Thank you, Mr. Chairman. I have a copy of my own financial signing authority spread sheet which Mr. Antoine has indicated he would be prepared to copy and pass it out to Members to show how it works for one deputy minister. We could do that immediately.

With regard to the Lahm Ridge Tower lease, I was particularly concerned with the political implications or the perceived political sensitivity of that particular lease. I made a point of not discussing it specifically with my Minister, who, at that time, was Mr. Arlooktoo. I felt that, and still do feel very strongly that, the reason deputy ministers are given full signing authority for these kinds of matters is to take them out of the political arena and ensure contracts are awarded under my authority through the competitive process. The Lahm Ridge Tower lease was awarded in 1985, through the competitive process, and it had provisions in it for two five-year extensions. It was published at the time that the competitive process was finalized in 1985, so all bidders who submitted a proposal were aware if they were successful in getting the lease, that there was the ability to extend it upon mutual agreement of the parties. When I reviewed the request and realized we were in a position to negotiate better arrangements than were currently in place, I examined the lease in minute detail to be sure I had the authority to do it. I forged ahead to try to finalize the deal as quickly as we could. It happened at the time the Yellowknife office space plan was going through its tenth or twelfth iteration.

I had been to deputy ministers on at least six occasions discussing a variety of approaches the government could take to deal with its need for office space on a long-term basis. I had reached a consensus with the deputy ministers about which recommendations would be made to Cabinet, and three options were proposed to them. This occurred, in fact, the Minister of Public Works and Services signed the options' paper on July 31, 1997, just at the time we were negotiating with the former owner of the Lahm Ridge Tower. It was clear to me that it was not in the best interest of the government to get out of the lease. Two major government departments were residents in the building preparing for division and dealing with some fairly sensitive client needs in terms of both education and transportation.

I took a look at the implications of going out to the competitive process and negotiating new lease arrangements, recognized the disruption that was involved. The $1.5 million in tenant improvement costs the government was likely to incur, were not worth the benefits, of perhaps, getting a marginally lower base rent on the facility. Therefore, in conjunction with the deputy ministers of both departments who occupied the building, I made the decision to finalize the extension negotiations, and we proceeded to make the formal arrangements with the owner.

We knew at the time the owner was negotiating with a northern firm to purchase the facility and that the owner would have been in a better position to sell the building if he were able to show that he had longer term government leases which would provide some financial stability and would probably make it a bankable proposition.

It was not really relevant to us at that point who the northern business was. We were only concerned about dealing with some long standing problems. We felt we were paying far too much for utilities in the building, and the owner agreed to make changes which would cut our utility costs by $500,000 over the life of the extension.

We moved into that building in 1985, when it was opened, and I know how difficult times were, when the air handling equipment did not work, for example. We negotiated with the owner to replace the HVAC system, the air handling equipment, and he made that investment. On balance, when we reviewed the financial arrangements involved, we felt that it was a good deal and finalized the negotiations with a view toward signing the lease extension as quickly as possible. At no time did I talk to my Minister about the negotiations that were underway. My recollection is, I may have discussed it with him about a week after the event. Thank you.