Auditors find Foreign Affairs skimping on embassy maintenance
by Lee Berthiaume (feat. Daryl Copeland)
November 7, 2013
OTTAWA — It appears Canada’s military bases aren’t the only government-owned facilities in danger of crumbling apart.
Canada’s auditor general recently found that the Defence Department was not investing enough in maintaining its barracks, armouries and runways, raising serious health and safety concerns.
Now a newly released Foreign Affairs audit shows the same is happening with Canadian embassies, chanceries and other diplomatic property around the world.
While Canadian diplomats don’t appear to be in any danger, the Foreign Affairs auditors warned that failing to properly invest in preventative maintenance increases the rate at which the facilities fall apart — costing much more in the long run.
It also threatens to undermine Canada’s image abroad as this country’s diplomatic buildings, many of them holding historic significance, become worn and dilapidated.
According to the audit report, federal government and industry standards recommend a minimum investment of two per cent of a building’s replacement cost to be invested in annual repairs and maintenance.
The Foreign Affairs department owns property worth more than $3 billion, according to the report written in July 2011 but only recently made public, which means it should be investing $61 million.
Yet the department only spent $19.2 million on such costs in 2009-10, representing 0.6 per cent of the real property value.
In fact, the auditors found maintenance and repair spending had been steadily going down since the Conservative government came to power in 2006.
“Taking into account the complexity and the importance of the real property portfolio abroad, it is crucial that the department ensure that sufficient funding is allocated to the maintenance of its buildings,” the report reads.
“The department must not forgo maintenance expenditures in order to save funds in the short term since there is a risk that it may jeopardize the sustainability of the real property portfolio and may result in increased costs in the long term.”
Another section of the report notes the department has 177 properties that are older than 40 years, including the Canadian embassies in Italy, France, Spain, Greece, and the high commission in London.
“These buildings, some of which have significant architectural features, are meant to represent Canada’s culture and heritage abroad,” the report reads.
“The prominence and potential heritage value of these buildings could be quite significant given their high profile and visibility to the general public.”
However, the auditors found the department has not taken heritage considerations into account when it comes to managing Canadian diplomatic property abroad.
“Without proper evaluations of its heritage properties, there is a risk that the department is not ensuring the proper preservation of the heritage character of its buildings,” the report reads.
Department spokesperson Chrystiane Roy said in an email that Foreign Affairs spent 0.68 per cent on property repair and maintenance last year.
Roy said if funds from another source were included, the total would be closer to 1.1 per cent — which is still half the two per cent target.
“Given today’s fiscal realities, we have maintained our level of investment at a reasonable level,” Roy said.
Foreign Affairs, like all federal departments, is facing a budget crunch as the Conservative government works to slay the deficit.
It is facing $169.8 million in cuts by 2014-15, which represents nearly seven per cent of its planned $2.6-billion budget for this fiscal year.
A great deal of its funding is inflexible, meaning the actual areas that can be cut are limited.
As a result, finding more money for repairs and maintenance will be difficult.
Former Canadian diplomat Daryl Copeland, now a senior fellow with the Canadian Defence and Foreign Affairs Institute, said postponing capital spending might appear to make sense in times of fiscal austerity.
“But it’s very much a case of long-term pain for short-term gain,” he said.
“What kind of experience is a visitor going to have when they come to your premises? If you want to attract the right kind of clientele, and I’m thinking people with real influence to make decisions, you want good places for them to come to.”
The audit report also noted that the department does not have an overarching plan for managing its property.
It also found that efforts to sell four properties to raise $10.5 million in revenue had met with failure “due to poor market conditions.”
The Conservative government’s most recent federal budget from March included a plan to sell a number of Canadian diplomatic residences in the hopes of raising $80 million.
Auditor General Michael Ferguson reported last month that a lack of funding for repairs and maintenance had left Defence Department officials struggling to keep bases and infrastructure from crumbling and turning into health hazards.
The funding shortfall had led to fire hazards and other health and safety risks that represent a significant danger to equipment and personnel in the short term, while threatening the military’s long-term ability to do its job, Ferguson’s report concluded.
Postmedia News reported in May that Foreign Affairs had identified asbestos in the official residences of Canadian diplomats in the Vatican, Beijing, Tokyo, Washington and Los Angeles.