Building momentum at 24 Sussex Drive: The reality behind the headlines

While recent news reporting and commentary regarding the deteriorating condition and ultimate fate of the Official Residence of the Prime Minister of Canada (24 Sussex Drive) have painted a grim picture of politically driven neglect by the National Capital Commission (NCC) over decades of successive governments — culminating in a vacant heritage building with a heart-stopping $37 million “deferred maintenance” liability sticker — the reality is somewhat different.

In fact, even the $37 million price tag is questionable.

The chronology of events dating back to 1987, when custody of the official residences was transferred under the Brian Mulroney government from then Public Works Canada to the NCC, shows a pattern of gathering momentum in recent years, albeit hindered at times by political posturing and bureaucratic wheel-spinning.

Here are the milestones:

• From 1987 to 1989, the NCC conducted initial condition assessments of the six official residences;
• These were re-assessed in 1999, under the Jean Chretien government;
• In 2005, NCC completed yet another re-assessment, as part of an application for capital funding, under the Martin government and subsequently undertook extensive rehabilitation of the official residences but excluding 24 Sussex;
• In 2007 a Special Examination of the NCC was conducted by the Auditor General of Canada (OAG), followed in 2008 by a report that included an examination of “Conservation of the Official Residences (Harper minority);
• Costs in 2008 were reportedly estimated at $10 million.

This 2008 OAG report sounded alarm bells for both 24 Sussex and Rideau Hall, the Official Residence of the Governor General of Canada, saying “The NCC believes that rehabilitating the Prime Minister’s residence has become an urgent matter. It expects the work to take 12 to 15 months, if there are no unexpected complications. However, this will be possible only if the NCC has prolonged access to the residence to complete the needed work. [emphasis added] The official residences, particularly Rideau Hall and 24 Sussex Drive, are showing signs of fatigue and wear, and require extensive repair work.”

The following year, in 2009 during the Harper minority, the NCC commissioned plans and drawings from an architect (whose name was redacted from documents obtained from NCC through an ATIA request) for the purpose of issuing a public tender for remediation work on 24 Sussex. For whatever reasons, plans changed, possibly driven by the fragile political optics of a minority government, and the tender was never issued.

Prime Minister Stephen Harper and his family occupied 24 Sussex until 2015, when newly elected Prime Minister Justin Trudeau refused to move in, choosing instead to live at Rideau Cottage, on the grounds of Rideau Hall. It was reported that the decision was made in order to allow NCC access to plan for repair work.

In 2017, another Special Examination of the NCC was conducted by the OAG, which identified risk management and asset maintenance as key concerns. It recommended that NCC act to “address its strategic risk related to asset maintenance” and “work with appropriate government entities, through the corporate planning process and other means, so that steps are taken to address this strategic risk.”

The report concluded, “Although not specifically studied in the OAG’s special examination, the Committee was very concerned with the Corporation’s responses regarding the status of the planned renovations to 24 Sussex Drive, one of the official residences of the Prime Minister. As a result, the Committee will request this information from the Minister of Canadian Heritage; it may also bring this matter to the attention of the House of Commons Standing Committee on Canadian Heritage. The Committee concludes that although the NCC had sound systems and practices in place, it did not do a good job regarding asset maintenance, including risk management. It has, however, implemented corrective measures to address these deficiencies.”

During 2017, NCC commissioned third-party in-depth Building Condition Reports (BCR) on the official residences but excluded 24 Sussex on the basis that its condition was “well known.” To date, there is no BCR on 24 Sussex.

The same year, Turner & Townsend (TT) delivered its Final Report – Cost Assurance and Benchmarking Exercise – 24 Sussex Drive to NCC, reporting on their review of the 2009 drawings and specifications, and cost estimates. TT “reviewed the existing cost estimate for the architectural and security components of the (proposed) rehabilitation,” using a functional benchmarking approach to compare costs against “various Canadian and international official residence projects.” The report explained, “Turner and Townsend and NCC agreed that there are few, if any, projects with a similar programmatic function (official residence of a G20 leader) and accessible cost data [emphasis added]. As such, Turner & Townsend elected to undertake a functional benchmarking approach…benchmarking key aspects of the project against relevant peer projects.” TT found that previous estimates were, “reasonable and based on a sound and best practice approach to developing cost estimates.”

Although costs were redacted by NCC from the report, several contingencies and soft costs were included:

Architectural

• Escalation – 1.147 Q42009 to Q4 2015
• Contingency – 20 per cent
• Risk Contingency – 18.5 per cent

Security

• Escalation – none
• Contingency – 20 per cent
• Risk – 17.5 per cent
• Design Fees – 20 per cent
• Construction Management – redacted
• Security Advisor – redacted
• Site Security – redacted
• Operations and Maintenance – redacted.

The proposed scope of work included, “expansion of the main building (4000 square feet) …renovations to the main building, and reconstruction of the pool building.”

TT included the disclaimer, “We are unable to comment on the $/sf allowance for interior repurposing and future space addition in the absence of identified scope for these items.” This implies that significant portions of the proposed work have been costed through allowances, without knowing the exact scope of work involved.

The House of Commons Standing Committee on Environment and Sustainable Development also presented a report in 2017, entitled Preserving Canada’s Heritage: The Foundation for Tomorrow which recommended “taking stronger actions to preserve Canada’s heritage properties.”

In June 2019, the “Report of the Standing Committee on Public Accounts, of the ‘2018 Fall Reports of the AG: Conserving Federal Heritage Properties’” was published. It was critical of federal heritage conservation generally, stating past OAG reports had found that “heritage properties were in poor condition, and the government could not conserve them.” It singled out Parks Canada, finding that it had “not strengthened the legal framework to conserve heritage properties, leaving them still at risk” and that “conservation efforts since 2003 were not enough to ensure federal organizations conserved heritage properties…the government agreed that the conservation regime should be strengthened…”

In 2021 NCC released its quickly controversial Asset Portfolio Condition Report – Official Residences of Canada, detailing the “critical” condition of 24 Sussex and its estimated $36.64 million “deferred maintenance” price tag and $89.1 million cost across all residences. It stated that, “costs provided…were estimated and validated by Turner & Townsend.”

The report highlighted “decades of underfunding” explaining that “funding has never been available from government to meet the minimum annual level of maintenance (four per cent of replacement value) recommended in Canada’s Guide to the Management of Real Property” and stated that, as a result of neglect (deferred maintenance), “many assets have deteriorated faster than life cycle forecasts would predict and now require complete recapitalization. The Main Residence at 24 Sussex carries a Facility Condition Index (FCI) of 0.91 (DFRP Rating = Critical) and is considered a very high priority building, with an API score of 97. Given its current condition and API, a major rehabilitation of the Main Residence is recommended.”

In January 2022, HOK Architects delivered a Preliminary Functional Programming Report – Official Residence of the Prime Minister to NCC, outlining spatial requirements for the Prime Minister’s residence, including over 4,000 square feet of additional floor area.

In November 2022, the NCC announced closure of 24 Sussex for “necessary repairs.”

Putting the widely reported and highly controversial $37 million price tag into perspective, it is predicated upon cost estimates prepared in 2009 by various parties without benefit of a Building Condition Report, lacking a complete scope of work, escalated for inflation using a percentage, verified by comparison to other buildings in other countries with dissimilar programmatic functions, and includes large contingency and soft cost estimates.

Confusingly, NCC clearly states in the Asset Portfolio Condition Report that the estimate does not include the “security, grounds, pool, or site infrastructure” which are included within the TT benchmarking analysis. While the $37 million may be somewhat shaky — simply subtracting the contingencies reduces the number to a less sensationalistic $22.5 million — the chronology of events does suggest a momentum of sorts over recent years, as NCC plans remediation works yet to be funded by government.

A recent Angus Reid poll found that 64 per cent of Canadians believe “fear of political fallout” explains why governments have refused to fund maintenance. Former Prime Minister Jean Chretien recently supported repairing 24 Sussex, saying, “It is an embarrassment to the nation. But I was there; I did not repair it either … because I didn’t want you guys to think I was a spender while I was cutting money to balance the books.”

The former Prime Minister has a point.

Imagine this happening at the White House, 10 Downing Street, or the Palais de l’Elysee.

Perhaps the chronology of events suggests hope for 24 Sussex.

Ken Grafton is a writer living by the river in Aylmer, Quebec, just downwind from Parliament Hill. He is a freelance contributor for The Hamilton Spectator and The Chicago Tribune. His writing has appeared in many local, national and international newspapers and publications.