been purchased; whereas, in several of the other provinces buildings have been purchased, and in some a substantial number.

Topic:   NATIONAL DEFENCE
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LIB

James Layton Ralston (Minister of National Defence)

Liberal

Mr. RALSTON:

In what province have no buildings been purchased?

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PC

Alfred Henry Bence

Progressive Conservative

Mr. BENCE:

Saskatchewan. I have in mind the fact that in Regina a building known as the Westman chambers is being rented for $20,000 a year. The assessed value of the land and buildings is $80,390. What did the department have in mind in renting rather than purchasing that building? Then, what did it have in mind when it purchased various buildings in Ottawa, rather than trying to negotiate rental payments for their occupancy?

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LIB

James Layton Ralston (Minister of National Defence)

Liberal

Mr. RALSTON:

Generally speaking the plan is, if at all possible, to get the use of the building rather than to invest in it. I repeat that that is the general pirnciple. But that principle is cut into by reason of a number of considerations. One is that if we rent a building it generally has to be renovated or adapted for office use. In such circumstances we have to give an undertaking that at the end of the rental term it will be restored to its previous condition. The result is that we have found renting so costly that manifestly it would be uneconomical to rent rather than to buy. I am referring to a building, of course, which would have a post-war use. Time and again we have been tempted to use our power of expropriation of a limited interest, that is to say two, three or four years, instead of taking over entirely. And time and again our real estate advisers have reported that it would bo uneconomical and bad business for us to do so, having regard to the obligations we have to undertake, (a) to make capital expenditures on the building so that it may be suitable for our use, and (b) that at the end of the time we would remake or remodel the building, so as to put it back in the shape in which it was when we took it over. I can assure my hon. friend that the keeping down of capital expenditures has been one of the cardinal principles we have tried to adopt wherever practicable. The difficulty has been that no one can guess the length of the war.

The hon. member referred to the purchase of the Ottawa Ladies' College for the use of the Canadian Women's Army Corps. In that connection every consideration was gone into. I do not think the valuation of any building could have been gone into more thoroughly than was this one by our real estate officers. We were advised that the Ottawa Ladies' College refused to lease. They would sell, or nothing. This meant that we would have had to expropriate, on a limited interest, carrying it for three or four years, and then handing it back, with the liability for remodelling. As my hon. friend probably knows, it was considered desirable property as a permanent building. It was believed much good use could be made of it after the war, and the department considered the advice of our real estate advisers was sound. The result is that the purchase was made.

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PC

Alfred Henry Bence

Progressive Conservative

Mr. BENCE:

Is it the thought of the department that a building like that will be resold after the war?

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LIB

James Layton Ralston (Minister of National Defence)

Liberal

Mr. RALSTON:

All I can say on the point is that that just depends on the need for buildings.

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LIB

James Joseph McCann

Liberal

Mr. McCANN:

Who are the appraisers or valuators in Ottawa?

Mr., RALSTON: Our chief real estate

adviser is Colonel Goodwin Gibson of Toronto, who has been in the department from the beginning. He has with him a number of gentlemen, all of whom ha-ve been in the real estate business. Then, he has the benefit of the advice of real estate advisers in Ottawa. I cannot remember offhand the name of the appraiser who worked with Colonel Gibson in the appraisal of the Ottawa Ladies' College. However I can give those names later, and I can also give the names of those who appraised the Woods and Canadian buildings and the Aylmer apartments.

The Woods and Canadian buildings are one illustration of the folly of leasing permanent buildings. I do not know how long we have had the Woods building, but I know I was there in 1926 when on an earlier occasion I was Minister of 'National Defence. The Canadian building was there also at. that time. I am sure that in rentals paid we have paid completely for the Woods building, when we consider the time it has been occupied. It was decided we should purchase these buildings and put an end to these annual obligations. Then, we wanted to obtain the benefit of 12,000 square feet which could be obtained by joining the two buildings with a per-

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manent structure. That has been done, the new portion having just been completed. The whole has been made into one building.

If I remember correctly the Aylmer apartments were purchased at the time the Department of National Defence for Naval Services was formed. It is just opposite the Woods building. It was considered desirable to purchase the building for purposes of national defence-any one of the departments-as was the case with the Bate building. That was the income tax building; it stands directly alongside. This means that the crown owns all the property on both sides of Slater street from Elgin street to the park.

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LIB

Robert William Gladstone

Liberal

Mr. GLADSTONE:

Are those buildings

included in the Ottawa beautification scheme?

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LIB

James Layton Ralston (Minister of National Defence)

Liberal

Mr. RALSTON:

I do not know whether

my hon. friend is being sarcastic when he asks that question.

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LIB
LIB

James Layton Ralston (Minister of National Defence)

Liberal

Mr. RALSTON:

My hon. friend is asking

whether these buildings would be included in the scheme connected with the widening of the street?

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LIB

May 31, 1943