Hon. Elmer M. MacKay (Minister of Public Works):

Mr. Speaker, my colleague opposite, who has had some responsibility for housing in the past, knows full well that this government has continued to meet every responsibility for social housing.

Over the next five years we will be spending over $10 billion on social housing. Right now there are 652,000 units being helped under this program. We have looked after people who are handicapped, those most in need. He knows that under the budgetary constraints we have to seek new ways to be innovative to fund social housing

which we are doing. We are now able to borrow directly and pass the subsidy on. We are saving a considerable amount of money that way.

The member can be sure that we will continue to play a very constructive role in social housing and to continue to meet our responsibilities.

Hon. Elmer M. MacKay (Minister of Public Works):

There are in fact two lease agreements between the National Capital Commission and Chambers Ottawa (1992) Inc. relating to the Chambers site. The first is a 66 year ground lease between the National Capital Commission as landlord, and its tenant Chambers Ottawa Inc., a corporation controlled by Pemik Enterprises Inc. and Le Groupe L.G.L. Ltee. The commission awarded the lease in 1987 on the basis of a two-stage proposal call process: a publicly advertised prequalification call, followed by a proposal call.

The tenant subsequently assigned its leasehold interest under the ground lease to Chambers Ottawa (1990) Inc., a corporation controlled by another of the original tenderers, Perez Bramalea Limited. The new tenant made a further assignment of its leasehold interest to Chambers Ottawa (1992) Inc., a corporation controlled by Perez Corporation and The Standard Life Assurance Company. These subsequent assignment were done in accordance with the terms of the ground lease. As indicated in NCC chairman's letters to the hon. member for Carleton-Gloucester dated November 2, 1992 and December 2, 1992, Chambers Ottawa (1992) Inc. approached the National Capital Commission in November 1991 with a proposal to provide head office accommodation to the commission at the Chambers site. While the commission was considering issuing a proposal call for its head office accommodation in the national capital region, it agreed to review the proposal submitted by Chambers Ottawa (1992) Inc.

The commission's consideration of the proposal was compatible with its mandate, given its responsibility for safeguarding federally designated heritage buildings. The commission was concerned about the possible ramifications to the project from the stagnation of the commercial leasing market, both in terms of the risk of

delays and hence damage to the structures in question and the potential delay in receiving participation ground rent under the terms of the ground lease.

The Chambers site was found to be a desirable and justifiable head office location. However it became impossible to proceed by way of a public tender for the site's development due to the existing ground lease. After reviewing the proposal submitted and performing the necessary due diligence, the commission proceeded to enter into negotiations for a building lease with Chambers Ottawa (1992) Inc. on a sole source basis. The decision to proceed in this manner was taken only after a comparative analysis showed that the terms of the lease being proposed were competitive, given the heritage nature of the project and the terms of the ground lease in effect. This decision was endorsed by Treasury Board and received the approval of the Governor General in Council on July 23, 1992.

Hon. Elmer M. MacKay (Minister of Public Works):

Mr. Speaker, I am pleased and delighted to entertain this question from my colleague in view of the importance that this organization has had to the city of Montreal which is the capital of avionics in Canada. This organization has been here for 40 years or more and is very important to the city of Montreal.

I thought he would be congratulating Public Works for the scrupulous way it has maintained the negotiations and the tender calls which were completely open and transparent. I would invite him as I think my office already has for a briefing.

This process began last June and has been carried on to the point where we are now looking at and analysing the bids that were submitted on April 19.

This organization, as he must know, has required more space for some time to meet its obligations. It asked for

36,000 square metres more. Treasury Board reduced that. Nevertheless if this single use facility is not modified and adapted to meet the use of ICAO, we could even risk losing this international agency.

I am surprised. He should speak to his colleague, the hon. member for Saint-Leonard, who will tell him that about 800 jobs are involved. I cannot understand why the hon. member would be misled by this prurient article by

April 29, 1993

a journalist named Cameron who, unlike the member, I think was a bit of a quidnunc.

Hon. Elmer M. MacKay (Minister of Public Works):

Mr. Speaker, there are so many fallacies in that question, I am surprised that a member of the calibre of my friend opposite would even ask it.

These negotiations have been going on for about two years. They have not yet been completed. They are completely transparent. I repeat that this is a single use building. He talks about a lawsuit. What is new about a disaffected developer suing the Government of Canada? This happens all the time.

I tell my colleague opposite that this particular transaction is squeaky clean. The more he looks into it the more I will welcome his questions.

Hon. Elmer MacKay (Minister of Public Works):

Public Works Canada (PWC) manages a number of properties located in city core areas. Those buildings, as they grow older, often require important renovations in order to respect increasingly stringent health and safety standards. Such renovations do not show up in the numbers related to city core revitalization projects.

Public Works Canada manages a major capital project program under parliamentary vote 15-real property program capital expenditures.

This vote involves the construction of new federal buildings and the renovation or redevelopment of existing federal buildings. Some of these projects are located in city core areas. The Pacific-Western regions of PWC had three such projects and there were two in the Quebec region, as follows:

Victoria-Custom House (816 Government

Street)-Renovations

This project, at a total cost of $4.4 million, involved the conversion of a portion of the lower two floors from government office space to commercial retail and the installation of a new heritage exterior facade on the 1957 addition. The project was undertaken on the urging of the city of Victoria and the downtown business community to contribute to the revitalization of Government Street and the inner harbour/Empress Hotel/provincial legislative precinct. The project was substantially complete in the spring of 1992 with capital expenditures of $2.5 million in 1991-92 fiscal year.

Whitehorse-"Elijah Smith" Federal Building (308 Main Street)-Redevelopment

This $24.7 million project involved the phased demolition of the old federal building and the construction of a new Government of Canada office building. The Elijah Smith building is a four-storey, 9,500 rentable square metre office building occupying an entire city block on

April 28, 1993

The Budget

Main Street. The project was substantially complete in the spring of 1992 with capital expenditures of $10.8 million in 1991-92 fiscal year.

Winnipeg-MacDonald Building (344 Edmonton Street)-Renovations

This project, at a cost of approximately $6 million, involved a major upgrading of all floors of the building to give it an economic life of 25 years. The project was completed in 1992 with capital expenditures of $2 million in 1991-92 fiscal year.

Chicoutimi-Old Port of Chicoutimi

1991- $186,850-fitting up of cycling track, surveys and other legal conveyancing documents, soil decontamination, river bank management

1992- $97,959-fitting up of cycling track, surveys and other legal conveyancing documents, soil decontamination, river bank management

Trois-Rivieres-Old Port of Trois-Rivieres

1991- $369,265-reimbursement to the city for operating and maintenance costs for the previous calendar year

1992- $424,576-reimbursement to the city for operating and maintenance costs for the previous calendar year

The following two projects were carried out under parliamentary vote 20-crown corporations program:

Montreal-Old Port of Montreal

1990/91-$14,363,000-operating and capital expenses

1991/92-$42,232,612-operating and capital expenses

1992/93-$13,457,000-operating and capital expenses (Apr.-Dec.)

Toronto-Harbourfront

1990/91-$3,648,932-operating and capital expenses

1990/91-$3,700,000-loans to cover capital asset expenses

1991/92-$11,000,000

1992/93-$8,200,000 (Apr.-Dec.)

Toronto Harbourfront was the only project done in conjunction with a city/region.