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Portfolio organizations: Standing Committee on Government Operations and Estimates—March 4, 2022

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Canada Post health and safety

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Background

Level 2 medical masks

Distribution of masks has already begun as Canada Post ramps up efforts to distribute roughly 6 million level 2 masks per month across the Canada Post network, with full implementation to all employees by the end of February. Employees will receive instructions for the new masks when they arrive at their work location. To date, the masks have been well-received by employees due to their ease of use and added protection.

Devices requiring a fit test

Canada Post is required to verify the safety of any respiratory device used in the workplace by an employee. This includes Canadian Standards Association (CSA) standards, which require a fit test for certain respiratory devices (commonly referred to as N95 or KN95), with no exceptions. The fit is crucial to their effectiveness; therefore, a qualified fitter must conduct a fit test for each individual.

With over 50,000 employees in workplaces across the country, the requirement to safely use respirators with fit tests is not feasible in the short term. Starting with 3 of the company’s major facilities, Canada Post will be working with the Local Joint Health and Safety Committee (LJHSC) to use these respirators in controlled conditions, with plans to expand further. Respirators will be used for specified higher-risk tasks such as 2-person lifts, 2 people working inside a trailer to unload, and required 2-person in-vehicle training.

Mandatory vaccination

Canada Post’s mandatory vaccination practice came into effect on October 29, 2021, and all employees have been informed. The policy is in line with the federal government’s approach and was developed following a significant process of consultation and discussion with all bargaining agents, including the Canadian Union of Postal Workers.

Under the practice, all employees must attest to their vaccination status. As of November 26, any employee who is not fully vaccinated, is partially vaccinated and not on their way to full vaccination, or is not being accommodated based on limited grounds, has been placed on leave without pay.

Canada Post financial stability

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Background

The Canada Post Corporation is a federal Crown corporation created by the Government of Canada in 1981 under the Canada Post Corporation Act to operate a postal service for all Canadians. Canada Post’s long-standing mandate is to serve every Canadian address while maintaining financial self-sustainability.

Canada Post has the exclusive privilege to collect, transmit and deliver letters up to 500 grams within Canada. The Canada Post group of companies includes Canada Post and its 3 subsidiaries:

Canada Post operates at arm’s length from the government and reports to parliament through the minister of Public Services and Procurement. The minister is accountable for providing guidance and oversight to ensure that the overall direction and performance of Canada Post aligns with the government’s policies and objectives.

The pandemic has changed the needs of Canadians dramatically, putting further pressure on the corporation’s existing business model and operations. To grow the business and better meet these evolving needs, Canada Post must invest to expand capacity, improve the customer experience and innovate its operations.

The corporation faces a structural decline in mail volumes as customers shift to digital alternatives. The rapidly declining letter mail volumes, financial commitments such as funding pension obligations, expanding delivery network and maintaining success in a highly competitive parcel industry are challenges that may put the corporation’s long-term financial self-sustainability at risk.

Rehabilitation of the National Capital Commission assets including 24 Sussex, Stornoway and Harrington Lake

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Background

In 2017, the National Capital Commission (NCC) commissioned in-depth building condition reports for the largest and most complex buildings in the official residences portfolio. These reports, made public in 2018, found that 58% of the assets in the official residences portfolio were considered to be in “poor” to “critical” condition, including half of the main residences. This analysis was refreshed in 2021 using the same methodology. The findings are laid out in the Official Residences of Canada: 2021 Asset Portfolio Condition Report, which details the current state of all 6 official residences and their secondary buildings under the stewardship of the NCC. The latest findings confirm that the overall condition of the portfolio continues to deteriorate with only 24% of the assets considered to be in “good” condition, down from 34% in 2018. The report was presented to the NCC’s Board of Directors on June 23, 2021, and subsequently published on the NCC’s website.

The report highlights the shortfall in funding required to restore and maintain the heritage buildings in this asset portfolio. Since the 2018 report, the NCC has invested approximately $26 million in capital funding on rehabilitation work. Despite these investments, 61% of the assets in the official residences portfolio remain in poor or critical condition. The cost of addressing the portfolio’s deferred maintenance deficit has increased and it is now estimated that a one-time injection of $17.5 million per year, over 10 years—for a total of $175 million—is needed to close the deferred maintenance gap. In addition to this sum, the report identifies a need for $26.1 million in annual funding to cover ongoing maintenance, repair, and renovation costs.

24 Sussex

Over the last decade, the NCC has completed some work related to health and safety at 24 Sussex including the rehabilitation of chimneys and fireplaces, fire compartmentalization, stabilization of escarpment, and the removal of hazardous materials, such as asbestos, from the main building. However, the corporation has not been able to proceed with the extensive rehabilitation of the residence and has been limited to completing repairs that were urgently required for health and safety.

Since the property has not seen significant investment in over 60 years, the additional work required would include the rehabilitation of the building envelope, replacement of mechanical and electrical systems, and construction of universally accessible entrances and washrooms. All buildings on the site would require extensive recapitalization and the NCC would need prolonged access to the residence. The NCC is working with its federal partners to develop a plan for the future of 24 Sussex Drive and is ensuring that issues related to security, functionality, environmental sustainability, universal accessibility, design excellence, and heritage preservation are taken into consideration in its preparations. As part of its duties as steward of the official residences, the NCC is renewing various studies, including functional program options for the building, site surveys of the grounds, the main building and the 4 secondary buildings, asbestos testing, and other life cycle evaluations.

Stornoway

Stornoway holds a “recognized” federal heritage designation. The main residence functions primarily as a private residence for the leader of the opposition and their family. Since 1988, development plans, supported by asset condition reports for both the building and grounds, have been completed and several upgrades have been made. Currently, elements of the main residence that need to be upgraded or replaced include the building envelope, fire alarm, as well as the electrical and heating and cooling systems. Aspects of the residence also need to be renovated to permit universal accessibility. Overall, Stornoway was determined to be in “fair” condition in the NCC’s Official Residences of Canada: 2021 Asset Portfolio Condition Report.

Harrington Lake

While the main cottage at Harrington Lake is 95 years old, most of the buildings were built between 1850 and 1925. Harrington Lake, the official country residence of the prime minister, is used for both official and private functions, with buildings that can accommodate official business as well as state visits. The Harrington Lake property was deemed to be in “critical” condition in the NCC’s 2018 Official Residences of Canada: Asset Portfolio Condition Report.

As part of a broader long-term program to preserve, maintain and restore all the official residences under NCC management, the NCC allocated $8.6 million to rehabilitate the Harrington Lake property. This project improved the condition of the farmhouse (formerly known as the caretaker’s cottage) from critical to good, and the condition of the main cottage, from critical to fair, and it was completed under budget.

The farmhouse, built in 1850, was dismantled, relocated and rebuilt on a larger footprint close to the main cottage to improve its practicality and use. This $2.5-million rehabilitation project began in the fall of 2018 and was completed in June 2019. The investment in the farmhouse has provided the site with a more functional, environmentally friendly building. The renovated building features full universal accessibility on the main floor, and offers more useable space for family rooms, studies, offices, meeting areas, official state functions, and use by the Royal Canadian Mounted Police (RCMP) and foreign dignitaries’ security details. Prior to this work, the building had been closed since 2008 due to health and safety concerns; it was in need of complete rehabilitation to prevent its collapse.

The rehabilitation work at the main cottage involved maintenance and life cycle renewal to stabilize key systems and building elements to simplify ongoing maintenance, and to reduce insect infiltration. Some examples of the work include:

This project began in the fall of 2019 and was substantially completed in December 2020. The overall cost of $5.792 million was under the initial $6.1 million budget. This investment falls short of addressing all of the required renovations at Harrington Lake and does not include modern building improvements such as universal accessibility and environment sustainability.

National Capital Commission and payment-in-lieu-of-taxes

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Under section 125 of the Constitution Act, 1867, the Government of Canada is exempt from municipal taxation. As a federal agent Crown corporation, this exemption also applies to the NCC. Since 1950, to demonstrate the Government of Canada’s commitment to supporting local communities, the federal government has adopted legislation that provides for the fair and equitable administration of PILT where it owns real property.

In support of municipalities, and as permitted under the National Capital Act, the NCC may and does pay its fair share of PILT to various municipalities in the National Capital Region. However, as per article 16 of the act, the NCC does not pay PILT on parks with the exception of Gatineau Park.

The Municipality of Chelsea and the City of Gatineau referred their PILT concerns with the NCC to a Dispute Advisory Panel (DAP). A DAP is a federal body responsible for making recommendations on PILT disputes. It is a recommendatory, not a judicial body, and its membership is appointed by the Governor in Council on the recommendation of the minister of Public Services and Procurement.

The participation in a DAP process was an attempt to resolve outstanding questions relating to municipal assessments applied by the municipalities. In the Municipality of Chelsea alone, the NCC saw properties in Gatineau Park have a 58% increase in PILT applied to them between 2017 and 2019. The properties were assessed as though they had development value and could be sold for commercial purposes. However, the NCC has neither the intention nor the unilateral ability under federal law or its planning framework to sell Gatineau Park lands for development. Moreover, Chelsea’s own land-use plan formally categorizes many of these parcels as being land for conservation purposes.

The corporation is concerned with the impacts of a decision, both in financial terms as well as in principle, that would see its vast public conservation holdings, including but not limited to Gatineau Park, assessed and valued in this way. Furthermore, it is concerned with the impacts of such a decision on other federal custodians. For example, if the approach taken by the municipalities of Gatineau and Chelsea were to be applied across the entire province of Quebec, the impact on entities such as Parks Canada would be in the hundreds of millions.

The NCC has been in negotiations with the municipalities of Chelsea and Gatineau since July 2021. In advance of an October 2021 meeting of the Chelsea Municipal Council, the NCC issued a letter to council members further detailing the offer made to the municipality. This letter has since been made public. In December 2021, Chelsea’s council voted unanimously to take the dispute with the NCC to federal court. The municipality is seeking a total of $1.4 million in PILT since 2018 for its lands in Gatineau Park.

Canada Lands Company affordable housing initiatives

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Canada Lands Company supports the inclusion of affordable housing in its projects by meeting or exceeding affordable housing requirements in municipalities across the country. Whether a municipality has established a specific requirement, Canada Lands looks to achieve a minimum of 10% affordable housing units within its projects. In many instances the percentage is greater. Since its inception, Canada Lands has enabled the creation of approximately 2,000 affordable housing units.

Canada Lands Company is a large purveyor of affordable housing opportunities for the government. It has partnered with Canada Mortgage and Housing Corporation, Public Services and Procurement Canada and Employment and Social Development Canada from the inception of the federal lands initiative (within the National Housing Strategy). At present, Canada Lands Company has provided 8 properties across the country for new affordable housing through the federal lands initiative and has identified other potential opportunities in the coming years.

Acquisition of 80 Elgin street

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80 Elgin street is at a prominent location near important landmarks in the National Capital Region, such as the Parliamentary Precinct, National Arts Centre, National War Memorial, Château Laurier, and Rideau Canal. It is part of the National Interest Land Mass, which consists of lands required in the long term to support the political, administrative, and symbolic functions of the capital.

The British High Commission has sold 80 Elgin street to the NCC because the British High Commission is constructing a new building for its mission headquarters adjacent to Earnscliffe, the official residence of the British High Commissioner, at 140 Sussex drive.

The NCC’s interest in acquiring 80 Elgin street was motivated by 3 factors. First, there is limited suitable space available for federal offices in proximity to the Parliamentary Precinct and having sufficient space for federal offices is critical to the timing and sequencing of projects associated with the Long-Term Vision and Plan for the Parliamentary Precinct. Consequently, Public Services and Procurement Canada (PSPC) has expressed an interest in acquiring the land and buildings at 30 Metcalfe street and 100 Sparks street from the NCC, as well as assuming the NCC’s interests in its lease of its current headquarters at 40 Elgin street. Second, 80 Elgin street is an iconic property. Lastly, the move to 80 Elgin provided the NCC the opportunity to modernize its headquarter offices, which is something the corporation as been considering as its offices have not been updated in many years and they are insufficient for the NCC’s current needs.

PSPC has agreed to provide capital funding contributions to the NCC of up to $32 million to fit up 80 Elgin street, based on an indicative estimate provided by an independent third party. 80 Elgin street would become the NCC’s headquarters. The fit up would include elements to meet the NCC’s strategy of creating an activity-based workplace, address Treasury Board Secretariat objectives for federal workspaces after the pandemic, and address Government of Canada goals for sustainability.

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