06/15/2015 05:37 EDT | Updated 06/15/2016 05:59 EDT

$24.5M Public Works estimate for new office search a step too far, says Senate

OTTAWA - The Senate says the federal Public Works department is overestimating the cost of finding temporary office space for senators, using outdated figures to cast the upper chamber in a bad light.

For months, Public Works has been urging the Senate to expand the search for space by an extra block south of Parliament Hill to avoid spending $24.5 million more over 13 years to lease the needed space.

But the Senate says the department is working with old numbers that overstate the lease rates the downtown Ottawa market commands.

A consultant's report the Senate commissioned last year found Public Works is using an annual lease rate of $750 per square metre of space, about $3 million per year for the Senate's needs.

A Senate official, not authorized to discuss the unreleased report, says it shows the rate is about 10 years old, and that current rates have cooled to about $540 per square metre, or about $2.16 million per year.

The difference between the figures is about $11 million over 13 years— less than half the estimate from Public Works.

The department didn't immediately respond to a request for comment Monday, but has said previously its estimate was based on having to take the lease to tender, rather than negotiate directly with a landlord.

Michel Patrice, the Senate's law clerk, said Public Works used the outdated figures when it warned about the high cost of not quickly expanding the real estate search.

Public Works originally wanted to go farther afield from Parliament Hill than the extra block the department is pushing for now, Patrice said.

That would spread senators so thin around downtown Ottawa that it would cost taxpayers more for things like transportation and IT support, and make securing each location a costly feat, he added.

The Senate wants to keep senators close together to save costs, he said, and remain within a 10-minute walk of the temporary Senate chamber in the government conference centre along the Rideau Canal.

The tussle over one of the most fundamental tenets of real estate — 'location, location, location' — became the butt of jokes Monday in the House of Commons over how one city block could cost taxpayers an extra $24.5 million.

NDP Leader Tom Mulcair joked the extra block was $270,000 "per senator's step."

Charlie Angus, the party's ethics critic, labelled the real estate spat a "ripoff of the taxpayer by rich insiders who are too lazy to walk a block to go to work."

Public Works Minister Diane Finley told the Commons her department was working to meet the Senate's office requirements with the hope the upper chamber would agree to space "that provides the best value for taxpayers' money."

The Senate needs to find space soon so it can be ready for 2018 when the Centre Block is closed for badly needed renovations, displacing both the Senate and the House of Commons for almost a decade.

There are 27 Senate offices currently without a new temporary home. They also need room for services like mail and security. In all, the Senate needs about 4,000 square metres of space, about two-thirds the size of a CFL football field.

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