Question Period Note: Rehabilitation of the National Capital Commission assets including 24 Sussex, Harrington Lake, and Stornoway

The Official Residences of Canada: Asset Portfolio Condition Report, identified a requirement for a one-time injection of $83 million over 10 years to address the deferred maintenance deficit for all 6 official residences and ensure that the official residences meet universal accessibility and sustainability requirements.

Note: the numbers in the asset condition report represent recommended and projected investments based on 2017 asset values, not actual expenditures/commitments/planned spending by the National Capital Commission (NCC). The NCC is working to have this report refreshed to reflect 2020 values.

• The NCC is an independent Crown Corporation and is responsible for year-round maintenance and operations for the 6 official residences in Canada’s National Capital Region (NCR)
  • The NCC recognizes the significance of the official residences and are committed to working with its partners to ensure that issues related to security, heritage preservation, sustainability, and accessibility are addressed
  • The NCC is working with federal partners to develop a plan for the future of 24 Sussex to enable the Government to make a prudent and informed decision
  • Our goal is to ensure that all aspects of the rehabilitation are taken into consideration, including health and safety (e.g. removal of hazardous materials, including asbestos), security, functionality, accessibility, design excellence and heritage preservation
  • The NCC is committed to full transparency and reports annually on capital expenditures incurred at the Official Residences

If pressed on Harrington Lake rehabilitation costs:

• The NCC’s work at Harrington Lake is part of a broader program to preserve, maintain and restore all official residences under NCC management

If pressed on the NCC’s Asset Portfolio Condition Report:

• Both the Government of Canada and the NCC recognize the importance of official residences of Canada, their heritage and cultural value
• That is why the NCC commissioned the 2018 report entitled Official Residences of Canada: Asset Portfolio Condition Report, detailing the investment required for the restoration of several of Canada’s official residences
• The NCC released this report in 2018 to remain transparent and open with both the Government of Canada and the Canadian public. The NCC is working to have this report refreshed to reflect 2020 values
• The NCC is committed to working with its partners to ensure that issues related to security, heritage preservation, sustainability, and accessibility are addressed

Official Residences of Canada Asset Portfolio Condition Report

In 2017, the NCC commissioned in-depth building condition reports for the largest and most complex buildings in the official residences portfolio. These reports 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 official residences (24 Sussex and Harrington Lake main cottage are in critical condition while the Farm is in poor condition). The complete report, Official Residences of Canada Asset Portfolio Condition Report, was endorsed by the NCC Board of Directors in April 2018 and publicly released in October 2018.

The report reflects an in-depth analysis of the official residences asset portfolio and highlights the shortfall in funding required to restore and maintain these heritage buildings.

24 Sussex

On October 16, 2018, the NCC released the Official Residences of Canada: Asset Portfolio Condition Report, which found that 24 Sussex Drive was in “critical” condition. The report identified a requirement for a one-time injection of $83 million over 10 years to address the deferred maintenance deficit for all 6 official residences, and a further $24.6 million annually for ongoing maintenance, repairs and renovations. The implementation of this 10-year recapitalization plan would also need to consider the investment required to ensure that the official residences meet universal accessibility and sustainability requirements, as well as escalation.

Over the last decade, the NCC has completed significant work at 24 Sussex including the rehabilitation of chimneys and fireplaces, fire compartmentalization, stabilization of the escarpment at the back and west sides of the property and the removal of hazardous materials, including asbestos, from the main building. However, it has not been able to proceed with the extensive rehabilitation of the residence and has been limited to completing work on the repairs relating to health and safety that were urgently required.

As 24 Sussex Drive has not seen significant investment in over 60 years, the additional work required would include the rehabilitation of the building envelope, mechanical and electrical systems, all buildings on the site would require extensive recapitalization and 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 our 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 ancillary buildings, asbestos testing and other life cycle evaluations.

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 (see pages 38 to 43). In October 2018, the NCC began the rehabilitation of this property.

On September 24, 2020, it was alleged that through the tabled response to OPQ Q-443, Parliament had been provided with figures that were inaccurate, based on information released through an associated ATIP (number 2020-00025) with regard to construction and renovations at the Prime Minister’s country residence and surrounding property at Harrington Lake.

Note: OPQ Q-443 and the associated ATIP 2020-00025 address substantially different questions – one about the $8.6M estimated for the renovation and construction costs for almost 5 years of work; the other about the actual total expenses incurred by the NCC over the first 4 and a half months of 2020, which was misinterpreted by the Canadian Taxpayer’s Federation to total more than $10 million worth in expenses at Harrington Lake.

On May 25, 2020, the following 3 projects, with a total estimated cost of $8.6 million, were detailed in response to OPQ-443:

• Main Cottage rehabilitation which began in September 2019 and is scheduled to be completed in December 2020, with an estimated project cost of $6.1 million:
  • Harrington Lake last saw major capital investment during the 1950s (over 60 years ago); the Main Cottage has not seen any investment since 2005, when the NCC made critical repairs to the roofing, eavestroughs, piping, electrical, mechanical and structural systems of the property
• The demolition of the Lower Guest Cottage, which was completed in winter 2018 and had a total project cost of $24,000
• The Farmhouse (formerly the Caretaker’s House) rehabilitation project which began in October 2018 and was completed in June 2019 and had an estimated project cost of $2.5 million:
  • 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 further deterioration and restore usability

In responding to the point of order raised on September 24, 2020, the NCC prepared documentation showing the Corporation’s actual expenditures on these 3 projects, for fiscal years 2016 to 2017 to 2019 to 2020, as well as the forecast amounts for 2020 to 2021 (these amounts exclude salaries).

Harrington Lake projects

• Rehabilitation project: Cottage main building. This project is net of recoveries (funding from partners)
  • Total of actual costs (2016 to 2017 to 2019 to 2020): $ 1,400,217
  • 2020 to 2021 forecast: $ 4,717,783
  • Total cost forecast: $ 6,118,000
• Rehabilitation project: Farmhouse building
  • Total of actual costs (2016 to 2017 to 2019 to 2020): $2,111,165
  • 2020 to 2021 forecast: $388,835
  • Total cost forecast: $2,500,000
• Rehabilitation project: Lower guest cottage
  • Total of actual costs (2016 to 2017 to 2019 to 2020): $23,681
  • 2020 to 2021 forecast: N/A
  • Total cost forecast: $23,681

Grand total of actual costs (2016 to 2017 to 2019 to 2020): $ 3,535,063

Grand total of 2020 to 2021 forecast: $ 5,106,618

Grand total cost forecast: $ 8,641,681

*This project is net of recoveries (funding from partners)

The NCC spent a total of $3.535 million on these projects between fiscal years 2016 to 2017 and 2019 to 2020, with projected costs of $5.107 million in 2020 to 2021, for a total estimated amount of $8.642 million in expenditures for these 3 projects. The expenses incurred by the NCC fall within the estimate provided in Q-443.

Stornoway

Originally built in 1913 to 1914, Stornoway holds a “recognized” heritage designation. The Main Residence functions primarily as a private residence for the Leader of the Opposition and their family. It also hosts occasional official events. It is not open to the public. The property comprises 0.42 hectares of grounds, a Main Residence, and a garage.

Since 1988, development plans, supported by asset condition reports for both the

building and grounds, have been completed and several upgrades have been made. There are a number of building systems that need to be replaced or upgraded (e.g. plumbing, heating and cooling equipment), the presence of asbestos complicates any interior work, and aspects of the residence need to be renovated to permit universal accessibility. Overall, Stornoway was determined to be in good condition in the NCC’s 2018 Official Residences of Canada: Asset Portfolio Condition Report (see pages 44 to 49).

Transition periods between residents provide the NCC with an opportunity to complete required life-cycle work and maintenance that is unrelated to the previous or incoming resident. As such, the NCC is using the current transition period at Stornoway to complete required life-cycle maintenance and repairs, including work in the kitchen (new dishwasher, countertop and backsplash, replacing end-of-life wood flooring with ceramic), the basement (insulation, heating pipe repairs), bathrooms (plumbing repairs, replace exhaust fans), general décor (refresh paint and upholstery, replace mattresses), and some exterior repairs (repairs to rot in veranda and main entrance wood trim, gutte

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