Proceedings of the Standing Senate Committee on
National Finance

Issue 7 - Evidence


Ottawa, Wednesday, May 8, 1996

The Standing Senate Committee on National Finance, to which was referred Bill C-7, to establish the Department of Public Works and Government Services and to amend and repeal certain Acts, met this day, at 5:15 p.m., to give consideration to the bill.

Senator David Tkachuk (Chairman) in the Chair.

[English]

The Chairman: Honourable senators, this is the third meeting of the committee to examine Bill C-7, an act to establish the Department of Public Works and Government Services and to amend and repeal certain acts.

We have three groups of witnesses tonight; representatives from the Royal Architectural Institute of Canada, the Canadian Council of Technicians and Technologists and the Geomatics Industry Association of Canada.

I will ask you all to sit at the table. We will hear your presentations one after the other, allowing 10 minutes for each, and then we will ask questions. As it seems that the issues on this bill are quite defined, that will allow more opportunity for discussion.

Senator Nolin: Mr. Chairman, before we start with the witnesses, last week when we heard from the Association of Consulting Engineers of Canada, I asked Mr. Pierre Franche to table various documents used in his presentation. For reasons that I do not recall, the documents were not tabled and I should like to table them now.

First, there are more than 125 letters from members of the association opposing the bill. Mr. Franche referred to a huge number of letters that they received from their membership.

There are also two documents from Public Works Canada, both of which were referred to by Mr. Franche in his testimony. The first deals with a letter from Public Works in which they are clearly establishing that they are conducting environmental works for two municipalities in Canada.

There is a copy of a page in an advertising brochure in Rio de Janeiro from the Edmonton office of Public Works offering their services.

I should like those documents tabled as part of the testimony of Mr. Franche of last week.

The Chairman: Is it agreed that we place these on the file of the committee?

Hon. Senators: Agreed.

Mr. Tony Griffiths, President, Ontario Association of Architects, Royal Architectural Institute of Canada: Honourable senators, I am a Canadian architect in Ontario appearing before you as a representative of the Royal Architectural Institute of Canada. I am accompanied today by Mr. Tim Kehoe, executive director of the Royal Architectural Institute of Canada, and Mr. Brian Watkinson, architect, who is the executive director of the Ontario Association of Architects. We very much appreciate the opportunity to present our comments and concerns with respect to Bill C-7, aspects of which we believe will have a significant and negative impact on Canadian architects, their employees, and consultants and partners in allied professions.

At the present time, there are approximately 7,700 licensed architects in Canada. The majority of these are principals of architectural practices, small businesses which, in turn, employ many thousands of professionals, para-professionals, interns and support staff. As an industry, we regularly engage other professionals as consultants, and our designs create jobs in the construction industry. The services, products and equipment we select and specify define a vast market for manufacturers and suppliers.

Through most of Canada, the architectural profession continues its attempt to rebound from the paralysing effects of the recession, perhaps better termed a depression. It has devastated the construction industry in general. To remain competitive, architects have striven to enhance their expertise, strengths and skills in response to the shrinking market at home. This has had the additional benefit of enabling many Canadian architects to position themselves effectively and competitively in the emerging global economy. Canada's private sector architects are clearly not afraid of competition. However, we do have serious reservations with this bill, particularly in clauses 10 and 17.

Bill C-7 creates the opportunity for the federal government to enter into direct competition with the private sector in both domestic and international markets, and it leaves open the possibility of Public Works and Government Services Canada providing services, particularly architectural and engineering, to clients outside the federal jurisdiction both domestically and abroad. I should like to address these one at a time.

Bill C-7 can be interpreted to permit Public Works and Government Services Canada to compete inequitably with professionals in private practice. Clauses 10 and 16 of Bill C-7 clearly present the opportunity for PWGSC to compete directly with the private sector in both domestic and international markets.

When this bill was in the House of Commons as Bill C-52, our profession made submissions to then Minister David Dingwall in cooperation with the Association of Consulting Engineers of Canada, the Canadian Environment Industries Association, the Canadian Council of Professional Engineers, the Canadian Exporters Association, the Canadian Council of Technicians and Technologists, the Canadian Academy of Engineering, and with the support of the Canadian Chamber of Commerce, the Canadian Federation of Independent Business, and le Conseil du patronat du Québec. Since the December 1994 submission to the minister, the Canadian Construction Association and the Geomatics Industry Association of Canada have added their support.

In response to our submissions, we received assurances from the minister that it is not the intention of the federal government that PWGSC compete with the private sector. Yet, amendments to clause 16(b) of the bill, introduced after second reading, do not, as far as we can see, adequately prevent PWGSC from competing against the private sector.

First, the government has clearly articulated a policy of streamlining and downsizing. The expansion of the government's role into direct competition with the private sector is directly contrary to that policy.

Second, the less than precise allocation of real costs, both direct and indirect, could allow Public Works and Government Services Canada an unfair advantage. The costs, including overheads which we face in the private sector, are truly the costs of doing business and cannot be ignored, discounted or absorbed elsewhere.

Third, any direct, indirect, intentional or inadvertent subsidization of PWGSC's activity in competing with the private sector would result in an increase of the public debt, first, in the direct costs of the subsidization, and second, in the loss of tax revenue. Again, this is clearly contrary to the government's policy of deficit reduction.

Fourth, the risk involved in providing professional services is two-fold: the usual type of risks encountered in the operation of any business, and the very significant exposure which arises when providing professional services to the public.

We architects are small business people, and we accept and attempt to manage the risks that we face as such. If we manage poorly, we are out of business. What is the comparable business risk for a government ministry when competing with us? The public purse is always available as a last resort.

Our professionals are personally responsible for the services we provide to clients. If it is demonstrated that we have not met, through error or omission, an accepted standard, our personal financial well-being and that or our families is at stake, and seriously at stake. What is the comparable risk for Public Works and Government Services Canada?

Fifth, the bill has been defended on the basis that it would allow the private sector to "tap" the resources and expertise of Public Works and Government Services Canada and to "partner" in some fashion, allowing us to become even more competitive. While there may be merit in that suggestion, it raises additional issues. First, practically, if more than one Canadian architect is competing for a particular commission, would PWGSC partner with all? If not all, how would the decision be reached as to which Canadian proponent would benefit? Second, there arises the question of risk sharing between the partners. There is strong concern that the private sector partner will in the end be the one who shoulders most if not all of the risk. Even were PWGSC to agree to share equitably in the risk, there is again the issue of impact on the public purse.

Sixth, there is one other perhaps very significant issue which may not yet have been fully explored. Bill C-7 can be read to permit PWGSC to provide architectural services to Canadian clients other than those within the umbrella of the federal government. This could include, for example, municipalities, school boards and private sector clients.

Architecture is a self-regulating profession in Canada, and that regulation has devolved to the provinces. In each province, an association or institute has been established by act of the provincial legislature to regulate the practice of architecture within the province. Individuals or entities may not practice architecture in that province without complying with requirements set out in the statute and regulations passed thereunder. The potential that PWGSC could offer services to the public appears to offend those statutes.

Broadly speaking, while the subject-matter of Bill C-7 seems to fall clearly within the legislative authority of the federal government, the effect of clauses 10(2)(c) and 16(b) would appear to deal with matters that fall within the legislative power of the provinces.

If there is substance in this legal analysis, there is further support for the solutions we propose below. This is an issue which clearly should be fully explored and addressed before this bill proceeds.

We would offer the following solutions, with humility, for your consideration:

First, secondment. We do not believe it is necessary for PWGSC to be given the right to provide professional services to clients beyond the federal government in order to provide the opportunity for Canadian architects to tap the expertise that exists at Public Works. A much simpler mechanism would be to facilitate secondment of individuals or teams within the PWGSC to private sector practices on request and with appropriate contractual arrangements.

Second, amend Bill C-7. The following amendments to proposed clauses 10 and 16 will address all of the issues we have identified above, either added or removed.

Clause 10(2) states:

(2) The Minister may incur expenditures or perform, or have performed, services or work in relation to --

paragraphs (a), (b) and (c).

Clause 10(2)(c) states:

(c) any real or immovable property, any work or any other property not belonging to Her Majesty in right of Canada, with the consent of its owner.

We would suggest that the following be added: "in completion of any public work"; in other words, if the work is in connection with public buildings.

Our second area of concern relates to clause 16, which states:

The Minister may do anything for or on behalf of

(a) any department, board or agency of the Government of Canada or Crown corporation, or

(b) ...any government, body or person in Canada or elsewhere that requests the Minister to do such thing,

And here we state that the minister is authorized to do this or any other act of Parliament for or on behalf of any department, board or agency of the Government of Canada. We suggest that the phrase "or elsewhere" be deleted.

Our proposed clause 16.(2) would read that "nothing in section 16(1)(b) shall be deemed to confer on the Minister the power to provide architectural and engineering services."

To further clarify the matter in which the department and the profession will work together, we propose that a memorandum of understanding be executed between the government and the Royal Architectural Institute of Canada similar to the one that we understand is contemplated between the government and the engineering profession. The memorandum of understanding would set out the principles of our continuing working relationship.

In closing, we stress that Canadian architects are not afraid of equitable competition. We recognize this as a central component of today's business environment. We are fully prepared to meet the competition head on, and we believe that it has been amply demonstrated that Canadian architects will succeed in this environment.

Mr. C. Charles Brimley, Executive Director, Canadian Council of Technicians and Technologists: Honourable senators, the Canadian Council of Technicians and Technologists appreciates the opportunity to be heard on this issue of importance to all Canadians. Our presence here also stems from a sense of duty to our affiliated members across the country, a duty to more than 37,000 engineering and applied science technicians and technologists represented by our association, as well as to our more than 160,000 Canadian professional and consulting engineering colleagues, as well as to a large number of architects, land surveyors and others with whom we work on a day-to-day basis performing architectural and engineering services both in the Canadian marketplace and around the world.

While Bill C-7 is a good and timely piece of legislation, the Canadian Council of Technicians and Technologists and a consortium, which you have heard -- that is, national associations representing the architectural and engineering professions -- are concerned with aspects of Bill C-7. These aspects place Public Works and Government Services Canada in direct competition with the private sector.

We are particularly troubled by clauses 10 and 16 of the bill, which, in our view, attempt to expand the power and the influence of Public Works and Government Services Canada from its traditional levels. We interpret these articles as totally contrary to the Prime Minister's directive for government to opt out of doing the business of the private sector, as well as contrary to PWGSC's stated mandate of managing Crown properties and assets. We contend that competition by Public Works and Government Services Canada with the private sector is unfair and amounts to taxpayer-subsidized competition.

The contention that there exists the possibility of Public Works and Government Services Canada becoming a private sector partner is flawed, in our opinion, since it implies that the government can partner on an equal basis with the private sector.

In addition, further erosion by public sector intrusions into private sector markets will undoubtedly reduce the already slim opportunities for small- and medium-size enterprises to develop the expertise necessary to compete both in Canada and internationally. In fact, this action threatens the government's plans with respect to job creation.

In our opinion, in its current form, Bill C-7 puts the livelihoods and careers of a significant number of our members at risk. To highlight how significant the risk is, it has been estimated by the consulting engineers of Ontario that, in the province of Ontario alone, more than 40 per cent of the consulting engineering work force are technicians and technologists. That is 40 per cent of an estimated population work force of 17,000 in Ontario and, on a national basis, some 50,000 individuals.

We, as a member of a consortium, made representations when Bill C-52 -- the predecessor to Bill C-7 -- was drafted. Today, we reiterate our position that Bill C-7 must be amended before it becomes law.

In our brief, we propose amendments which would bring Bill C-7 into line with the Prime Minister's directive and would prevent the unfair intrusion by Public Works and Government Services Canada in the affairs of the private sector.

The proposed changes to Bill C-7 will, in our opinion, provide Canadian practitioners and firms offering architectural and engineering services both in Canada and abroad with a sense of government support for their entrepreneurial efforts in a very competitive global economy. At the same time, these changes will reduce government expenditures -- read "tax dollars" -- which could be used for other productive purposes.

The Canadian Council of Technicians and Technologists supports the government's efforts for deficit reduction and job creation. However, we feel that these objectives cannot be achieved by having competition between the federal government and the private sector.

In conclusion, we are counting on your wisdom to include the modifications proposed in our brief before sanctioning this legislation.

Mr. Ed A. Kennedy, President, Geomatics Industry Association of Canada: Honourable senators, I wish to add my word of thanks to your committee for the opportunity to be heard on this issue, which we consider to be very important.

I should like to start with a description of geomatics because the term is not exactly a household word. In fact, many of you in the room have probably never heard of geomatics before. I will try to explain it in terms that may mean something to you.

I represent firms across Canada which are in the business of creating geographic information products. Those include maps, surveys, information and reports of all kinds for the resource development sector, the utility sector, governments at all three levels, transportation firms, environmental monitoring agencies and individual landowners.

Membership in our association encompasses approximately 80 per cent of the active exporters in this sector. Those firms are creating new jobs for Canadians by steadily increasing export business at a current rate of more than 10 per cent per year.

We were invited by the Association of Consulting Engineers of Canada to join this group of like-minded organizations last February to oppose certain provisions of Bill C-52, now Bill C-7. We accepted this invitation because of our disagreement in principle with the objectionable clauses in the bill and also because approximately 30 per cent of our members also provide consulting engineering services.

You heard the concerns expressed by my predecessors this afternoon. We object to certain clauses of Bill C-7, in particular clauses 10 and 16 which we believe create opportunities for expansion of the role of government in the domestic and international markets. We feel that the government has not closed the avenue for the provision of these services by Public Works and Government Services Canada to governments, institutions or other clients outside federal jurisdictions, both domestically and abroad.

As I am sure members of the committee know, an amendment to clause 16(b) was introduced after this bill received second reading. However, we believe that the revised wording does not prevent PWGSC officials from encouraging potential domestic and foreign clients to request their services, in which case they would be fully compliant with the sections of those clauses as they are now written.

Why do we object to government competition? We believe, as do the other members of our group, that the shortcomings of this bill are at variance with both the government's publicly stated intentions to downsize and streamline the public service and with the worldwide trend toward privatization of government activities.

In our view, our strategic services, which are geomatics, architecture and engineering, are at the front end of what are usually large, capital-intensive projects. The consulting work we do in these areas acts as a multiplier effect for the creation of many additional jobs in other sectors of the economy, as well as in the sale of other products and services. However, in order to compete in the global marketplace, our member firms need a strong domestic market and a level playing field.

We are witnessing, with growing concern, instances of government intrusion into the marketplace through the creation of special operating agencies and other such mechanisms. In the case of the geomatics sector, we dealt with an organization in the Department of Natural Resources with which we had a close working relationship for many years. Two years ago it was scheduled to become a special operating agency. There were some instances of direct competition with the private sector. We sat down with that organization and negotiated with them provisions that would clearly keep them out of competition with the private sector. In that case, there were no legislative mandates to compete with the private sector as we see for the architects and engineers at PWGSC.

We believe that the drive for the generation of non-tax revenues, which underlies this trend of increasing competition from the public sector, is counter-productive to the government's efforts to create private sector employment through its programs and policies for the growth of small- and medium-sized business and its policy to encourage more exporters.

An uneven playing field results when subsidized government organizations compete in the marketplace with private sector firms. Not only does that weaken the domestic position of our firms, it can set artificially low prices in the international marketplace, which makes it even more difficult for our firms to compete internationally.

In terms of a proposed solution, I will not repeat what has been said already. Essentially, we recommend the same as has been recommended by the other members of this group. We recommend the addition of the following words to the end of clause 10(2)(c), "in completion of any public work"; the removal of the words "or elsewhere" from clause 16(1)(b); and the addition of a new clause 16(2), which would read: "Nothing in Section 16(1)(b) shall be deemed to confer on the Minister the power to provide architectural and engineering services."

In conclusion, the Geomatics Industry Association of Canada and our allies fully support the government's goals of deficit reduction, job creation, streamlining of government and encouragement of innovation. We believe that these goals can best be achieved by limiting the role of the public sector to governance and transferring production activities to the private sector.

The success of our members in competing globally is built on the foundation of a strong, viable base of domestic business. For the geomatics sector in particular, where approximately 70 per cent of the business in the international market is public sector business, the first question those private sector clients ask of our companies is: What have you done for your government in Canada? The Government of Canada is absolutely essential in terms of providing opportunities to demonstrate our expertise in Canada, first, in order that we can be qualified to do business internationally.

We believe that the provisions of Bill C-7 to which we object open the door for increased government competition with the private sector. We know that we must compete globally to survive. The domestic market in our sector, as in some of the other sectors represented here, is relatively flat. However, we also believe that allowing subsidized government agencies to compete with industry will be detrimental to our efforts to compete internationally for the reasons we have outlined.

We understand that the government views this bill as a housekeeping matter to give effect to the former departments of Supply and Services and Public Works Canada, and it seems that our concerns have been considered a bit of an annoyance. We believe that the clauses to which we object, although perhaps seemingly innocuous, contain the seeds which will develop into a serious and far-reaching problem for our industries -- that is, unfair competition from the public sector.

As my predecessors have done, we respectfully request your support of the suggested amendments to Bill C-7 which we are putting forward.

The Chairman: I wish to ask all three of our witnesses how many members they represent. I include in that people who actually earn a living through those members.

Mr. Kennedy: Our association represents approximately 120 companies. Total employment is about 8,000 people.

Mr. Brimley: Our organization represents individuals rather than firms. Currently, we represent 37,000 certified members.

Mr. Griffiths: There are approximately 7,800 architects across Canada. There are some 9,000 in Chicago alone. It is difficult to say how many allied people are employed in the offices which also employ a great number of technologists. We create work in the building industry. The ripple effect, therefore, is quite large.

The Chairman: Have you made attempts to deal with the minister or the department on this matter? If you have, what has been the reaction?

Mr. Griffiths: No, I do not believe we have made any attempts with respect to Bill C-7. However, some overtures were made. I do not think my predecessor was able to get to see the minister. I do know that letters were exchanged.

Mr. Brimley: I would say that our efforts have been spearheaded through the Association of Consulting Engineers of Canada, which was the group that led the consortium organization, the members of which were all of a like mind concerning this bill.

Mr. Kennedy: The same is true in my situation, although in the circumstance to which I referred with the Department of Natural Resources, we did meet with the minister and got a good hearing. However, we have not met with the Minister of Public Works and Government Services.

Senator Lavoie-Roux: On the last page of the brief from the Geomatics Industry Association of Canada, you say that the government views this bill as a housekeeping matter to give effect to the amalgamation of the former Department of Supply and Services and Public Works Canada.

Speculating that this is a legitimate goal for the government, do you think it could be done without the constraints it might put on these three associations?

Mr. Kennedy: From my perspective, we have no objection to the bill other than these two small clauses, to which we have strong objection. From our point of view, the rest of the bill is completely legitimate. We believe that the government could achieve its aims with the changes we are recommending.

Senator Lavoie-Roux: I have had to deal with the Department of Public Works and I know their ambitions, which they may feel are legitimate.

Mr. Chairman, was this bill prepared by the Department of Public Works?

The Chairman: I would assume so, although I do not know for certain. It was prepared by someone in the government.

Senator Lavoie-Roux: When I see "Public Works", I get a little more suspicious. As I said, their ambition is limited to themselves. Is that your belief?

Mr. Kennedy: We believe that there is some ambition -- at least at the official level, although not necessarily at the political level -- to have them play a much stronger role in the private sector. We do believe that they have an ambition to compete with the private sector for architectural engineering services.

Senator Lavoie-Roux: What is the government's purpose in doing that? We are in an age when everyone talks about privatization and removing regulations which constrain private enterprise. According to your interpretation, this will place more constraints and create greater difficulties for the private sector. Perhaps we should reflect on what the government's purpose is in doing that.

Mr. Griffiths: Mr. Chairman, there is no question that we are apprehensive for those reasons. However, our perception is slightly different than that. I get the impression that Public Works and Government Services wish to assist the private sector, particularly in offshore work. The process is very difficult. They have levels of expertise, resources and contacts which are often not available to the smaller members of professions. The big guys in the professions can do it all themselves.

We are sympathetic to that idea. We want things to be fair, and we do not want inadvertently to get rolled on by an elephant.

The Chairman: Did Public Works not do that before this bill? I thought they helped the private sector in international work before they had these powers.

Mr. Griffiths: In an indirect way, yes.

The Chairman: How did they do that?

Mr. Griffiths: Perhaps the deputy could answer that better than I.

The Chairman: He will be addressing us later, so I will ask him that.

Senator Taylor: As a former consulting engineer, I can appreciate the analogy about the elephant. Is there not a place for the government in bidding on foreign contracts? Many countries believe that an engineering firm which is allied with a government is much more effective than one which is not, particularly smaller ones.

I can see that large architectural and engineering firms would favour your position, but I am wondering whether small engineering and architectural firms would not mind sleeping with an elephant, at least for a few nights, until they get acquainted with the customer. Consulting engineering is the second oldest profession.

Mr. Griffiths: My profession may be in favour of that, providing the selection process is absolutely equitable.

Senator Taylor: You want to be able to send the government home after a few days.

Mr. Griffiths: Not quite that, but why would Public Works enter into a partnership with me rather than any other firm of architects? We all pay taxes. That is a problem; there is no question about that.

Senator Taylor: Is it possible that Public Works might have some expertise in some fields of engineering that private companies do not have? Ice breaking may be an example.

Mr. Griffiths: That may be so in engineering. The National Capital Commission may have particular expertise in the organization of capital cities. If someone wanted to build a new capital city, the NCC may be able to offer levels of expertise which would be appealing to an emerging country.

If we were competing head to head, it would be very difficult for a private organization to stand up to that competition. Therefore, it would be terrific for my company to go with them. However, we need a mechanism to ensure that everyone has an equal opportunity to compete.

Mr. Kennedy: From our perspective, there is a legitimate role for government officials to play in support of the private sector in acquiring business for Canada. In our case, we work very closely with partners in several government departments. People are seconded from the government to work with private firms. We have put together a consortia in which the government has been a player. There is a legitimate role for government officials to play. They have expertise in some areas which does not exist in the private sector, in regulatory environments and so on.

We are not convinced that it is necessary to put a legislative provision into an act in order to do that. We believe that there are currently mechanisms for secondment of people. In fact, in our experience, they work very well. The people we work with in government do not have a legislated mandate to do what we see being proposed here.

It is not a question of whether government can work with industry and support it absolutely; it is just that we believe that the provisions we are objecting to go beyond what is necessary to do that.

Mr. Brimley: One of the things which is not in question is the ability of the current engineering and architectural organizations in this country to deliver on a world-wide basis. Currently they rank fourth in the world in exports of architectural engineering services. They are doing a very good job and do not need another player who can compete unfairly by having other subsidized costs in the marketplace, as the government tends to be able to do. What they need is a government that improves the current environment in which they function so that they can compete better with the rest of the world. There is no question that, given more and more work, there will be more and more delivery by current firms without any extra players in the business.

Senator Nolin: Mr. Griffiths, do you own a firm?

Mr. Griffiths: Yes.

Senator Nolin: Is it large, small or medium?

Mr. Griffiths: There are 20 people in the firm.

Senator Nolin: Keeping it in business is probably the ultimate task.

Do you have knowledge of your firm or other firms in the association competing against Public Works?

Mr. Griffiths: No, I do not have that evidence. Public Works dealt very decently with us. The process has been fair and above board. The spec system and the current systems have worked well for us. We have not had too many jobs from Public Works, but we have had a number from the Department of National Defence. That is competition within the industry for work that is available. Speaking for my company, we are not aware of Public Works soliciting architectural work in that way.

Senator Nolin: You are aware of that?

Mr. Griffiths: No. My understanding of Public Works is that it offers services to its user clients. We have many advantages in that system. For example, the client's brief is put together more intelligently because of experience. The type of contracts that we are asked to enter into are somewhat uniform, which is to our advantage. There is a knowledgeable client base through Public Works.

Senator Nolin: You raise in your brief the issue of Public Works not being a registered architect. That is a strong argument.

We were told last week by the engineering association that some engineers in Public Works are not engineers. Do you have the same problem?

Mr. Griffiths: Yes, we do. In fact, I am trying to find ways in which we can allow people who have been trained as architects and who are working in Public Works and cannot get the experience in the private sector because they are in Public Works to use the title "architect." I think that would strengthen our profession. In a way, they are lost colleagues. Actually, that is a bit dramatic.

Senator Nolin: I am sure you are aware that the Paris opera house was designed by a Canadian architect.

Mr. Griffiths: Carlos Ott, of course.

Senator Nolin: My colleague Senator de Bané mentioned that Canada is opening the way and calling private firms to join in building and designing. With respect to the Paris opera house project, are you aware that Mr. Ott received help from Public Works?

Mr. Griffiths: I do not know that. As I understand it, the Paris opera house was an open, international competition. We sent away for the conditions. They cost something in the neighbourhood of $200. You sit down, blow your brains out on this, and you send it in. It is an open competition.

Senator Nolin: Have you been asked by Ottawa, the Department of Public Works, to enter into that project? Have they offered their help?

Mr. Griffiths: No. I do not see that as being their role. International competitions are high-flying competitions. Architects enter them. They win them on merit of design. They are selected, but it is all anonymous.

Carlos Ott is a brilliant architect. He was selected. He won the competition and designed the building. However, I am not aware if, in the subsequent stages of designing the building, he had the support of the Canadian government through Public Works. I would not expect it, but it could have happened.

I think the government could help architects compete internationally by giving them financial support.

There is a recent case in which a Canadian firm with a major experience in airports was short-listed as one of five for a major airport in the Philippines. It dropped out of the competition because the British architects and the French architects were heavily subsidized by their governments. They put more into it and got more staff on the ground.

Senator Nolin: Do we not have access to that in Canada?

Mr. Griffiths: Not that I am aware of.

Senator Stratton: Not to the same degree.

Mr. Griffiths: You can go out and beat the bushes. If I said that there was a chance to do a new parliament building in Kuala Lumpur, I would be on my own. I would be competing on my own against other companies who might have big government subsidies to support them. I think that is correct.

Senator Stratton: What we heard last week has been reiterated to a degree today. We heard that there does not seem to be a level of trust between the private sector professionals and the folks at Public Works Canada simply because of the fact that this would open the door to allow them to compete directly. Why is that the case? Why does there not appear to be that trust factor? Is it because there has been a history -- not so much in international markets, but in domestic markets -- where work is done in-house for other departments, work that could or should legitimately go to the private sector, but they choose to do it in-house? Is that the reason, or am I trying merely to put words in your mouth?

Mr. Griffiths: There is a bit of that. There is always a bit of nail biting. If Public Works decided to do the air museum, for example, it would be a nice commission and everyone would like it. However, we should understand as a profession that you must have a core of good people in government for legitimate reasons and you must give them interesting work from time to time.

I think we are also a little apprehensive because once this becomes law, ministers change, governments change, ideas change and we are still out there. Therefore, we are apprehensive. It is not that we do not trust individuals.

Senator Stratton: Would anyone else wish to respond?

Mr. Brimley: The current environment in the architectural engineering services marketplace is very tight. It is a tight market. There is a lot less money out there to compete for and a lot less work because of the downturn. Here we have a giant with the ability -- whether or not it is exercised -- to creatively account for various overheads and accounting procedures which may allow it to compete unfairly. However, if there were a firm trust that the competition was fair and on a level playing field, I do not think any architectural or engineering firm out there could not compete. The problem is the nagging lack of trust in the fairness of the competition.

Mr. Griffiths: It would be quite difficult for my company to compete with the federal government for a piece of work because it brings with it a certain credibility, along with the Canadian flag and expertise and all those strong concepts. It would be quite pleasant to partner with the Canadian government -- I will say it again -- as long as everyone got a fair crack. That is a difficult one.

The Chairman: If this were used in further discussions, how would the federal government decide upon your company over 10 other firms competing for the same contract? Would they partner with all of them?

Mr. Griffiths: Apart from the fact that we are the best, there is no easy way to do it.

Senator Stratton: As a followup to that question, you stated quite clearly, and Senator De Bané has been supportive of this position, that the profession which practices within Public Works should have the opportunity to work on significant projects, such as the example you stated of the air museum. In these lean and mean times and given the downsizing we are experiencing currently, my concern is not only the air-museum-type projects. With one- and two-man firms now multiplying in architecture and interior design, et cetera, a project worth $300,000 or $500,000 would be significant.

Mr. Griffiths: There is no question about that.

Senator Stratton: Having given tacit approval to Public Works to choose their projects carefully because they need to keep their knife-edge of expertise keen and sharp, as expertise is concerned, it disturbs me that we may be giving them licence to do exactly what you do not want them to do. Do you agree with what I am saying or, again, am I putting words in your mouth?

Mr. Griffiths: Well, you are a bit, which of course is very unsanitary. My rough, tough bottom line would be to say that it should all be in the public sector. I do understand the corporate memory and the ability to keep good people. You cannot keep feeding good staff on garbage.

The Chairman: Why would you need an architect in the public service anyway? Why would any architect need to be in the Department of Public Works?

Mr. Griffiths: Architects bring a wide range of skills to problem solving.

The Chairman: Such as what? Why would an architect need to be in the government's Department of Public Works?

Mr. Griffiths: It is my opinion that the Department of Public Works deals with built form. It deals with complex questions, with matters of aesthetics, with the fabric of the nation and with the materials which make the country what it is. Architecture is a very critical part of the culture of the country. That culture can be bought outside on the open market. However, within Public Works, there should also be a sympathetic balance. It should not all be bean-counters and people with wrenches saying that they will do this or that. They must energize the government and make it aware of things which are culturally important.

The Chairman: I took a trip to Poland. I do not know if you have ever been to Poland or to another Communist country where all architects work for the government. That had to be the most awful place to visit post-1945 as far as architecture is concerned.

Senator Taylor: You should try Edmonton.

The Chairman: I like Edmonton. Maybe there are too many architects working for the government there as well.

What I am saying is that if I follow your argument to its logical conclusion, there should be beautiful buildings in Poland, which were built after 1945, but there are not. The only nice buildings are those that have been replaced based on the pre-1945 architecture. Other than that, there is nothing to see in Warsaw at all. The newer concrete buildings are quite ugly.

If 10 architects are good for the government, then would 100 be better? Would 1,000 be better? Perhaps we have too many now. Perhaps we would benefit by more creativity in the marketplace if none of them worked for the government.

I am asking that theoretical question. Why is Warsaw not a prettier place?

Mr. Griffiths: That is a big question. It has nothing to do with the ability of the Polish architects.

The Chairman: I know that.

Mr. Griffiths: If you went into Berlin and across the wall when the wall existed, you would be going from a free economy with some sparkle and a lot of junk into a grey land with no energy. If you go to Beijing, you will find the remnants of Chinese culture left among serried rows of concrete blocks, all done, I presume, by architects under a regime.

I hope you are not implying that working in the government is similar to that.

The Chairman: I am not implying anything. To me, working for the government is working for the government.

Mr. Griffiths: Sure, but there is a role for creativity within the government. There is a need for creativity within the loci of Public Works. It is a very important element. There are not enough architects in Public Works.

With respect to Pierre Franche, I think there are too many engineers in Public Works. I am not kidding. Architects have not risen to high positions in Public Works over the last number of years. Some architects cannot get registered. Some architects are registered and pay their own fees to belong to associations; they are not required to do that, so they tend to drop out. This is a few hundred dollars per year. They are gradually subsumed into the system. I believe the government could be further enriched by employing more architects. The work they do there is another matter.

Senator De Bané: Gentlemen, you have heard both ministers, Mr. Dingwall and Madam Marleau, say that they do not intend to compete with the private sector.

You have been reminded that we are talking of a clause which is not new. This is essentially section 13 of the former act governing the Department of Supply and Services.

You have noticed that, despite the fact that the Government of Canada is the most important client that buys both goods and services in Canada, the only professions which have expressed concerns are essentially engineering and architecture. No other category of professional firm has expressed the same concerns.

You have stated the crux of the problem -- it is your attitude of distrust, mistrust and lack of trust. Frankly, I do not buy that attitude to explain why we must devise new policies. We are not breaking new ground here.

This is the exact replica of a clause which already exists. There are hundreds of other categories of professionals in this country, none of which have seen what you see in this clause. Despite the assurances of both ministers that it is not the intention of the government and will never be the intention of the government to compete with the private sector, you say that this is not enough and that there is a lack of trust. However, when you are asked about your professional relationship with the department, you say that they are very professional and very ethical.

I do not want to rehash the entire issue, but we have on record what the ministers have said. The department is willing to sit with you and reach a memorandum of understanding. All I ask is that you have more faith in our system.

One characteristic of our system is that the government has to be sensitive to the opinion of the people. You know very well that no one here would like to see the government competing with energetic firms such as yours which each day must earn their keep, take risks and compete in the world.

If we were breaking new ground and if all the other professions were here supporting you, I would say that perhaps there is something wrong. However, the government provides services in every imaginable category and only two of them, engineering and architecture, see things in this clause which no one else sees.

One of the best ways to judge something is to look to the past. That clause has existed for a long time and we have not seen abuse. The Government of Canada, through that department, hires professional people every day. This is done on a competitive basis for the CIDA and other departments. Professionals from all categories compete, and the department has established a grid to evaluate that competition. No one disputes the fairness of the system. As a member of Parliament, I never received a complaint from someone saying that a competition was fixed.

Please, let us have some trust. It is to be hoped that after the bill is passed your professional associations will continue to have a very beneficial relationship with the department. They need you, and you have to work with them as well.

The Chairman: Do you wish to comment?

Mr. Brimley: I appreciate that the ministers have both stated publicly that their intent is not to compete directly. However, to quote them, they say that they do not want to be relentless competitors, which leads one very quickly to assume that they intend to be competitors, although not relentless ones. That is as yet undefined. What is the difference between a relentless competitor and a non-relentless competitor?

However, the role of Public Works and Government Services has been historically to manage Crown corporations and assets. That was the basis upon which it functioned. As you know, over the years, less and less is being built by governments; there is downsizing and cutting back. Many government structures are now empty and no new ones are being built. If the government were looking to show leadership, perhaps it could follow its own example of downsizing and look at outsourcing all of its building and public works to the private sector, thereby ridding itself of its architectural and engineering expertise. I said earlier that the Canadian marketplace can deliver.

Senator De Bané: Do you realize that you have just blatantly contradicted what your colleague just said?

Mr. Brimley: I do not believe I have.

Senator De Bané: He said that the government needs its own core of architects in its department.

Mr. Brimley: If it continues to do its own work.

Senator De Bané: Do you not see that by taking such an extreme position and saying that the department should not have its own core of competence you are hurting your credibility? There is a limit to the distrust of government. Surely we must have competent and talented professionals in that department. When the government authorizes a building, we have a vested interest in the department having unbiased people who bring their own perspective to the job.

Mr. Chairman, such an extreme position contradicts what Mr. Griffiths said in response to your question. He was very eloquent when he explained why the department needs architects.

Mr. Griffiths: I have a response, with great respect, Senator De Bané. Our association and the engineers objected to Bill C-30 from the beginning. It is really not a question of distrust of the government.

To put it another way, why is the government taking this position in this bill? Would this position not lead us to be suspicious? Would we not be foolish to say, "We trust you"?

Clause 10 of this bills deals with real property; real estate. That is our field. It is our livelihood and that of all our employees. I respectfully submit that we would be negligent if we were not protesting this bill.

Senator De Bané: Clauses 15 and 16 encompass all different professional services, and other professional associations do not seem to be worried.

Mr. Kennedy: I would like to put our objection into the context of the current fiscal and economic reality in which we are living. We certainly acknowledge the senator's comment about the history of the legislation and the history of the organization. However, we live in a different time now. We are living in a time of extreme fiscal constraint and a trend toward the generation of non-tax revenues. Our concern is not necessarily based on a lack of trust but on a recognition of the current fiscal reality and the opportunity, given the pressure to generate revenue, for this to become a competitive situation.

Senator Nolin: With all due respect to my colleague Senator De Bané, I think he was misleading the witness. It is not true that this is a replica of what was in the past two acts. We heard a witness last week state the contrary.

I have a question for Mr. Kennedy. How much does it cost to start up a geomatics business?

Mr. Kennedy: That is a difficult question to answer because there are all kinds of businesses in geomatics. It is a technologically oriented business, so there is a lot of use of computer technology. To start up a business and provide acceptable service in the sector would cost between $250,000 and $500,000.

Senator Nolin: You referred to NRCan, which was contemplating competing. How has that been resolved?

Mr. Kennedy: It was resolved through negotiation with them. There was a period of time wherein our working relationship had deteriorated to the point where there were examples of some competition from their organization. We dealt with the minister and the assistant deputy minister involved and the situation was resolved. We have since strengthened our working relationship. In fact, we have a memorandum of understanding with the organization between our two groups, and we are working effectively together. They are part of the industry team going after major international projects. We have a good working relationship, and it is all without benefit of any legislative provision for them to be able to provide services outside of the government.

Senator Nolin: Mr. Brimley, I understand that you have land surveyors in your organization.

Mr. Brimley: No, survey technologists.

Mr. Griffiths: Mr. Chairman, I should like to take advantage of this opportunity to say that balance is everything in the public and private sectors. I feel it is important that architects in the government and outside the government are in balance. There are the questions of an informed client, the preparing of briefs, people who understand talking to people inside and vice versa. That is a very important symbiotic relationship.

We would like to see the trust that Senator De Bané speaks of adequately reflected in Bill C-7. If we trust each other so much, why not respect our concerns and reflect this in the text of the bill?

The Chairman: If there are no further questions, our next witness is Professor Benoît Pelletier from the University of Ottawa, Faculty of Law, constitutional and administrative law section. He is here at our invitation because of particular questions that Senator Nolin brought to the attention of the committee. He asked that the committee invite some experts in administrative law.

I believe, Mr. Pelletier, that you have seen some of the testimony and have looked at some of our concerns. Please proceed.

[Translation]

Mr. Pelletier, Professor, Constitutional and Administrative Law, University of Ottawa: I want to begin by thanking you, Mr. Chairman, for giving me the honour of addressing you today with respect to clause 23 of the Bill you are currently considering.

Clause 23 is a provision known in administrative law as an enabling provision, which is to say one that gives the government the power to make regulations. It is the empowering source, that is the formal source of the government's regulation-making power.

I have been asked to review clause 23 from various angles. First of all, I intend to address the legality of the clause; secondly, its impact, as currently drafted, on the power of review of higher courts -- and I am referring here in particular to the Federal Court of Canada; and thirdly, the suitability of the wording used in clause 23.

So, what I would like to do is go through it paragraph by paragraph, attempting to be brief, precise and otherwise objective.

It should first of all be noted that sub-clause 23(1) gives the Government of Canada the power to make such regulations as it deems necessary for the management, maintenance, proper use and protection of federal real property and public works under the administration of the minister.

As for the wording used in subclause 23(1), the phrase "such regulations as the Governor in Council deems necessary" is very broad in scope. If we remove the words "as the Governor in Council deems necessary," right away we are left with an enabling power that is far more limited in scope.

The words "as the Governor in Council deems necessary" are therefore very broad in scope. As broad as it is, this provision is nonetheless perfectly legal.

One may wonder, though, why the legislator would choose to use such an expression. Why would the legislator want to provide in legislation that the government may make "such regulations as the Governor in Council deems necessary." Well, the purpose is obvious. This kind of provision can be found in a number of statutes, specifically the Emergencies Act and the War Measures Act.

A legislator uses this kind of provision to deliberately limit the power of review of higher courts. Let me explain. Clearly, if a law vests in the government a very broad regulatory power, thus giving it a great deal of discretion, it is far more difficult for the courts to intervene and revoke regulations, precisely because the legislator has made a point of giving the government all the discretion and latitude it needs to make regulations that it deems appropriate or necessary.

In other words, the broader and more general the enabling power, the more difficult it is for the courts to determine its scope. Similarly, the harder it is for the courts to determine the scope of that power, the harder it will be for them to review the legality of the regulations. In this case, the words "as the Governor in Council deems necessary" are part of a provision that essentially is aimed at making it more difficult for higher courts to intervene for the purposes of reviewing the legality of the regulations.

Before I go any further, I would like to make one point, just to be sure that there is no misunderstanding. Just because this provision makes it more difficult to exercise the power of review does not mean it makes it impossible. It simply indicates that the courts will be far more reluctant to intervene to review the legality of the regulations than they would otherwise for one thing, were the phrase "such regulations as the Governor in Council deems necessary" not part of this provision.

Secondly, I want to say that if we are dealing with a regulation that is clearly made in bad faith, the courts will intervene. I would even say that in this particular context -- we are not talking about emergency measures here -- the courts would intervene anyway to review the legality of any regulations that were not consistent with the spirit of the enabling legislation we are discussing. So, there are grounds on which the courts would intervene to review regulatory acts.

Thus there is some latitude for the courts to intervene, for example, in cases of obvious bad faith or when legislation does not abide by the spirit of the enabling provision -- hence the expression "as the Governor in Council deems necessary".

That is probably the most important point I can emphasize in advising you on the legislation you are now considering. If you keep the words "as the Governor in Council deems necessary," it's important that you know that the primary purpose of such a provision is to ultimately limit the power of review. If you remove those words from the Bill, you will be increasing to some extent -- and of course, we're talking about subtle differences here -- the latitude of the higher courts when it comes to reviewing the legality of regulations.

Here we are dealing with a subjective clause, as currently worded, that gives full discretion to the government to make such regulations as it deems appropriate. This clause in its current form, with the phrase "as the Governor in Council deems necessary" places limits on the power to review the legality of regulations, but does not completely block it.

If you remove those words from sub-clause 23(1) and simply say that the government or Governor in Council may make regulations for the management, maintenance, proper use and protection of federal real property, you will be left with a regulatory power that, compared to others, is perfectly in keeping with the norm -- in other words, neither too specific, nor too general.

Simply put, if we remove the words "as the Governor in Council deems necessary," we will be left with a regulatory power that applies to specific matters and which is relatively vulnerable to judicial review. It would provide greater latitude to the higher courts to review the legality of regulatory instruments. So those are my comments with respect to sub-clause 23(1).

Sub-clause 23(2) allows the government to impose such fines, for any contravention of a regulation, as it deems necessary.

I would first like to say that the words "as the Governor in Council deems necessary" do not pose the same problems here that they did in the first paragraph. What this means is that the government can pass regulations that impose fines for contravention of a regulation, if it deems it appropriate. If it does pass such regulations, of course judges and the courts will have to abide by them and ensure that regulatory provisions are enforced. If it does not, the courts will have to take note of that.

I just want to point out that a priori, this provision is perfectly legal. A number of different statutes contain powers such as this, that is, the power on the part of the government or Governor in Council to prescribe sanctions for the violation of a specific regulation, or in some cases, even for violation of the Act itself.

I just want to make the following comment. This wording is clearly not ideal; however, it is legal and can be found in other statutes. This clause even sets out a maximum amount for fines the government could impose. That is perfectly in order. However, it is not ideal because it allows the government to establish fines without actually specifying the offenses. No provision is actually made here for the power to establish an offense.

In my view, it would be far more appropriate to simply have a provision in the bill providing that any contravention of either the act or the regulations passed under its authority would constitute an offense and be subject to such and such a penalty. The penalty would be specified in the Act itself or in the regulations.

I would suggest adding another provision to establish an offense, even if fines for that offense are laid out in the Regulations. In my view, it is quite irregular to grant the power to impose sanctions, without making provision for the power to establish the offense, or without even establishing the offense that will trigger imposition of the fines being referred to.

So, some clear wording in the bill to establish the offense, while leaving it up to the government to set whatever fines it deems appropriate, would appear to me to be a far more proper way to proceed in law, particularly since in criminal matters, legislative enactments are given a restrictive interpretation. It is only natural to expect the legislator to be as clear as possible when delegating to the government responsibility for, or powers over, criminal matters.

Sub-clauses 23(2) and 23(3) also deal with regulations that can be made with respect to the non-passing or detention and seizure of goods. These two provisions, sub-clauses 23(2) and 23(3), allow the government to pass regulations to deny a right of way on federal property or to provide for the detention and seizure of goods at the risk of the owner. They also provide for the sale of the detained or seized goods, and allow the government to pay itself from the proceeds of the sale, leaving whatever surplus proceeds there may be to the owner.

There is no particular problem here as far as right of way is concerned. However, the seizure and sale of goods are somewhat trickier.

The reason they are trickier is this: it's important to realize that in our society nowadays, these are unique powers that are extremely important: the power to seize goods, to pay oneself from the proceeds of sale and, of course, the power to take the law into one's own hands.

I must say this provision goes quite far, based on the current wording. When we say to the government that it can determine the conditions under which goods can be seized, detained and even sold, so that it can pay itself with that money and pass on the rest to the owner of the goods, without defining it any further in the bill, and on top of that, do this via regulation, I think that is going pretty far. I do want to point out, though, that this in itself is not illegal; we are talking here about a legal power.

I also considered whether providing such discretion to the government over seizure and detention of goods could now be considered to violate the Canadian Charter of Rights and Freedoms. I concluded that at the present time, this is not inconsistent with the Charter of Rights and Freedoms. Section 7 of the Charter recognizes every individual's right to security of the person and does not deal with rights of an economic nature, such as those referred to in the bill that concerns us.

So, this provision goes very far. I repeat that it is neither illegal nor unconstitutional, based on the current state of the Supreme Court of Canada's case law. Once again, ideally, the act, rather than the regulations, should set out the conditions for seizure and detention of goods. For instance, we could say here that there is an obligation to notify the owner of the goods before and after seizure, and to give him an opportunity to present his views and have his case heard. As I say, this could ideally be set out in the act itself.

Nowadays, our sense of fundamental justice demands that the law be more specific when dealing with such important issues as the seizure and detention of goods.

As these clauses are currently worded, Parliament will in fact be handing the government the responsibility of making some of these legislative choices -- in other words, of making choices regarding legislative policy. Again, we are talking here about issues as important as the seizure and detention of goods.

It is not illegal. However, the bill could be a lot more specific in this area. Clause 23 of the bill is perfectly legal. We have seen this kind of wording in the past, in other statutes.

Has the use of such wording led to major problems before the courts? No. But nowadays, it is natural to expect that these kinds of issues be handled with greater precision and clarity by both the legislator and the government, particularly when they involve the seizure or detention of goods. Once again, in the interests of fundamental justice, this principle is more fully acknowledged in law nowadays than it has been in the past.

Also, with respect to the phrase "as the Governor in Council deems necessary," in sub-clause 1, I repeat that in the past, the primary purpose of such a subjective, discretionary provision has been to limit the higher courts' power of review.

Authors have stated that such provisions have fulfilled their role fairly effectively. Indeed, when the courts have had to deal with provisions such as these in the past, they have been far more reluctant to intervene for the purposes of reviewing their legality than they would have been, had such provisions not been there.

Senator Nolin: Mr. Pelletier, could you explain why the higher courts have this power of review? What is it used for?

Mr. Pelletier: The power of review is essentially intended to ensure that regulations are consistent with the law. When the Parliament of Canada, of which the Senate is a part, passes a law, we are talking about a standard that is the expression of the nation's sovereignty.

Thus we are talking about an independent standard which is primary, subject of course to the Constitution, which is supreme. This is a standard which in the final analysis carries full authority in the State.

When the legislator says that he doesn't want to make certain decisions, preferring to let the government pass regulations, Parliament is essentially delegating its responsibilities to the government. However, it can withdraw that delegation if it sees fit to do so. A delegated power, unlike a legislative power, is an ancillary power.

Legislative power is a sovereign, independent power. Delegated power -- such as the regulatory power -- is subordinate and subject to a higher authority.

Judicial review is a process that allows the courts to always ensure that the regulations passed are consistent with the law under which they have been passed. Judicial review allows the courts to intervene in cases of violation of constitutional charters or of citizens' violation acquired rights. It allows them to intervene if the regulation is not consistent with the enabling statute, or was not authorized by it. In other words, it allows the courts to intervene each time the government claims a power that the legislator never intended it to have. That is the purpose of the review power.

I would just like to say this about the clause we're discussing here. When the words "as the Governor in Council deems necessary" are used in connection with emergency measures, the case law shows that the courts have been very reluctant to declare the regulations illegal. This is what they said: the government has been given the power to make such regulations as it deems necessary. That is what the government has done, and it is not up to us to question that; the government had such discretion and exercised it. In choosing this wording, the legislator conveyed his willingness to confer a very broad regulatory power upon the government, and as a result, we will not interfere with that process.

That was understandable, particularly since these were regulations made in application of emergency measures -- for instance, the War Measures Act. So, the courts fully respected those government and policy choices. They said that as far as emergency powers are concerned, if the government makes a regulation -- of course, that regulation must abide by the spirit of the act -- we will be very reluctant to declare it illegal; given the particular nature of this issue, we believe that some choices are more appropriately made by the government, rather than by the courts.

When we're not dealing with emergency measures, as is the case here, the courts will intervene more readily. They will get involved if they see that the regulations passed bear no relation to the management of federal property. If that happens, they will make it known that the regulations are not consistent with the spirit of the enabling legislation.

However, they will exercise extreme caution before ruling that a regulation is illegal -- more caution than they would under normal circumstances. I must admit that in law, there is sometimes a very subtle difference between a somewhat loose test applied by the courts and a more rigorous one, but sometimes that makes all the difference. The legality or otherwise of a regulation sometimes depends on whether the courts take a liberal or strict approach to the issue. Did I answer your question, Senator Nolin?

Senator Nolin: Yes. As I understand it, you are recommending that Parliament express its intention more clearly?

Mr. Pelletier: I do think that greater clarity would probably be appropriate. For one thing, it would make the bill more modern.

Personally, I could live with clause 23 as it's currently drafted, but in law, greater precision never hurts.

Senator De Bané: Just one comment, Mr. Pelletier. Would you agree that since that this bill is actually an amalgamation of two statutes establishing two separate departments, one of them -- namely the Department of Public Works -- going as far back as the beginning of Confederation, it might be a good idea for your most appropriate and thoughtful recommendations to be the subject of a study by the Senate Committee on Legal and Constitutional Affairs, with a view to drafting recommendations on the law as it relates to government departments?

Mr. Pelletier: Yes, it might. I must say I'm not very familiar with the way Senate committees operate. I just want to point out that the changes I am suggesting in no way distort the spirit of the legislation. They only provide clarification. I must admit that a number of my recommendations relate more to the way the legislation is drafted -- in other words, to the actual wording of the provisions -- than to substantive issues.

Senator De Bané: So, would you say the way this bill is drafted betrays the department's age?

Mr. Pelletier: Yes, its age and perhaps its experience as well.

Senator De Bané: Thank you.

[English]

Senator Cools: I wish to thank Mr. Pelletier and say to the chairman that the business of regulation possesses us deeply. We are well aware of the slippery ground of which you speak, sir.

In terms of satisfying Senator Nolin, a joint committee of the Senate and the House of Commons looks at statutory instruments and regulations. I was thinking that, first, we could seek a reference to that committee to examine this matter once this bill becomes law. Second, in the ongoing or future work of the committee, perhaps we should take a look at this whole phenomenon of discretionary powers and delegated legislation. As I am sure you are aware, there is a whole body of literature on that topic, which is an important subject matter.

Mr. Chairman, perhaps we could put that among our studies to do and to consider this more deeply at some future time.

The Chairman: It will be a long time in the future, senator.

Thank you, Mr. Pelletier.

Mr. Quail, please proceed.

Mr. Ranald A. Quail, Deputy Minister, Department of Public Works and Government Services: Mr. Chairman and senators, a number of points were raised when I was last here.

I should like to note up front, in light of the comments made by Mr. Griffiths, that I am an engineer.

I was asked about three issues when I was here last. I should like to note that I have deposited with the clerk, for the benefit of the committee, some material with respect to each issue.

One issue concerned the number of people who left the organization last year. I can confirm that that number is 2,658. The number of people who have left since August of 1993 to March 31, 1996, is 4,335. That total is down 23 per cent from where we were when we first formed.

The Chairman: Were any of them on contract, or were they just released?

Mr. Quail: They were just released. Some could have been term employees, while others could have been permanent employees. Some would have gone out with the work force adjustment package. It varied.

The Chairman: Were any of them put back on contract to do other work?

Mr. Quail: No, not to my knowledge.

With this number of people leaving, we worked hard to get the numbers down and then have those people fill the positions.

A senator asked how much it had cost to fix the stairs and the wall, the Upper East Vaux wall project which is just outside this building and across the street. The cost was $248,600 and the work was performed by Plouffe Park.

Finally, senators asked for some views with respect to clause 23 of the bill. We have already dealt with it. We prepared a paper on the subject.

Some questions were asked about our international work and how we charged for it. Since June 1993, we have undertaken nine projects in the international arena. The total value of those projects is under $200,000. Normally, they would have involved one person.

One involved a conservation project in Baja California. That was a $38,600 contract. We provided test recording demonstrations and international training workshops on unique recording techniques. The fees we charged were based on time, plus expenses, which is the person's salary times two, plus expenses.

We had two people seconded to Canadian firms in Oman.

Although it varies, we have had nine projects over that period of time. That gives you some indication of our involvement.

During the same period of time through 1995, we hosted seven international delegations. In most cases, we would meet with them for half a day or a day. Some of these delegations were sponsored by External Affairs, obviously. Others were sponsored by Ellis-Don Construction. A number were sponsored by the CIDA. One was sponsored by Deloitte & Touche. We would talk about what it is we do in our organization and how things are organized in Canada.

We have started to invite -- and it is our intention to continue to do this -- the ACEC and others to join us during some of these briefings if they would like to know what is going on.

With respect to competition, there was some discussion earlier about our going out to tender contracts against companies X, Y or Z. There is no place for us in that area. If such a thing happens and is brought to our attention, we will investigate. We would back off if in fact we were doing it. I would hope that we are not doing it.

Some examples were given on other occasions. We are prepared to talk about those if anyone wishes to do so. I do not think there have been any recent indications of that.

The other side of competition which we have talked about is really a contracting-out issue. It flows from the discussion we had earlier about how much you do in house and how much you do out of house. We have an ongoing study on this issue at the present time. Members of some of the associations and the unions sit in on this study. We have an outside consultant, Arthur Anderson and Associates, doing the work for us. At the end of the day, we will be measuring how much work we will do in house and how much we will contract out.

At the moment, in terms of planning and design, the amount of contracting out we do has gone up from about 46 per cent to about 60 per cent. We hope that when we are finished this study, we will find ourselves in the position of understanding what is an appropriate level of outside work and what is appropriate level of inside work. We will do that in an open and consultative fashion.

I would argue that that is a way in which we have moved to build up some trust and understanding.

At the end of the day, I am still of the view that it is important that we work together, both nationally and internationally. I agree with the comments of the gentleman who said that if you cannot show you have done it at home, you cannot sell it overseas. In my view, that is absolutely correct. There are probably other views, but that is certainly one that I think is very important. For that reason, I would think that there must be a better and closer working relationship.

One witness did have a concern about not having a core capability. It is important to have a core capability inside the government. With that core capability, we can work with industry to do something that is useful and something that we can be proud of in Canada. The level of that core capability is part of the review that is going on in the steering committee, which is a response to some of the concerns raised while the bill was working its way through our legislative system.

There has been a lot of discussion with respect to clauses 16 and 10. We were under the impression that we were not asking for additional powers that were not contained in either the old DSS legislation or the public works legislation under sections 9(3) and 9(4), which we have embodied in clause 10 of the bill.

Why do we think it is necessary? First, our view is that it is not new. Second, the figures show that we will not grow. Third, we are in the position of reviewing what should be contracted out.

Having said that, we are looking at ways to make sense of what we do. You get whip-sawed on two sides. If we do not have a fairly clear piece of legislation, our authority is often questioned. I would argue in this particular case that our authority is fairly clear. Inside the department, we find that whenever we attempt to enter into some kind of agreement to second people or when we attempt drug purchasing programmes for the provinces, people say, "Where is your authority?" We then have a long discussion about our authority to enter into an agreement with "X". Meanwhile, "X" is saying, "I hate working with the government; you guys can never get anything; you are too slow; you are too this; you are too that."

You are now hearing some of my frustration. I am sorry.

This is a point of clarification. When the bill passed in the other place, two amendments were made that put some brakes around this issue. This is not enough for some of the associations, but I would argue that those amendments were adopted and do put some brakes on our authority in terms of being overzealous, assuming that we might turn ourselves around and start to compete, which I do not believe we ever will. That is not the world of tomorrow in which our department and other departments live.

I will give you some examples of where it makes sense to do certain things and where we think this bill will allow us to do those things much more easily.

The Perley bridge is in the Hawkesbury area. An agreement was made between the province of Quebec, the province of Ontario and ourselves. We have taken the responsibility for managing the project. In the course of doing so, we will tender to the private sector for all aspects of the project, but we will manage the project. We will be, as we mentioned earlier, the knowledgeable client. We will try to bring all the pieces together and then go outside for the design, the environmental assessment, the construction, and so on. That is an example of the clarity that we need in clause 16 so that we can get on with the job.

I have other examples. I talked about the drug purchasing plan. I think that we can do better if we build a trust with some sectors in terms of marketing internationally. If we cannot, we will not be there.

We are supposed to be in the business of looking after things back here for the federal government. That is what clause 5 states. That clause of the bill is our main bread and butter, and that is where we will do our work. However, if we can help and if we have the capability and the authority, we will do so. We will not be out front, but we will help. Maybe we can do it, but that takes trust.

I am not sure that there is anything more to say. I wanted to respond to some of the previous questions and to reiterate our position on clause 16. Certainly, we are open on the issue of an MOU with the Royal Architectural Institute of Canada -- and with anyone else, for that matter -- in terms of how we can make this work better.

I will stop there, Mr. Chairman.

Senator Nolin: You talked about terms with respect to those 2,800 employees. What does that mean?

Mr. Quail: Those would be people on employment for 60 or 90 days. We might bring them in for one year, that sort of thing.

Senator Nolin: They would not take up a person year.

Mr. Quail: No, they would take up person years. We were asked this question: How many people did we have on the payroll on day "X" and how many people did we have on the payroll on day "Y". That is what we told you.

Senator Nolin: Of those 2,800 people, some can come back.

Mr. Quail: From a term point of view, yes, if we needed a particular skill and wanted a term employee.

Senator Nolin: You heard the comments made by Mr. Pelletier concerning clause 23. Why do you want to keep that discretion?

Mr. Quail: I take advice on a lot of things, one of which is with respect to legal issues. In the preparation of the paper we submitted, we took advice from the Department of Justice. In this particular case, we took advice and had it reviewed by Mr. Keyes, who is senior counsel in the legislative section of the Department of Justice. He is here today.

I am not in the same league as my justice colleagues, but as I understood the presentation, it is not ideal; however, it is legal. We should get on with it. That is where I am at.

Senator Nolin: He did not say that you should get on with it.

Mr. Quail: No, those are my words.

[Translation]

Senator Nolin: So, am I to understand that the comments made by the Department of Justice are in the document you have given this gentleman?

Mr. Pelletier: Yes, absolutely.

Senator Nolin: Are you aware of the amendments that have been suggested -- in particular the one suggested last week by Mr. Franche. Do you have any comments on that suggested amendment to clause 5?

[English]

Mr. Quail: As I look at it, I am not sure which one you are dealing with.

Senator Nolin: Mr. Franche proposed to add at the end of clause 5 "on the understanding that the department will not place itself in direct competition with the private sector."

Mr. Quail: Are you asking for my view?

Senator Nolin: Yes.

Mr. Quail: My view is that there is adequate protection in the piece of legislation the way it is now.

Senator Nolin: Is it the same comment for the proposed amendments tabled and referred to today by three witnesses who wish to add after clause 10(2) "the completion of any public work"?

Mr. Quail: Yes.

Senator Nolin: Is it already implied in the bill that it is for the completion of any public work?

Mr. Quail: Yes. I guess that is what you are getting at. As far as I am concerned, we have put boxes around clause 16.

Senator Nolin: I am speaking of clause 10 now. It is proposed to add after clause 10(2)(c) the words "in completion of any public work".

Mr. Quail: I do not have a problem with leaving that subclause the way it is, senator.

[Translation]

Senator Nolin: This specifies the expenditures the minister may incur. The suggestion is intended to ensure that these expenditures relate to public works, as defined in clause 2 of the Bill. If those words are not added, you still believe there is adequate protection here. We know it is only for public works, not for private works.

[English]

Mr. Quail: No, unless we have a requirement to be asked to do it or unless we have a specific Order in Council to do it. However, from my point of view, there is no intention of getting into municipal work. If the issue is that we are moving towards municipal work, no, we are not. The override is clause 5 of the legislation, which states clearly that the department's activities shall be directed mainly towards providing the departments, boards and agencies of the Government of Canada with services. That, to me, is the overriding objective.

[Translation]

Senator Nolin: Finally, Mr. Franche referred to a number of examples. Were you present when those examples were raised? He mentioned the Davis Inlet relocation project, for instance. You competed and ended up landing the contract.

[English]

Mr. Quail: Mr. Chairman, perhaps I could ask my colleague Mr. Nurse to join me. We have looked at each one of these. Mr. Nurse is the assistant deputy minister for real property services, which is the section that deals with the area of architecture and engineering.

Mr. Michael Nurse, Assistant Deputy Minister, Real Property Services, Public Works and Government Services: With respect to the Davis Inlet project, we went back and researched it. The project management for the Davis Inlet project became aware that Public Works had the capability to do this kind of work -- a geographic information system type of work -- and asked Public Works and Government Services Canada to do a presentation. He then asked us to submit a proposal, which the region did. Unbeknownst to us at the time, the same individual asked for a proposal from a private firm, and we did not know that this person was asking us and asking a private firm. We understood they were asking for some information and asking us to do it.

The proposal from PWGSC was never considered, and we were never commissioned to do the work. We do not believe the work was done to this day. We were approached. We were asked for this information. We were unaware until afterwards that this person had then turned around and asked the private sector firm to do it. If we had been aware of that, we would have withdrawn immediately, as we have done in other situations. As soon as we are aware we are being asked to compete, we withdraw.

Senator Nolin: If you have researched all the examples to which Mr. Franche referred, perhaps you could comment on each of them. There are only a few other examples.

Mr. Nurse: Yes. A number of projects were referred to. If I may, I will use the reference as I understand it.

The Gander project was a request from the Newfoundland and Labrador Housing Corporation for an environmental assessment in 1994. The request came from the housing corporation. There was a proposal from Public Works to do a particular type of environmental assessment. However, we heard that a firm called BFL Consultants Limited was interested in the work, and we withdrew our proposal. That is the information to the best of our knowledge and research.

The city of Halifax asked us to perform an environmental assessment. It was work in support of preparations leading up to the G7 Summit. The G7 Summit was a high priority item on a very short time frame. A particular wharf was requested to be built in support of the G7 conference. PWC was asked by the city to undertake a quick environmental screening, which was carried out on a short-term basis. Again, we were asked directly to do the screening, and we were part of the overall work force supporting the G7 summit and foreign affairs. This was an example where we were asked to do something very quickly. It was an emergency, and we responded. If the city of Halifax had asked for a bid or a tender on that, we would not have applied.

With respect to the St. John's harbour development, the statement was that PWC undertook some work that was originally contracted to the private sector. This is a little complex, but I will attempt to go through it. There was a lot of sensitivity around this project from interest groups, as there often is around environmental assessments. This particular project actually was being carried out by a private sector firm. There was a lot of detail and what they referred to as "unit price items." For a typical project, there might be two 10-unit price items, and this is a case of quantity at a certain cost. This project, because of its sensitivity, had up to 80 unit price items. We were asked to offer advice from a project point of view, which we did. The consulting firm objected to this.

Subsequently, a contract dispute advisory board hearing took place. This allows consultants to dispute their costs. The firm was successful and received a settlement in their favour, but the firm had actually done the work. We were asked by the St. John's harbour development to overlook that at that time, and subsequently a contract dispute advisory board ruled in favour of the consultant. It was a complex project. There were concerns around it, and we intervened on a short-term basis.

There was a highway upgrade project in New Brunswick and Nova Scotia. There was environmental work to be done by PWGSC. Often the standards of the federal government and the provincial governments are different, and, in cases such as this, we are sometimes asked to intervene to offer advice with respect to what the impacts could be and what the information and input could be. In this case, we carried out a brief review at the request of the organization. The concern was strictly on the basis that they wanted an interpretation from us on the different levels of regulation, and we carried through on those. We were approached by Transport Canada to offer advice in this area.

The sixth item was called an integrated, multi-hazard, municipal emergency plan. This is quite old, and perhaps it tells us how much times have changed. This was an analysis of the possibility of developing a national shelter program in the event of nuclear disaster. It was back in 1986. We were approached to look at two pilot projects in a small city and a large city and to set up a standard that might be applied throughout the country. Some work was done, and we entered into negotiations with the province of Manitoba and the city of Brandon, and the province of Nova Scotia and the cities of Halifax and Dartmouth. We did the first step in the hazardous analysis. A plan was developed which was meant to be a test for potential use elsewhere in both of these areas. However, for a number of reasons, these things were never carried through because the need for this on a long-term basis proved to be unnecessary. We were approached to provide an idea and outline of what could be applied on a national basis.

Monenco-Agra Inc. submitted a proposal for the Fort Nelson airport lighting approach. We did the contract supervisory work. They were commissioned to do the design and provide resident supervision for recabling the high-intensity approach lighting for the Fort Nelson airport. The contract was for fees of $42,000. While the design and the plans were completely satisfactory, Transport Canada asked for fundamental changes to one part of the project.

The decision on the part of the architectural and engineering services, as they do sometimes, was to do the work in house. They made the decision. They have an in-house capability. They made the decision to do the in-house work because of the change in the larger project and the need for a specs change. The cost to that client was $26,000. It was a small project within a project. This was not a case where we were bidding against the private sector. This was a case where we used our in-house capability to do a quick change to the design.

The last item was a statement that we had some information in a brochure. That was a conference in Rio de Janeiro. In 1992, we were approached by a group called Canadian Airport Certificate Services Group. It was a consortium of private sector architects and engineering firms interested in pursuing airport work around the world. Our regional office had a lot of expertise in the airports area. Much of that expertise is no longer with us. They asked us to identify those services in our brochure. The regional firm did that, and when a number of architectural and engineering firms in the country saw it, they construed it to be an offering of our services.

I think it was inappropriate for us to put it in there, but we did nevertheless and were approached by a consortium of private sector firms. We did not know that an individual had approached another firm, or where we did know, we pulled out. In some cases, we intervened due to emergency or a short time frame. Certainly, relative to the rather large number of projects done, we do not feel that this was any attempt at all or any indication of our attempt to compete. Quite the contrary.

Many of these go back a number of years. Subsequently, in the last little while, we have moved even more dramatically in that direction. We have been very clear to the associations that we plan to move even further.

Senator Nolin: You have admitted that the information in the Rio de Janeiro publication was perhaps "an error," but why maintain advertising on the Internet?

Mr. Nurse: I do not believe we are advertising on the Internet.

Senator Nolin: I will show you the page with the signature of the department.

Mr. Quail: I know the page.

Look, we have to deal with services for other government departments. That was designed so that we could show other government departments the kind of businesses we are in.

Senator Nolin: Could you please rephrase that? You have a web site to show other departments what you are doing.

Mr. Quail: Yes.

Senator Stratton: Within the federal government.

Mr. Quail: Yes, but anyone can get on to it. I cannot argue that it is not there. I could almost say the reverse. If someone wants a page designed for PWGSC, I do not know how we would design it, senator, without mentioning engineers. We have engineers and architects. If I had to say anything after today's hearing, I would be more sensitive in talking about engineers and architects.

Having said that, I do not consider that a competition issue. Of the concerns that have been expressed to me, that one surprises me the most. It surprises me to the point that says we have a long way to go to build up trust.

The Chairman: On the Supply and Services side, the government had this power before. The government does its own printing in many cases, does it not? The government sells graphics to other departments, does it not?

Mr. Quail: As an optional service, yes.

The Chairman: It has the Canada Communication Group, which is like an ad agency. I have seen them in other buildings with signs advertising for other departments to do business with them. Previously an ad agency from, say, Toronto would be competing with the Canada Communication Group. Is that not true? They do now, do they not?

Mr. Quail: The Canada Communication Group is an optional service inside the government.

The Chairman: You can use them --

Mr. Quail: Or you can go outside.

The Chairman: They actually compete with an ad agency from Toronto or Ottawa for a particular project.

Mr. Quail: At one point they did. They do not at this particular point in time. They have preferred access. If you wish to enter into a contract with the Canada Communication Group, you can do so without going to tender. However, if there is a tender document, the Canada Communication Group will not compete.

The Chairman: But Supply and Services is involved in all of these businesses that compete with the private sector. Now we are placing this little piece of legislation that allows Supply and Services to do that in the Department of Public Works. If they did not have it in Public Works before, why is it necessary now? That is a very good question.

We have skated around one issue. Public Works existed before and did not have these powers. What is the problem whereby they need these powers now? Where are they deficient?

Mr. Quail: From my point of view, we were looking at what we could do that made sense. It made sense and it worked on the DSS side of the business before we amalgamated. We found ourselves in a position -- not often -- that whenever people talked to us about doing work on the architectural and engineering services side, we always had a debate inside the organization. The debate was this: What is your authority for doing business out there? Someone wants us to join them to go somewhere. We would have large debates on every occasion. Our view was that the world was changing. It had worked in DSS, and we were under the impression and are still under the impression that this is a good way to go relative to moving into the 21st century.

The Chairman: You are saying that Public Works will go the way of DSS.

Mr. Quail: No. If you are trying to suggest that it will go the way of CCG, the answer is "absolutely not."

The Chairman: Perhaps printing will.

Mr. Quail: Printing is CCG.

The Chairman: You used to do that before there was a CCG. You used to print.

Mr. Quail: It used to be mandatory. It has evolved. As the minister pointed out the other day when she was here, we are looking now at the question of privatizing.

[Translation]

Senator Nolin: Professionals working for the Department of Public Works have been accused of not paying their dues to provincial associations -- specifically associations of professional engineers or architects. Is that true?

[English]

Mr. Quail: That is true.

Senator Nolin: Why.

Mr. Quail: That is just the policy.

Mr. Nurse: My understanding is that a regulation of the Treasury Board does not permit the payment of these items. It is the choice of the individuals. The expectation is that if you do it for these two professional groups, you must do it for all professional groups. It becomes a cost to the federal government. That is my understanding. It is up to individuals to maintain their licensing privately, but it is not covered off by the federal government as a cost. As a result, we have a number of people operating without a membership. It is something we operate within the policy purview of the federal government and that is what we have done. I do not think it in any way denigrates the capability and professionalism. Nevertheless, that is the purview within which we operate.

Senator Cools: I have more than a question. Senator Nolin has worn me out a little.

Mr. Chairman, it seems that the officials and the minister have told us that they do not intend to compete with the private sector. The previous witness also told us that clause 23 is adequate. Everyone has told us that there is a need to build trust. Our committee has offered to facilitate.

Mr. Chairman, I move that we report the bill without amendment.

Senator Nolin: Can I please look at the document tabled by the department before we vote on anything?

The Chairman: We have a motion before us.

Senator Cools: You can speak to it.

The Chairman: We do not need a seconder. Is there any discussion?

Senator Stratton: I would like to move an amendment:

That clause 16 of Bill C-7 be amended

(a) on page 5,

(i) by replacing line 34 with the following:

16(1) The Minister may do anything for or on

(ii) by replacing lines 41 and 42 with the following:

Canada that requests the Minister to do that thing; and

(b) on page 6, by adding after line 2 the following:

(2) Nothing in paragraph 1(b) confers on the Minister the power to provide architectural or engineering services.

The Chairman: Is there any discussion on the amendment?

Senator Cools: Mr. Chairman, maybe I am not following. Senator Stratton's amendment is a proposed amendment to the bill, not a proposed amendment to my motion. I put a motion on the floor that the bill be reported without amendment. He cannot amend my motion that way.

The Chairman: We will deal with the amendment.

Senator Cools: As long as we know they are two different things.

The Chairman: We have a motion to report the bill without amendment, and we have an amendment to the bill proposed by Senator Stratton.

Senator Cools: His proposal is about an amendment to the bill. He is not amending my motion.

[Translation]

Senator Nolin: When Senator Stratton moves an amendment, he is implying that Senator Cools' motion to the effect that this bill be reported without amendment will be amended to say that the bill will be reported with amendments.

[English]

Senator Maheu: Why can we not call the vote on the motion of Senator Cools?

Senator Stratton: I would like to add, why would you not have the courage to vote on the amendment? If you feel comfortable with the bill, why would you not vote on the amendment?

Senator Maheu: I am calling the question.

The Chairman: You are calling the question on the amendment? I have an amendment to the bill on the floor.

Senator Maheu: Well, it was on the motion, unless we have discussion on the amendment.

The Chairman: There is an amendment on the floor. You cannot call the question on the original motion until the amendment is dealt with. Let us do that.

Would those in favour of the amendment please raise their hands?

Those opposed to the amendment?

What are the numbers?

Mr. John Desmarais, Clerk of the Committee: Yeas 2, nays 6.

The Chairman: The motion in amendment is defeated.

We are back to the main motion. Would those in favour of the motion that Bill C-7 be reported without amendment please raise their hands?

Those opposed?

What are the numbers for the record?

Mr. Desmarais: Yeas 6, nays 2.

The Chairman: I declare the motion carried, on division.

We have two other items which we will postpone until tomorrow. Tomorrow we will hear representatives from the Treasury Board.

The committee adjourned.