Introduction

Background

3.1 Canada’s Parliament buildings are the focal point of Canadian political life as well as a national treasure and a tourist destination. They convey the symbolic and ceremonial aspects of Parliament. Over time, the buildings and the site have become a visual symbol of Canada’s parliamentary democracy. In 1987, they were given the federal government’s highest-level heritage designation.

3.2 The Parliament buildings are set on the Parliament Hill grounds and are part of the Parliamentary Precinct, which includes the 3 city blocks facing Parliament Hill. Some of the buildings in the precinct are

• the Centre Block (with the adjacent Peace Tower)
• the West Block
• the East Block
• the Library of Parliament
• a visitor welcome centre (underground between the West Block and the Centre Block)
• the Confederation Building

The grounds provide the setting for national celebrations, public ceremonies, and lawful demonstrations.

3.3 The primary occupants of the Centre Block are members of the House of Commons and the Senate of Canada and their staff, and staff from the Library of Parliament and the Parliamentary Protective Service. In addition, there are millions of Canadian and international visitors who visit the Centre Block and the grounds of Parliament Hill.

3.4 Since the current Centre Block building was completed in 1927—to replace the original that was destroyed by a fire in 1916—only minor repairs have been made to the building. Over the years, assessments of the building conditions by Public Services and Procurement Canada showed decaying structural integrity, asbestos and other hazardous material on site, and tears and holes in the roof that led to water leaks and moisture damage. The building needed major repairs to bring it up to modern safety, environmental, and accessibility standards and to make it functional for parliamentarians and their staff. In our 2010 audit on rehabilitating the Parliament buildings, we reported that the department predicted that the Centre Block could experience “total failure” sometime between 2019 and 2025 if major repairs were not undertaken.

3.5 The Centre Block building, including the Peace Tower, is being rehabilitated to bring it up to modern standards, such as current building codes. In addition, the visitor welcome centre is being expanded to build a new Parliament Welcome Centre (Exhibit 3.1). These projects are referred to as the Centre Block Rehabilitation Program.

3.6 The Centre Block Rehabilitation Program is part of the Long Term Vision and Plan for the Parliamentary Precinct (Exhibit 3.2). This plan was developed in 2001 and updated in 2006, and it is the government’s multi-year strategy for

• restoring deteriorated heritage buildings in the Parliamentary Precinct
• improving accommodations to support parliamentary operations
• modernizing the buildings to make them accessible, sustainable, digital, and more secure

3.7 The Centre Block Rehabilitation Program was approved in 2016. The projected target date for completing construction is 2030 to 2031, with the reopening scheduled for 1 year later to allow Parliament to do testing and get the building ready for operations. The estimated cost of $4.5 billion to $5 billion was established in 2021 for the construction, as well as for contingencies—provisions for anticipated challenges, such as poorer building conditions than expected—and a reserve—provisions for unanticipated challenges, such as the increase in building-material costs due to unexpected events. This project is guided by a project management process that covers 3 phases from planning to construction (Exhibit 3.3). Our audit period included the planning phase to the initial stages of the construction phase.

3.8 Public Services and Procurement Canada operates as a common service organization for the federal government. The department is the custodian of federal real property, including the buildings and grounds in the Parliamentary Precinct. It is responsible for the care, upkeep, operations, and management of these buildings and grounds. For the Centre Block Rehabilitation Program, the department is responsible for the rehabilitation work done to the buildings, including activities such as project planning and delivery, as well as managing the schedule, scope, and costs.

3.9 In 2017, the department entered into 4 main contracts to support the delivery of the program. The contracts are for

• architectural and engineering services
• construction management services
• project management support services
• cost, time, and risk management support services

Focus of the audit

3.10 This audit focused on whether Public Services and Procurement Canada effectively managed the cost, schedule, and scope of the Centre Block Rehabilitation Program while balancing the requirements of Parliament, the heritage character of the building, sustainability, and equitable access for parliamentarians and the public. The audit also looked at whether the department, in cooperation with key partners and stakeholders, put in place a governance framework to support timely decisions for the Centre Block Rehabilitation Program.

3.11 This audit is important because the Centre Block building and the Peace Tower are iconic elements of Canadian heritage and a symbol of Canadian democracy. A significant amount of public funds have been allocated to this program, and Canadians should know the progress so far and whether the program has been effectively managed.

3.12 More details about the audit objective, scope, approach, and criteria are in About the Audit at the end of this report.

Findings and Recommendations

Public Services and Procurement Canada worked with stakeholders and experts to develop the scope of the Centre Block Rehabilitation Program while facing delays in receiving some user requirements

3.13 This finding matters because establishing the project scope in the planning phase is important to determine the key elements of a project, such as user needs and upgrades. For the Centre Block and the Parliament Welcome Centre, timely decisions related to parliamentarians’ user requirements are needed to establish the scope of the program and define design elements. All these elements are important to determine the construction cost and schedule of the program and to keep it on track.

3.14 During the planning phase of the Centre Block Rehabilitation Program, Public Services and Procurement Canada was to develop the scope of the Centre Block and the Parliament Welcome Centre projects. The scope of any project includes all products, services, and results of a project. Once the scope of a project is completed and the design has been defined, a schedule and cost can be established.

3.15 Public Services and Procurement Canada needed to balance many priorities in developing the scope for rehabilitating and modernizing the buildings and grounds for parliamentarians, their staff, and visitors. This needed to be done while respecting the heritage character of the buildings, improving accessibility, and reducing Parliament’s ecological footprint, in collaboration with key stakeholders. The scope of the Centre Block Rehabilitation Program includes

• replacing and repairing the Centre Block building components (for example, exterior walls, the roof, and mechanical and electrical systems)
• upgrading the Centre Block building to meet current building codes (for example, foundations, structural upgrades, and universal accessibility)
• modernizing the Centre Block to support 21st‑century parliamentary functions and workplaces (for example, meeting rooms and offices for parliamentarians and their staff, information technology, and security)
• building a new underground multi-level Parliament Welcome Centre
• conducting program early works (for example, building assessments and site preparation, like an access road)

Work with various experts and stakeholders

3.16 We found that Public Services and Procurement Canada gathered information from experts and relevant stakeholders to develop the scope for rehabilitating and modernizing the Centre Block building.

3.17 We found that the department assessed the Centre Block building and its site to gain a comprehensive understanding of the building conditions, such as its structural and mechanical conditions. The department also worked with experts to undertake an assessment to better understand the requirements needed to bring the buildings up to the current national building code. For example, the necessary upgrades to withstand an earthquake were included in the program’s scope.

3.18 We also found that the department worked with the parliamentary partners—the House of Commons, the Senate of Canada, the Library of Parliament, and the Parliamentary Protective Service—to determine their user requirements. This included consultations to understand requirements, such as the number of offices, the size of the lobbies, and the technical requirements of committee rooms. The parliamentary partners were also consulted on options for security, heritage conservation, sustainability, and accessibility.

3.19 We found that the department consulted with stakeholders to develop the scope of the program. For example, the department consulted with the federal organization that provides heritage conservation advice. In addition, the department consulted with Indigenous communities for guidance on incorporating Indigenous elements throughout the Centre Block and the Parliament Welcome Centre. Following consultations with Indigenous communities, the department began to make changes to ventilation design so that some traditional Indigenous ceremonial practices could take place indoors, such as smudging (involving prayer and the burning of sacred medicines) and the use of the qulliq (an oil lamp used by Arctic peoples).

3.20 In June 2021, the department published drawings that had been developed regarding the exterior, interior, and systems of the Centre Block building and the Parliament Welcome Centre. This was used to make public a program scope and estimated cost and to present key milestones to Canadians for the delivery of the program.

Consultations on heritage, sustainability, and accessibility elements

3.21 We found that the department consulted with stakeholders and experts on how to balance environmental sustainability and accessibility elements in the program’s scope while respecting the heritage nature of the Centre Block building.

3.22 We found that the department worked with experts to undertake assessments and determine specific sustainable design elements. The department also consulted with the parliamentary partners and stakeholders to discuss sustainability options that were aimed at balancing heritage requirements. For example, the department was examining various options for efficient energy use that would not compromise the heritage of the Centre Block building. This would help reduce greenhouse gas emissions and contribute to Canada’s commitment to achieve net zero greenhouse gas emissions by 2050.

3.23 We also found that the department consulted with experts and stakeholders to incorporate accessibility and inclusivity elements into the program scope while balancing the heritage attributes of the building and site, the visitor experience, security, and cultural values. For example, the scope included updating the existing washrooms throughout the Centre Block and the Parliament Welcome Centre to make them gender-neutral.

3.24 We found that the department was working toward attaining the following certifications in environmental design and accessibility for the Centre Block building and the Parliament Welcome Centre:

• Leadership in Energy and Environmental Design certification, a recognized green building certification program
• Rick Hansen Foundation Accessibility Certification, which certifies the level of physical and inclusive access of buildings and sites

3.25 We found that the department completed a gender-based analysis plus^{Definition 1} assessment on its Long Term Vision and Plan. However, it did not complete one specifically for the Centre Block or the Parliament Welcome Centre. The Centre Block and the Parliament Welcome Centre are the centrepiece of the Parliamentary Precinct and as such, they should be representative of the diversity of Canadians. Without a specific gender-based analysis plus assessment for this program, along with monitoring of its implementation, there may be missed opportunities for the program to be representative and inclusive of all Canadians.

3.26 Public Services and Procurement Canada should conduct a gender-based analysis plus assessment for the Centre Block Rehabilitation Program following federal government best practices in order to guide decision making, monitoring, and program review to ensure that the public spaces are inclusive and represent the diversity of all Canada’s peoples.

The department’s response. Agreed.

See Recommendations and Responses at the end of this report for detailed responses.

Delays in receiving key decisions on some user requirements

3.27 As the primary occupants of the Centre Block, the parliamentary partners are accountable for determining their user requirements related to the rehabilitation program. This includes items like the number and size of offices, committee rooms, and lobbies, as well as security. We found that, although the department had established a governance framework for the implementation of the program, decision making on some user requirements from the parliamentary partners remained fragmented and key decisions were not always endorsed in a timely manner.

3.28 Our 2010 audit on rehabilitating the Parliament buildings found that the governance framework that the department (formerly Public Works and Government Services Canada) had in place to guide the overall rehabilitation of the buildings was inadequate. We recommended that the minister, in cooperation with the parliamentary partners, develop mechanisms to transfer responsibility and accountability for the Parliament buildings to the House of Commons and the Senate of Canada. The department provided an action plan and took steps to address our recommendation. However, consensus among all stakeholders was not achieved, and no changes occurred to transfer responsibility and accountability. The department remained responsible for managing the rehabilitation project, while parliamentarians remained responsible for providing requirements for the use of the buildings.

3.29 In 2019, the department implemented an integrated governance framework for the Long Term Vision and Plan with oversight committees that included the Assistant Deputy Minister Oversight Committee and a new Deputy Minister Oversight Committee. These committees included representatives from the department and the parliamentary partners. We found that, to support decision making on the Long Term Vision and Plan, including the Centre Block Rehabilitation Program, the committees had a standing item on specific key decisions on user requirements related to the Centre Block Rehabilitation Program in their meeting agendas. However, they did not discuss the program’s overall scope, schedule, and costs. As a result, the parliamentary partners did not receive complete information about the overall progress and risks to the program through these committee meetings.

3.30 The House of Commons Board of Internal Economy is the governing body of the House of Commons, while the Standing Senate Committee on Internal Economy, Budgets and Administration considers all financial or administrative matters related to the internal management of the Senate of Canada. One of the roles of this board and committee is to establish and endorse key decisions on the user requirements proposed for the Centre Block Rehabilitation Program. The department provided information on design options for the key decisions to the committees individually and had to work with each parliamentary partner to reach agreement on user requirements. This created a risk to the timely delivery of the program if the House of Commons and the Senate of Canada endorsed conflicting decisions.

3.31 In 2021, 2 parliamentary committees started meeting jointly to discuss the Long Term Vision and Plan. The Senate committee and the House of Commons board established smaller groups—a Senate subcommittee and a House of Commons working group—that review the Long Term Vision and Plan and the renovations to the Centre Block. The subcommittee and the working group met jointly 3 times during our audit period to discuss areas of common interest and provide recommendations on user requirements to their respective committees. In our view, meeting jointly allows the department to present information to representatives of the 2 houses of Parliament at the same time to facilitate making recommendations on user requirements.

3.32 We found that the department presented a proposal for an integrated forum to the Long Term Vision and Plan Deputy Minister Oversight Committee in March 2022. The proposed forum would be composed of the Minister of Public Services and Procurement, the Speaker of the House of Commons, and the Speaker of the Senate of Canada to discuss matters of common interest, challenges, and risks on the implementation of the Long Term Vision and Plan. Consensus was not achieved among all partners on this proposal. The Long Term Vision and Plan Deputy Minister Oversight Committee agreed that the speakers of both houses of Parliament and the minister would meet on an ad hoc basis as required. However, by the end of the audit period, the department told us that no meetings had taken place.

3.33 We found that decision making remained fragmented, as discussions on key decisions on user requirements continued to be undertaken separately by the House of Commons and the Senate of Canada (Exhibit 3.4). This meant that key decisions on some user requirements from the parliamentary partners were not timely. The delays in some key decisions from the parliamentary partners resulted in the department not having all of the elements necessary to complete the scope of the Centre Block and the Parliament Welcome Centre in a timely manner. For example, a decision about the use of the east courtyard was required by spring 2020 but a final design was not agreed to by the parliamentary partner until March 2022. In addition, we found that at the end of our audit period, there were key decisions from the parliamentary partners that remained outstanding, such as the Centre Block security requirements.

3.34 We also found that delays in decision making on user requirements was an ongoing concern for the department for the delivery of the program. The department communicated concerns on the delays in receiving user requirements from the parliamentary partners to some parliamentary committees. However, the department had not publicly stated in a consistent manner that delays on key decisions for user requirements were an ongoing, significant risk. In our view, given the size and complexity of the program, as it moves further into the construction phase, potential scope changes will increase the impacts on the cost and schedule of the Centre Block Rehabilitation Program.

3.35 To support timely decision making from the parliamentary partners, Public Services and Procurement Canada should submit a progress update on the Centre Block Rehabilitation Program to the Speaker of the House of Commons and the Speaker of the Senate of Canada at the same time and at least twice a year. The update should outline

• key risks and mitigation measures to manage the program
• significant changes or adjustments, with an assessment of their impacts on the scope, costs, and overall schedule
• key decisions required to be made by the parliamentary partners with an expected timeline

The department’s response. Agreed.

See Recommendations and Responses at the end of this report for detailed responses.

Public Services and Procurement Canada put in place processes to manage the schedule and cost of the Centre Block Rehabilitation Program

3.36 This finding matters because the Centre Block Rehabilitation Program is a complex endeavour taking place over multiple years. Having processes in place to effectively manage the cost and schedule will help achieve the best outcomes for Canadians.

3.37 For a program of this size, the federal government requires that key processes be in place for effective management, such as project plans and risk assessments. It also requires that a department outline the schedule and costs of a program from the planning to the completion of a project.

3.38 At the start of a project, an initial schedule is developed to outline timelines for planning, design, and construction activities. Once the scope is defined during the planning phase, a project schedule is established, and key milestones are set for the delivery of the project. In 2016, the Centre Block Rehabilitation Program was approved with a preliminary completion date of 2029.

3.39 Given the size of the program, requests for funds have been done every 5 years. Public Services and Procurement Canada received funds in 2016 and in 2021 to support the Long Term Vision and Plan and for the planning, design and construction phases of the Centre Block Rehabilitation Program.

Flexible schedule management approach

3.40 We found that the department had processes in place to effectively manage the schedule. This included a flexible schedule management approach to help the program remain on schedule.

3.41 We found that the department used a flexible approach to effectively manage the scheduling and timing of activities and to mitigate risks. The department undertook early work activities, such as moving equipment from the building to allow it to be vacated and relocating major utilities, monuments, and trees. While not having all of the decisions on user requirements, the parliamentary partners agreed that the department could begin the excavation activities for the Parliament Welcome Centre in spring 2019 prior to giving full confirmation on its size in July 2020 (Exhibit 3.5). In our view, this approach contributed to the project remaining on schedule in these early phases.

3.42 During the planning phase of the program, the department based the schedule on a preliminary understanding of the Centre Block building’s condition. The schedule included planning activities, such as building assessments, scoping activities, and site preparation. With a better understanding of the project scope, the department established the schedule in 2021, with a target date for completing construction of 2030 to 2031.

3.43 We found that the department had a comprehensive plan for schedule management. This plan presented the roles and responsibilities of stakeholders, the tools and approaches that would be applied for schedule management, and a schedule management process that included

• planning the sequence of activities using a collaborative approach
• scheduling such activities to assign resources and timelines
• monitoring, evaluating, and reporting progress against the schedule
• taking mitigation and corrective actions to limit the impact of changes on the schedule

3.44 We found that the department worked collaboratively to effectively manage the schedule and the risks of delays. The department had multiple forums to discuss the planning and scheduling of activities. It had an integrated office that included representatives from the project contractors and the department, who planned, coordinated, and adjusted activities to keep the project on schedule. For example, in April 2020, the department identified the coronavirus disease COVID‑19^{Definition 2} pandemic as a risk to the schedule, and it developed strategies, such as taking certain health and safety measures to allow workers to remain on site, so the work could stay on schedule.

3.45 We found that Public Services and Procurement Canada had tools to monitor and inform different parties on the program’s progress. For example, it planned and monitored activities and project milestones using an integrated schedule that included 1 schedule for construction and 1 for design. This allowed for the coordination between the design and construction work. Starting in 2020, monthly dashboards were prepared to monitor progress. The dashboards showed various aspects of the program, including the top risks and corresponding mitigation strategies, project health, and project milestones.

Processes to effectively manage costs so far

3.46 We found that Public Services and Procurement Canada had processes in place to effectively manage the costs of the program so far and mitigate the risks of costs increasing. For example, the department

• used a cost estimate process and a change management process
• used monthly expenditure data from its financial system to monitor and compare these costs against monthly planned costs
• used monthly risk registers to identify potential cost increases
• reported internally using quarterly dashboards and presentations to departmental committees

3.47 The department received funding in 2016 and 2021 for planning, design, and construction activities for the rehabilitation of the Centre Block and the Parliament Welcome Centre. In planning for the overall costs of the program, the department included contingency amounts—for anticipated challenges, such as potential scope changes—and a reserve—for unanticipated challenges, such as changes to the cost of materials and labour. We found that following the planning and some design work from 2016 to 2021, the department used an independent firm to validate the overall costing methodology and establish a cost estimate for the construction of the Centre Block and the new Parliament Welcome Centre. In June 2021, the department published this cost estimate of $4.5 billion to $5 billion for the program. This amount was for construction activities as well as contingencies and a reserve.

3.48 We examined the department’s actual costs since the program was approved. We found that up to 31 July 2022, the department had spent a total of $880.7 million on rehabilitating the Centre Block and expanding the Parliament Welcome Centre. Of that amount, $450.0 million was spent on planning and design activities, such as assessments and preparing the construction site, while $430.7 million was spent on construction activities, against the cost estimate, including the excavation activities for the Parliament Welcome Centre (Exhibit 3.6), as well as on initiating activities to rehabilitate the Centre Block, such as the removal of hazardous material.

3.49 In our examination of the spending, we found that as the department managed the schedule in a flexible way, this also allowed the project to remain within costs. We found that so far, the department had kept spending below the 2016 approved funding (Exhibit 3.7). The department expected that spending would increase beginning in the 2023–24 fiscal year, as the project moves further into the construction phase. In our view, it is important to maintain rigorous cost management processes and monitor the risk of cost increases as the spending rises over the coming years.

3.50 Since September 2021, Public Services and Procurement Canada published quarterly reports on its website that provided additional information on the construction of the Centre Block Rehabilitation Program. The department also published information about the progress of the rehabilitation program in its Long Term Vision and Plan annual reports, which included cost reporting. However, we found that these reports were not published in a timely manner. For example, the 2020–21 and 2021–22 Long Term Vision and Plan annual reports had not been published by the end of our audit period.

3.51 To provide timely information to all Canadians, Public Services and Procurement Canada should publish its Long Term Vision and Plan annual reports within the calendar year.

The department’s response. Agreed.

See Recommendations and Responses at the end of this report for detailed responses.

Conclusion

3.52 We concluded that so far, Public Services and Procurement Canada had effectively managed the scope and had put processes in place to effectively manage the cost and schedule of the Centre Block Rehabilitation Program while balancing the requirements of the parliamentary partners, the heritage character of the building, sustainability, and equitable access for parliamentarians and the public.

3.53 We also concluded that the department, in cooperation with key partners and stakeholders, had put in place a governance framework for the Centre Block Rehabilitation Program. However, although the department made efforts to improve processes, decision making remained fragmented, and key decisions from the parliamentary partners on some user requirements were not timely.