Real property activities: Standing Committee on Government Operations and Estimates—November 24, 2022

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Evolution of the office portfolio

Context

Public Services and Procurement Canada (PSPC) is the federal government’s administrator of real property and is responsible for approximately 6 million square metres of rentable office space across Canada. Studies undertaken prior to the COVID-19 pandemic showed that existing office space was underutilized by at least 40%, and considered inefficient with annual operating and maintenance costs of approximately $2.4 billion.

By enabling a hybrid model of work, PSPC has an opportunity to optimize and modernize the portfolio, transform the public service, stimulate regional economies, increase inclusivity and accessibility, support reconciliation, and contribute significantly to the greening efforts of the Government of Canada.

Suggested response

If pressed on specific actions:

Background

Public Services and Procurement Canada’s ultimate goal is to have a modern office portfolio with optimal usage that delivers on the Government of Canada’s net-zero carbon and other greening targets and meets or exceeds current accessibility standards. PSPC’s Office Long-Term Plan takes into account the dramatic change in working patterns resulting from the ongoing COVID-19 pandemic and strives to achieve a right-sized portfolio that could generate annual savings for the government. This is especially notable given that infrastructure is the second-largest expense after salary expenses.

As part of its mandate, PSPC is providing government-wide leadership for the fit-up and modernization of general-purpose office space, including the state and pace of workplace modernization and quality of the workplace environment. To this end, PSPC is working to provide workplace environments that are modern, efficient, productive, green, sustainable and that are digitally connected to support a mobile workforce.

The Long-Term Plan highlights the fact that PSPC has developed a number of new tools and pilot projects designed to assist in the investment decision-making with respect to which assets (both owned and leased) should be recapitalized, modernized or disposed of. GCcoworking is one such pilot, designed to explore the potential benefits of providing multi-user, shared workspaces where departmental business needs permit.

It should be emphasized that the Long-Term Plan was drafted during COVID-19, which is still considered an active pandemic. Subsequent iterations of the plan will be adjusted as clarity continues to emerge regarding the future of work and the federal workplace ecosystem, and according to how key assumptions, including investment timelines, contained in the plan evolve. The plan will, as a result, be monitored and updated regularly.

Additionally, the plan aligns with the latest Treasury Board’s Horizontal Fixed Asset Review report’s recommendations to ensure the optimal use of office space. The plan is based on key principles including prudent real property investment management, sustainability, responsiveness and other government-wide priorities.

Building disposal

PSPC frequently reviews how efficiently it uses public funds and the effectiveness of its programs and services. This includes how we manage office space for more than 260,000 federal public servants from 103 departments and agencies.

As a result of this assessment process, PSPC is developing a long-term real estate portfolio plan to optimize the office space under our responsibility, lower operating costs and reduce greenhouse gas emissions.

PSPC has identified several ways to optimize its office space, including office buildings for immediate and potential disposal. Traditionally, buildings identified for disposal are circulated individually to prospective interest groups. As a first step toward improving our disposal process, PSPC is circulating a comprehensive list of buildings in the National Capital Region (NCR) that have been slated for disposal or that are being considered for disposal.

The disposal process includes engaging Indigenous peoples and various stakeholders such as City of Ottawa, Ville de Gatineau, provinces of Ontario and Quebec, private sector stakeholders, elected officials, bargaining agents and other client departments and employees.

As client departments and agencies finalize their long-term accommodation plans, additional opportunities for disposal could be identified, including in regions outside the NCR.

Greening Public Services and Procurement Canada’s portfolio

Key messages

Key data points

Background

National clean electricity initiative

PSPC has been working with the Treasury Board of Canada Secretariat (TBS), 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’s mandate letter. PSPC will purchase electricity from new renewable infrastructure, in provinces where it is available, and will procure renewable energy certificates (REC) to displace greenhouse gas emitting electricity in locations where new infrastructure development is not presently available.

In 2021 to 2022, the Government of Canada (GC) consumed approximately 2,544,000 megawatt-hour (MWh) of electricity. Approximately 81% of the electricity procured for use in the Crown-owned building portfolio (excluding housing) comes from clean sources. The remaining 19% (493,000 MWh) will be addressed through the national clean electricity initiative.

The national clean electricity initiative includes provincial initiatives such as PSPC’s Atlantic clean energy initiative and the Alberta and Saskatchewan clean electricity initiatives to purchase clean electricity locally in these provinces. It also includes the purchase of renewable energy certificates to displace electricity generated from high carbon sources for participating federal departments.

Atlantic clean electricity

PSPC’s Atlantic Clean Electricity (ACE) team is leading a whole-of-government effort in the Atlantic Region towards acquiring 100% clean electricity for federal Crown facilities. The team is focusing its efforts in Nova Scotia and New Brunswick, provinces which currently have significant fossil-fuel based electricity production. An “Agreement for Implementation to Purchase Net-New Renewable Electricity” was signed and announced between the Government of Canada (PSPC) and the Province of Nova Scotia in August 2019, leading to the introduction of a clean electricity procurement program for large electricity customers in Nova Scotia, including the GC. A competitive request for proposals process for this program is expected to be released in 2023.

Discussions continue between PSPC, the Province of New Brunswick and provincial electricity utilities to identify a clean electricity program for federal facilities.

Newfoundland and Labrador (N.L.) generates approximately 95% of its electricity from hydro-electric sources and its grid is considered fairly clean. While most of Prince Edward Island’s (P.E.I.’s) on-island electricity is generated from wind farms, the majority is imported from New Brunswick, which generates electricity from a mix of emitting and non-emitting sources. Next steps regarding clean electricity for federal facilities in P.E.I. will be influenced by the approach in New Brunswick. If in-province, renewable energy solutions are not deemed feasible in these provinces, PSPC will leverage the national REC initiative to support the clean electricity commitment for federal facilities.

Energy Services Acquisition Program

The Energy Services Acquisition Program (ESAP) is modernizing the National Capital Region district energy system (DES) which provides heating services to 80 buildings and cooling services to 67 buildings in the NCR.

Implementation of smart plants and smart buildings measures, the modernisation of the NCR DES infrastructure, along with the electrification of the heating plants, will result in a 92% reduction in greenhouse gas emissions by 2025, compared to the 2005 to 2006 baseline. The residual GHG emissions of 8% (9,000 tonnes) will be addressed through a number of additional technologies. Altogether, these measures will allow the NCR DES to achieve net-zero carbon status by 2030.

Office Long Term Plan

PSPC’s 2022 Office Long Term Plan is an aspirational plan that contains notional targets designed to right size, recapitalize and modernize the GC’s office portfolio over a 10 year planning horizon.

PSPC is a major contributor to the GC’s greening efforts and continues to embed sustainability considerations into day-to-day operations of its office portfolio, as well as investment decisions in accordance with the Greening Government Strategy. GHG emission reductions can be achieved through fit-ups that result in space optimization, base building investments, major rehabilitations, new construction, connection of buildings to ESAP, and the establishment of green clauses in lease agreements.

Renewed mobility of federal public servants continues to be assessed to examine how the pandemic and adjusted realities could further green government operations, noting that remote working also contributes to GHG reductions through positive changes in commuting behavior. Finally, advancing the use of GCcoworking sites, offering workplaces closer to where public servants live, can provide opportunities to further reduce GHG emissions resulting from commuting.

With respect to specific portfolio greening objectives identified in the Office Long Term Plan, the following initiatives have been identified to continue to help achieve the GC carbon elimination priorities within our office portfolio:

Building on the success of the roadmap to low carbon government operations in the NCR, PSPC is working on developing net-zero carbon neutral implementation strategies for each asset in its national portfolio. The information collected in the National Net-Zero Portfolio Plan will be used to generate short, medium and long term GHG reduction implementation plans for each individual building. This work is expected to position the department to meet the net-zero GHG reduction target before the 2050 target date. Key findings from this initiative will factor prominently into subsequent iterations of the Office Long Term Plan.

Plastics Action Plan

Efforts to reduce the use of plastics from operations and divert plastic waste from landfill are guided through the implementation of a Plastics Action Plan which includes the delivery of sustainability awareness programs and engagement strategies for new hybrid workplace environments, new recycling infrastructure and services for hard to recycle plastics, and the reduction of plastics through green procurement initiatives

The 236 waste audits completed indicate that plastic waste makes up a small percent of the total waste produced per occupant per year. The waste audits also indicate that a majority of plastic waste is brought into the building by occupants from outside sources such as coffee shops and food vendors

Major projects

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. New buildings will be net-zero carbon while all major building retrofits require a GHG reduction life-cycle cost analysis to determine optimal GHG savings. To make sure these major projects are resilient, climate change risk assessments that incorporate both current and future climate conditions are considered in design development and construction.

National Capital Region bridges

Context

Budget 2019 provided funding for the replacement of the Alexandra Bridge, and the rehabilitation and ongoing maintenance of the Macdonald-Cartier Bridge and Chaudière Crossing. It also provided direction for refreshing technical studies on a potential sixth interprovincial crossing in the National Capital Region and developing a Long-Term Integrated Interprovincial Crossings Plan.

Suggested response

If pressed on an additional National Capital Region crossing:

If pressed on replacing the Alexandra Bridge:

If pressed on interprovincial tramway connections:

Background

There are 5 vehicular interprovincial crossings in the National Capital Region. 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 that together constitute the crossing) 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).

Transportation studies conducted over the last 10 years have consistently shown that the 5 existing vehicular crossings and connecting roadways are at full capacity during morning and evening peak travel times (average daily traffic on all crossings: 187,000 vehicles daily; 9,000 using active transportation such as cycling or walking). That being said, the implementation of, and updates to, the Long-Term Integrated Interprovincial Crossings Plan will take into consideration the impacts of COVID-19 on peak hour capacity requirements due to potential changes in work related travel patterns. As of August, 2022 the bridges are at 81% of their pre-pandemic volumes, with the Alexandra Bridge being at pre-pandemic volume and the Portage Bridge exceeding pre-pandemic volume by 12%.

Long-Term Integrated Interprovincial Crossings Plan

Developed in consultation with regional, municipal, provincial and federal agencies, stakeholders and the public, the vision for the plan sets a sustainable path to achieve common goals and objectives under 5 strategic pillars:

The plan includes key directions, strategies and initiatives to help the region achieve these goals and objectives, and to monitor progress toward short-, medium-, and long-term targets.

The National Capital Commission will continue to collaborate with agencies to implement the plan, which involves the following activities:

Current travel and goods movement data are essential to avoiding uncertainties and for improving planning for the future of sustainable transportation in the National Capital Region. The NCC and its partners are working collaboratively to implement the plan:

An additional National Capital Region crossing

Budget 2019 directed the National Capital Commission 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.”

Budget 2021 further directed to “Establish a dedicated Project Office responsible for addressing the need for an additional NCR crossing at Public Services and Procurement Canada, jointly with the National Capital Commission.”

With regard to the first commitment, in 2020 the NCC completed a refresh of existing technical studies on 3 potential corridors:

The scope of the refresh included the following 8 technical studies:

The purpose of the refresh was not to recommend a specific corridor. Any next steps on a potential additional National Capital Region crossing project will depend on further planning activities and would leverage the results of the Long-Term Integrated Interprovincial Crossings Plan, completed and approved by the National Capital Commission’s Board of Directors in winter 2022.

WSP Canada Group Limited was awarded the contract by the National Capital Commission to refresh the 2013 technical studies previously mentioned on a potential additional National Capital Region crossing. Again, the purpose of the refresh was not to recommend a specific corridor, but rather to inform any future government consideration of an additional National Capital Region crossing project.

Separately, PSPC engaged WSP Canada Group Limited to assist with conceptual designs, cost estimates, and a refreshed assessment and evaluation of 3 potential corridors, for internal use to inform departmental work. These reports relied on the findings of the NCC’s refreshed studies.

Further studies on travel patterns, such as an origin-destination survey, are being completed between September and December, 2022. A commercial vehicle movements study will also follow at a later date. This new data will be used to help inform the government on its options for an additional NCR crossing.

Role of the Project Office: PSPC created the dedicated Project Office following Budget 2021. The Project Office is responsible for work concerning an additional NCR crossing. In addition to the data refresh, the Project Office coordinates information gathering and data collection to support the preparation of a business case.

Alexandra Bridge (Public Services and Procurement Canada)

The Government of Canada is committed to maintaining the integrity of its infrastructure, while ensuring the safety of its assets and conserving its heritage.

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. The decision to replace this beloved bridge was not taken lightly. A 2017 third-party life-cycle cost assessment looked at options for investing in the Alexandra Bridge over the long term. The study determined that replacing the bridge would be less disruptive to the public, as well as more economical, than attempting to maintain the existing bridge.

A structural evaluation of the bridge (completed in March 2020) revealed that due to the deterioration of several bridge members, load restrictions were required. Its replacement became more critical after inspectors found an unexpected structural flaw, which forced the bridge’s closure for several weeks in 2020, for emergency repairs. Other repair projects are planned and will be completed to ensure the bridge remains safe and accessible until its replacement.

The preliminary cost estimates of the various potential replacement options were also released, although they are not final and have increased over time as forecast by PSPC internal experts. An additional study was also conducted assess the feasibility of maintaining the bridge. The study was not intended to reassess the government’s decision to replace the bridge. The intention was to confirm our expert opinion that maintaining the structure another 75 years would be extremely complex and high risk and that the impacts in terms of heritage, costs and environmental may be similar or greater than a replacement project. The conclusion of the study is that the replacement of the bridge remains the most prudent option when all technical, financial and environmental criteria are considered. PSPC and the NCC will work together to consult and coordinate with our partners including the City of Gatineau, the City of Ottawa, Indigenous communities as well as other stakeholders and jurisdictions to develop a comprehensive plan to reduce impacts to the public and businesses while the bridge is replaced.

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.

Chaudière Crossing works (Public Services and Procurement Canada)

Planned projects include the widening of the Hull Causeway and a major rehabilitation for the 100 year old Union Bridge. The work started in September, 2021 and will continue into Summer 2023. A positive outcome of this work will be the addition of dedicated cyclist lanes on the entire length of the Chaudière Crossing.

From early spring 2022 to Summer 2023, traffic has been limited during the construction period to public transit and active transportation towards Ottawa. All non-commercial vehicles, and local delivery vehicles, less than 33 tons, are authorized on the Chaudière Crossing going north towards Gatineau. All other commercial vehicles are required to use the Macdonald-Cartier Bridge.

Macdonald-Cartier Bridge

The Macdonald-Cartier Bridge is the eastern most interprovincial bridge and is the key crossing for truck traffic. The bridge was built between 1964 and 1966 and spans the Ottawa River connecting King Edward Avenue in Ottawa, Ontario to Highway 5 in Gatineau, Quebec. The structure is for commuters and commercial vehicles with an average annual daily traffic volume of 41% of interprovincial vehicular traffic and approximately 13% of all pedestrian and cyclist and other active modes of transportation volume. As of August, 2022 the bridge was at 98% of its pre-pandemic traffic volumes.

There are currently no active construction projects on the bridge structure.

Champlain Bridge works (National Capital Commission)

The Champlain Bridge is the westernmost of the interprovincial bridges. It connects the Sir John A. Macdonald Parkway in Ottawa and Chemin d’Aylmer in Gatineau. Built between 1924 and 1928, prior to the pandemic, the bridge carried approximately 22% of all motor vehicle traffic and 7% of all pedestrians and cyclists across the Ottawa River in the National Capital Region. As of August, 2022 the bridge was at 81% of its pre-pandemic traffic volumes.

The NCC is repairing and repaving the Champlain Bridge. The bridge has not undergone major reconstruction since it was widened to a 3-lane crossing in 2002. Currently, various components of the bridge require rehabilitation as part of life cycle repair and maintenance. The NCC will also enhance the existing cycle track to a higher level of safety.

The first phase of the repair work started in August, 2022, on the east lane of the bridge and was completed in October, 2022. To minimize impact and disruption to active users and vehicular traffic, the work is being completed in phases and 2 lanes of traffic will be maintained throughout the work. Additional phases of work will be progressed over the summers of 2023 and 2024. Cyclists and pedestrians will continue to have access to the bridge. Motorists can expect delays as the open lanes will be narrower, and the maximum speed limit will be reduced to 40 km/h. Road signage will be in place.

Portage Bridge works (National Capital Commission)

Built in 1973 and expanded in 1988, the Portage Bridge is a major commuter route over the Ottawa River for interprovincial travel between Ottawa and Gatineau. On average, prior to the pandemic, the bridge carried approximately 40,000 vehicles a day. The bridge’s cycling lanes are used by over 300,000 cyclists per year, with the number of cyclists increasing by 4% each year. As of August, 2022 the bridge surpasses its pre-pandemic vehicular volume by 12%.

Over a period of 2 years, 2018 and 2019, the NCC rehabilitated the asphalt surface and enhanced the cycle track of the Portage Bridge. This work aimed at improving safety and user comfort. It will also extend the bridge service life until the need for major reconstruction in 10 to 25 years.

As part of regular life-cycle management activities, the NCC carried out inspection work on the bridge from August 21 to 27, 2022 that required overnight lane closures. To minimize the impact of this work on bridge users, 2 traffic lanes remained open in each direction throughout this period. The bridge remained accessible to cyclists and pedestrians as usual.

Leases and contracts related to the St-Bernard-de-Lacolle border crossing

Context

Since 2017, Public Services and Procurement Canada has supported the Royal Canadian Mounted Police (RCMP), the Canada Border Services Agency (CBSA), and Immigration, Refugees and Citizenship Canada (IRCC) to put in place contracts and leases to manage an increase in asylum seekers at the St-Bernard-de-Lacolle border crossing.

Whereas the contracting values are publicly disclosed, the sole source leases values have historically not been subject to the same disclosure requirements.

Nine lease agreements have been concluded with companies owned by Pierre Guay (for example, for office space, land, and for use of the hotel adjacent to the border crossing). Various requests (media and access to information) were made concerning these lease agreements. Mr. Guay is characterized in a La Presse article as a supporter of the Liberal Party of Canada.

In September 2022, Radio-Canada published a number of stories on the Roxham Road crossing, criticizing the government for not releasing the lease costs associated with the processing of asylum claims.

Suggested response

Background

Since the spring of 2017, a very high volume of asylum seekers arrived at the Roxham Road crossing. This volume of irregular migration has created the need for RCMP, CBSA, and IRCC to increase their infrastructure to process claims and provide services to asylum seekers. The COVID-19 pandemic added increased pressures on infrastructure and service delivery, given the need to respect sanitary measures in processing claims and providing services.

From 2017 to October 1, 2022, PSPC has put in place 30 contracts at the request and on behalf of the RCMP, CBSA, and IRCC to help manage the increase in asylum seekers to Canada for a total of $108.56 million (taxes included). No contract has been awarded by PSPC to Mr. Guay’s companies.

In addition to these contracts, PSPC has signed 9 leases to meet the needs of its federal partners. Mr. Guay is the only private landowner in the geographic area of the Lacolle border crossing, which put PSPC into a direct negotiation process. Five of the leases are still active. The location for leases were determined by RCMP, CBSA and IRCC to meet their stringent operational requirements and are reflective of a steady stream of claimants. These leave agreements are used for a range of activities, from a triage centre, dorms, and office spaces to a land lease, parking, and for the hotel adjacent to the border crossing.

Although the value of each individual lease cannot be disclosed unilaterally given the commercially sensitive nature of the information, the total amount of these leases is $28.13 million and was disclosed on October 17, 2022. The terms of these leases can be made public. [Redacted]. But, he maintains his long time position not to disclose the sensitive business information included in the leases, an industry standard practice, and his expectation that the government will fully respect the non disclosure clauses that are part of some leases.

In December 2021, PSPC received a media request from La Presse requesting the value of the agreements between the Government of Canada and companies owned by Mr. Guay in Saint-Bernard-de-Lacolle. PSPC did not disclose the value of the lease agreements due to reasons of commercial sensitivity. PSPC also received an access to information request concerning the agreements and all related information, citing a 2004 federal appeal court decision arguing the department must make the values public. PSPC is processing this access to information request.

Clean electricity for federal buildings across Canada

Key messages

Key data point

Background

In the 2016 Pan-Canadian Framework on Clean Growth and Climate Change the government set the goal of using 100% clean power by 2025.

In the 2017 Greening Government Strategy, the Government of Canada set target commitments to reduce greenhouse gas emissions from federal government buildings and fleets. As identified in the strategy, departments will implement low-carbon real property operations which include using 100% clean electricity by 2022, where available, and by 2025, at the latest, by producing or purchasing renewable electricity.

In 2019, the mandate letter to the Minister of Public Services and Procurement set as a top priority to develop a strategy in partnership with provinces and energy suppliers to power federal buildings with 100% clean electricity, where available, by 2022. Additionally, the Minister was to commit to being a first purchaser to help support the growth of new clean electricity/renewable power sources as they become available. These commitments received continued emphasis in the 2020 Speech from the Throne.

PSPC is taking a leadership role on behalf of all custodial departments and agencies that report greenhouse gas emissions to TBS as part of the Federal Sustainable Development Strategy in order to maximize the environmental, socio-economic and cost effectiveness of this initiative.

In January 2021, PSPC issued 2 requests for proposals for the procurement of renewable energy certificates that were unsuccessful. One request for proposal was for 95% of the total required REC volume and was open to all businesses, while the second request for proposal was for the remaining 5% REC volume and was a set-aside under the Procurement Strategy for Indigenous Business.

In November 2021, following the unsuccessful procurements, PSPC posted an advanced notice to engage with the industry. Following the advanced notice, PSPC re-issued 2 adjusted requests for proposals to reflect industry concerns in January 2022. These re-issued requests for proposals were also unsuccessful.

Unsolicited interest from the Indigenous community justified a third Procurement Strategy for Indigenous Business. PSPC is currently completing the bid evaluation stage where 1 bid was received for 5% of the total renewable energy certificate volume requirement. If results of the evaluation are favorable, contract award is expected in November 2022.

Securing renewable energy certificates through competitive procurements has not attracted the expected private sector interest. It is an industry that is more accustomed to bilateral negotiations and request for proposal formats in line with industry recognised power purchase agreements, which cannot be used for government contracting. PSPC is presently looking at alternative procurement/agreement options to mitigate this situation.

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