Real property activities: Standing Committee on Government Operations and Estimates—March 4, 2022
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Federal building management during COVID-19
- Public Services and Procurement Canada (PSPC) is committed to providing healthy and productive work environments in line with the latest public health guidance and global best practices in property management
- Although occupancy levels are currently reduced, our buildings remain operational and all mandatory maintenance and life safety system testing continue on our regular schedule ensuring that essential government functions can be delivered in a safe environment
- COVID-19 protocols remain in place for all leased and crown-owned assets, including:
- augmented cleaning of high touch points
- flushing of building water systems in low occupancy spaces for continued water potability
- heating, ventilation and air conditioning measures to increase outdoor air and maximize filtration
- specialized disinfection protocols for all suspected or confirmed cases of COVID-19
Key data points
- PSPC’s real property portfolio is comprised of approximately 1500 leased and crown-owned assets
- Base building cleaning costs have increased throughout the pandemic by about 15%
In alignment with the federal public servants mandate, all supplier personnel (including subcontractor personnel and private sector landlord personnel) who access federal government workplaces and commercial tenants operating inside secure areas are required to be fully vaccinated against COVID-19. This requirement entered into effect on November 15, 2021.
In leased assets, the policy is applicable to federal workspaces only (almost 1100 assets). While there is no contractual recourse for mandatory vaccination in existing lease agreements, PSPC has successfully secured 88% positive attestations with the remaining 12% being followed up.
Publicly accessible space does not fall under the requirements of the vaccination policy.
Heating, ventilation and air conditioning
PSPC’s heating, ventilation and air conditioning (HVAC) systems are designed, installed, operated and maintained to meet or exceed the requirements set out in the Canada Labour Code and the Canada Occupational Health and Safety Regulations, as well as reflect the guidance on ventilation published by the Canadian Centre for Occupational Health and Safety and the Public Health Agency of Canada during the COVID-19 pandemic.
PSPC has implemented supplemental HVAC measures to promote occupant wellness in its buildings and facilities, related to ventilation and filtration.
Base building cleaning costs have increased throughout the pandemic due to augmented cleaning protocols, seeing an increase of about 15% in the crown-owned portfolio.
While reduced occupancies may suggest lower utility costs, the reality is that utility costs have remained stable when compared to pre-pandemic.
The department continues its engagement with central agencies, clients, industry and bargaining agents to collaborate on guidance to advance procedures for the easing of restrictions and planning a safe return to the workplace.
Greening Public Services and Procurement Canada’s portfolio
- The government is taking action to reduce greenhouse gas emissions from its buildings
- In 2020 to 2021, Public Services and Procurement Canada reported a 57.6% reduction in greenhouse gas emissions from its own buildings compared to the 2005 to 2006 baseline
- These reductions came from improvements in buildings’ energy efficiency, electricity grid improvements and the procurement of renewable energy credits
Key data points
- A decrease of 19% of the remaining emissions is expected by 2025 through the national clean electricity initiative
- A decrease of 40% of the remaining emissions is expected by 2025 through the Energy Services Acquisition Program
- Target is over 82% greenhouse gas emissions reductions by 2025 and net-zero carbon by 2030 for the Crown-owned portfolio
National clean electricity initiative
PSPC has been working with the Treasury Board Secretariat Centre for greening government to develop a strategy to procure 100% clean electricity where available, as was identified in the 2019 Minister of Public Services and Procurement mandate letter. PSPC will purchase electricity from new renewable infrastructure, in provinces where it is available, and will procure renewable energy certificates to displace greenhouse gas emitting electricity in locations where new infrastructure development is not presently available.
In 2018 to 2019, the Government of Canada consumed approximately 2,692,500 megawatt-hour (MWh) of electricity. Approximately 80% of the electricity procured for use in the Crown-owned building portfolio (excluding housing) comes from clean sources. The remaining 20% (532,000 MWh) will be addressed through the national clean electricity initiative.
Energy Services Acquisition Program
The Energy Services Acquisition Program is modernizing the National Capital Region District Energy System, which provides heating services to 80 buildings and cooling services to 67 buildings (1.6M m2 of floor space), accommodating 55,000 occupants. Implementation of smart plants and smart buildings measures, along with the modernisation of the district energy infrastructure, will result in a 63% (67,000 tonnes) reduction in greenhouse gas emissions by 2025, compared to the 2005 to 2006 baseline of 106 kt CO2e per year for this asset.
PSPC is ensuring that all new buildings and major building retrofits prioritize low-carbon and climate resilience with investment decisions based on total cost of ownership. Environmental impacts beyond carbon, such as waste, water and biodiversity are also considered.
Procurement of electric vehicles
As the government’s common service purchaser for vehicles, the department has established procurement tools for light duty vehicles that includes zero emission and hybrid light-duty vehicles
In addition, the department is working to make other electric vehicles available, such as buses and medium and heavy commercial electric trucks
PSPC continues to support departments and agencies with their conversion of fleets with procurement instruments to facilitate adoption of hybrid and zero emission vehicles
Key data points
- 1,255 green vehicles procured in the last 3 years
- 262 charging stations installed at 73 Crown-owned and leased locations
- Increase of 50% in light-duty green vehicles available in procurement instruments for regular fleet; increase of 30% in the executive vehicle fleet
Public Services and Procurement Canada is the service provider for purchasing electric vehicles as well as electric vehicle charging stations. These vehicles are made available to all federal departments as fleet vehicles and as executive vehicles for cabinet ministers, ministers of State, secretaries of State and eligible deputy heads. The government also encourages employees to use low-carbon forms of transportation to reduce emissions from employee commute.
Charges related to the charging stations are funded by the users, with the exception of executive vehicles.
Two suppliers have been awarded procurement instruments for electric shuttle buses. Public Services and Procurement Canada also recently posted tender documents to procure electric commuter buses. The department is also engaging companies and suppliers as it seeks to move forward with the procurement of electric medium and heavy trucks.
Lac-Mégantic rail bypass, reconstruction
- The Government of Canada is proceeding with an open, transparent and equitable process to acquire the properties needed to build the rail bypass
- Public Services and Procurement Canada is collaborating and communicating regularly with Transport Canada in order to move quickly on this file while ensuring a fair acquisition process for property owners
- The Government of Canada is pursuing negotiations aimed at reaching agreements that are satisfactory to all parties
Key data point
- 100 parcels of land are to be acquired
Transport Canada (TC) has mandated PSPC to acquire the properties and to manage the technical contracts related to the acquisition process. Therefore, PSPC is responsible for surveying and appraising the properties, meeting with the owners to explain the acquisition process, negotiating with them by mutual agreement when possible and, ultimately, implementing the expropriation process in the event of an impasse during the mutual negotiation process.
The property appraisal process began in the fall of 2019. On August 26, 2020, AECOM, the consultant appointed to design a route for the bypass, submitted its final design development report. The right-of-way submitted was technically reviewed by Central Maine and Quebec Railway (CMQ) and TC. PSPC received the final version of the route on May 28, 2021, with subsequent changes being received until December 14, 2021.
On May 25, 2021, federal parliamentarians unanimously passed a motion calling for work to be completed in 2023 in accordance with the schedule. On May 27, 2021, TC, as part of an agreement with CMQ, committed to taking possession of the properties in the winter of 2022.
Two virtual information sessions, organized by TC and attended by PSPC, were held in summer 2021 to inform the property owners that an expropriation process has become unavoidable.
On October 22, 2021, the negotiation process began after offer letters were sent to the owners.
On December 22, 2021, a meeting took place to discuss the status of the project and acquisition process. PSPC, TC, the mayors of Lac-Mégantic, Frontenac and Nantes, the Honourable Marie-Claude Bibeau, as well as other federal members of Parliament (MPs) and representatives of the ministère des Transports du Québec were in attendance. On January 13, 2022, a second meeting took place between PSPC, the municipalities' mayors, TC, and the MP for Mégantic—L'Érable to discuss the project's technical elements.
On January 27, 2022, TC representatives organized 2 public, virtual information sessions as part of the public consultations held by the Canadian Transportation Agency. Members of the public also had the opportunity to submit written comments to TC, during a longer consultation period taking place from January 21 until February 4, 2022.
On February 4, 2022 TC received a letter co-signed by the mayors of the 3 municipalities affected by the project, in which 7 requests are made directly to the Government of Canada. Among them is the request to extend the negotiation period with owners by an additional 3 months.
As of February 8, 2022, only 1 offer remains to be submitted, which should be completed by mid-February.
National Capital Region bridges
- My department is working closely with the National Capital Commission, the cities of Ottawa and Gatineau, and other partners, to ensure federal bridges in the National Capital Region are safely and effectively serving Canadians
- Planning activities, including the impact assessment, are underway for the construction of a new bridge to replace the Alexandra Bridge, which is expected to take up to 10 years and scheduled to begin in 2028. In the meantime, inspections and repair work continue to ensure the bridge remains safe and accessible until it is replaced
- The National Capital Commission (NCC) has approved a Long-Term Integrated Interprovincial Crossing Plan developed in close collaboration with all its partners to support decision-making on any future crossings. The study provides a number of important considerations that the dedicated Sixth Interprovincial Crossing Office should consider
Key data points
- There are 5 interprovincial crossings in the National Capital Region (NCR):
- Public Services and Procurement Canada manages and operates the Alexandra Bridge (built in 1901), Chaudière Crossing (with the Union Bridge built in 1919 being the oldest of the 8 structures) and the Macdonald-Cartier Bridge (built in 1965)
- The NCC manages and operates the Champlain Bridge (built in 1928) and the Portage Bridge (built in 1973)
Budget 2019 provided funding [Redacted] for the replacement of the Alexandra Bridge, the rehabilitation and ongoing maintenance of the Macdonald-Cartier Bridge, and the Chaudière Crossing. It also provided direction to refresh technical studies on a potential sixth interprovincial crossing in the NCR and to develop a Long-term Integrated Interprovincial Crossings Plan.
Budget 2019 directed the NCC to “Address the demonstrated need for an additional National Capital Region crossing by refreshing existing studies and developing a long-term integrated interprovincial crossing plan with both provincial governments and the cities of Gatineau and Ottawa.”
The NCC, in collaboration with PSPC, refreshed existing studies on a potential sixth crossing, including cost estimates and the evaluation of the corridors established in 2013. The refreshed studies were completed and approved by the NCC’s Board of Directors in June 2020. In addition, the Long-term Integrated Interprovincial Crossings Plan was completed and approved by the board in January 2021.
Budget 2021 mandated PSPC to establish a dedicated project office responsible for addressing the need for an additional NCR crossing, jointly with the National Capital Commission. PSPC is proceeding with project planning, initial geotechnical information, and development of a business case.
While the Alexandra Bridge is designated as a national historic civil engineering site by the Canadian Society for Civil Engineering, the bridge is over 120 years old and is nearing the end of its lifecycle. A 2018 third-party life-cycle cost assessment determined that replacing the bridge would be less disruptive to the public, as well as more economical, than attempting to maintain the existing bridge. The planning and impact assessment activities for this replacement project are underway. The project team will continue to publish studies proactively as the project progresses.
With regard to the Alexandra Bridge replacement, current activities include public and stakeholder consultations and engagement with Indigenous partners which will feed the impact assessment
Chaudière Crossing works
Construction is underway and includes the widening of the Hull Causeway and a major rehabilitation for the 100 year old Union Bridge. The work started in July 2021 and will continue until summer 2023. A positive outcome of this work will be the addition of dedicated cyclist lanes on these 2 bridges thereby creating dedicated cycling lanes on the entire length of the Chaudière Crossing.
Leases and contracts related to the St-Bernard-de-Lacolle Border Crossing
- On behalf of the Canada Border Services Agency (CBSA), Public Services and Procurement Canada negotiated leases for temporary space to receive refugee claimants and process their claims in Saint-Bernard-de-Lacolle, Quebec
- Given the location of the property and its proximity to the border, this was an ideal location for this purpose
- Generally, PSPC is not able to unilaterally disclose certain details of lease agreements given that some information may be commercially confidential; however, I can confirm that the government paid fair market value for the leases
Key data points
- March 2017: PSPC leased office space in a building owned by Importations Guay Ltée
- This agreement has been renewed until March 31, 2022
- In 2020, 2 new lease agreements were put in place with Importations Guay Ltée, both running from April 1, 2022, to March 31, 2027
On October 12, 2021, following a news release, CBSA received a media request regarding the value of the lease between the Government of Canada and Importations Guay Ltée for the offices located in Saint-Bernard-de-Lacolle. This request was denied on the basis of confidentiality and contractual clauses.
On December 7, 2021, PSPC received a media request from La Presse requesting the value of the lease. PSPC did not disclose the value of the lease due to reasons of commercial confidentiality. On December 7, 2021, PSPC also received an access to information request concerning the lease between the Government of Canada and Importations Guay Ltée in Saint-Bernard-de-Lacolle and all related information, citing a 2004 federal appeal court decision arguing the department must make the value of the lease public.
2021 payments in lieu of taxes in Ontario
- Legislative amendments made by the Province of Ontario intended to apply higher tax rates to federal property compared to other property in the province constitute differing treatment and is not permitted under the Payments in Lieu of Taxes Act
- Measures have been put in place by Public Services and Procurement Canada to ensure that interim payments are made to municipalities while discussions between the department and Province of Ontario officials are underway to resolve the issue
Key data points
- Between fiscal years 2016 to 17 and 2020 to 2021, payments in lieu of faxes in Ontario have totaled $986 Million
- During that same timeframe, all provinces and territories (including Ontario) have received $2.85 Billion in payments in lieu of taxes
The legislative amendment issued by the Province of Ontario lists specific education tax rates for payments in lieu of taxes (PILT)-eligible properties that are higher than the rates identified for similar taxable business property.
This change in legislation has created an inequity between taxable business properties and federal properties. This is contrary to the purpose of the Payments in Lieu of Taxes Act, which is for the fair and equitable administration of PILT. Prior to the latest amendment, the education tax rates applied to both taxable properties and PILT-eligible federal properties were the same.
This amendment was announced through the 2020 Provincial Budget and there was no consultation with the federal government prior to setting these rates, and the impact of the change on municipalities does not appear to have been well understood.
The Province of Ontario does not have the constitutional authority to impose any taxation on the Government of Canada with respect to federal real property. The constitutional authority for PILT rests with the Parliament of Canada.
The PILT Program has experienced several past situations where provinces have tried to exclude federal properties from tax rebates or mitigation measures. The program has always remained consistent, and ensured that PILT-eligible federal properties are treated equitably and in the same manner as similar taxable properties.
Meetings with officials from both Public Services and Procurement Canada and Ontario to discuss the issue and the way forward have been held over the past few months with both parties reiterating their positions.
Discussions between the department and Province of Ontario officials are underway to resolve the issue.
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