NCC deferred maintenance deficit: A broken funding mechanism

A broken funding mechanism endangers important national heritage assets to serve short-term partisan political strategy.

Some years ago, an apocryphal tale circulated about Stornoway, official residence of the Leader of Her Majesty’s Loyal Opposition. The deck had been appropriated by a family of skunks, and a government work crew was duly dispatched, but the odiferous trespassers stayed and stayed. 

By LornaMCampbell – Own work, via Wikimedia Commons

It is said the workers weren’t evicting them…they were feeding them. 

Whatever the merits of that gesture as a political commentary at the time, in today’s bureaucratic lingo, one might say… “the mandate was mishandled.”  

The mandate to maintain Canada’s official residences is now delegated to the National Capital Commission (NCC), a Crown corporation created by Parliament in 1959 under the National Capital Act, which replaced the Federal District Commission (created in 1927). Under Part X of the Financial Administration Act, the NCC reports to Parliament through the minister designated under the National Capital Act, currently Liberal MP (Markham – Stouffville) Helena Jaczek. As Minister of Public Works and Government Services, Jaczek oversees an annual budget currently estimated in excess of $5.3 billion. 

Jaczek’s mandate letter (addressed to former Minister Tassi) states, “Advance work to rehabilitate and reinvigorate places and buildings of national significance under the responsibility of the NCC and Public Services and Procurement Canada.”  

The NCC fulfills three specific roles: “long-term planner of federal lands, principal steward of nationally significant public places, and creative partner committed to excellence in development and conservation.” It’s mandate for stewardship establishes the protection of important public assets as it’s fundamental raison d’être: “As the largest landowner in Canada’s Capital Region, the NCC cares for and protects vital public places that are unique to our nation’s symbolic, natural and cultural heritage.” This is why the NCC exists. 

Then why are the official residences falling apart? 

The NCC “Official Residences of Canada 2021 Asset Portfolio Condition Report (the Report)” details a lengthy history of neglect (sometimes euphemistically labelled “deferred maintenance”) due to underfunding, and establishes its number one priority as saving these important Canadian built-heritage public treasures. It states, “Furthermore, the NCC will concentrate its efforts on six priorities over the planning period, consistent with the 2017–2067 Plan for Canada’s Capital: 5 1. Address the condition of Canada’s Official Residences, and other critical NCC infrastructure and assets.” 

The Report states, “The Government of Canada’s Guide to the Management of Real Property indicates that the minimum level of annual investment needed to maintain real property in good condition is four per cent of its replacement value. Based on the CRV estimated at $653.2 million, sustainable funding for the Official Residences Portfolio equates to $26.1 million annually. This increase in annual appropriations, coupled with the one-time injection of $17.5 million per year over 10 years, would provide a sustainable source of funding that would enable the NCC to comply with its legislative mandate to conserve the built heritage of national interest under the NCC’s stewardship and meet current building code and legislative requirements.” 

What’s at stake?  

According to NCC, “Canada’s six Official Residences… are national treasures. No six homes play a larger role in enabling the leadership of our Constitutional Monarchy, our Federal Government, our Parliament, our Official Opposition and our international relations. Constitutional conventions, acts of Parliament and other legal instruments make them, first and foremost, homes to Canada’s official leaders while they hold office. As such, they have been host to many of the most significant events in Canada’s history. Combined with their unique architectural character, this makes them essential building blocks in Canada’s national pride. The Official Residences reflect the nation to Canadians and to foreign visitors, so they must be maintained at a level that reflects the importance of the role of the residents. However, funding for Official Residences has been so constrained in the last several decades that properties such as 24 Sussex no longer meet even this basic standard.” 

Indeed, they have been allowed to deteriorate over the years, to the point where the Official Residence of the Prime Minister of Canada is now considered uninhabitable by our current PM, Justin Trudeau. The house, with the traditional name of “Gorffwysfa” (Welsh for “The Place of Peace”) is in pieces. 

Try to imagine a U.S. President refusing to live at the White House, or a British PM at 10 Downing Street, or a President of France at the Élysée Palace, because those nations couldn’t afford property maintenance costs. The idea is absurd… but not in Canada, it seems. 

It’s not that the NCC is willfully neglecting its mandate — quite the opposite, given the Report — rather, consecutive governments have shown total disinterest in maintenance and repair, let alone budgeting for same.  

It begs the question, why? What is the problem exactly? 

With a national debt of almost $1.4 trillion, a budgetary deficit of $144.5 billion and government expenses of $628.9 billion, surely there must be a few paltry crumbs on some ministerial floor to sweep into the NCC maintenance budget. 

NCC is unequivocal: funding is required in order to allow NCC to “comply with its legislative mandate.”  

The Report goes on to state, “The $89.1 million deferred maintenance deficit in the current report, as was the case of the $83 million in the 2018 report, refers to “the backlog of unfunded major maintenance and renewal projects that have been deferred to future budgets. It results either from an accumulation of neglected routine maintenance items which evolve into more serious concerns or from failure to carry out major repair or restoration projects on facilities which have reached the end of their life cycle or have become obsolete.”” 

Why then, given that the work involved is legislatively mandated, can’t NCC get the funding it requires? Perhaps the government is waiting for pieces of the official residences to fall on some dignitary’s head. 

A federal crown corporation with a Board of Directors comprised of 15 members, NCC is helmed on a daily basis by CEO Tobi Nussbaum. The Advisory Committee on the Official Residences of Canada “advises on asset management and matters that pertain to the six official residences in Canada’s Capital Region.” It consists of seven members, one board observer, and two ex officio members (including Nussbaum). The committee is chaired by B.C.-based urban planner Marta Farevaag.  

The funding process for crown corporations involves a Memorandum to Cabinet (MC) from the responsible minister (in this case, Jaczek), which is reviewed by Treasury Board before being tabled before full Cabinet for discussion and vote.  

This broken funding mechanism has enabled governments to ignore their own property management guidelines, which specify a minimum level of annual investment to maintain real property in good condition of four per cent of replacement value and allow deterioration of some of Canada’s most historically significant built-heritage assets.  

By Alasdair McLellan – Own work, via Wikimedia Commons

24 Sussex Drive, Official Residence of the Prime Minister — the most ignored of the six — has been described as “politically sensitive.” That characterization still awaits explanation: a longstanding apprehension (among politicians of all stripes) that voters would misconstrue upkeep of the official residences as a frivolous perk for the occupants. Abandoned by Trudeau since 2015, Gorffwysfa now sits on one of the busiest tour routes in the capital,  a decaying beacon signaling Canada’s inability to recognize its own heritage. 

Most homeowners realize that it is false economy to ignore repairs. The term “deferred maintenance” may otherwise be defined as “property neglect.”  

The level of absurdity involved in ignoring federal guidelines to troll for fiscally responsible virtue points baffles many Canadians who recognize the historical and cultural significance of the official residences and who place value on celebrating our achievements as a nation through heritage conservation.   

By law, under the Official Residences Act, these residences are to “be maintained,” and kept “in repair.” That is a formal statutory duty. It is high time to start honouring it.  

Policy change will be necessary to ensure that Canada’s built-heritage assets are not sacrificed as easy political footballs by self-serving governments of the day. 

About the authors: 

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. 

Marc Denhez is a bilingual author, lawyer, and adjudicator with 30 years’ experience in the law of built, natural and intangible heritage. He received Canada’s National Heritage Award and is co-recipient of an Award of Excellence from the Canadian Institute of Planners. 

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