Montreal

Sale of Quebec government buildings cost millions, lacked 'basic prudence,' auditor general says

Quebec's auditor general is blasting the provincial agency tasked with handling government-owned properties for striking a losing deal when it sold three buildings in exchange for long-term leases.

Provincial Crown corporation lost $59.6M, provided misinformation, report says

Quebec Auditor General Guylaine Leclerc's office released the report on Thursday. (Jacques Boissinot/The Canadian Press)

Quebec's auditor general is blasting the provincial Crown corporation tasked with handling government-owned properties for striking a losing deal when it sold three buildings in exchange for long-term leases.

"Basic prudence and sound management rules that should guide such significant transactions were not followed," Guylaine Leclerc's office said in a scathing report released Thursday. 

The J.-A.-Tardiff and Place Québec buildings in Quebec City and 500 Boul. René-Lévesque W. in Montreal were sold in 2007-2008 for $41 million.

The report said the Société immobilière du Québec (SIQ) — since 2013, the Société québécoise des infrastructures — made concessions in the sale that cost the government a total of $59.6 million.

It's certain now. Everyone knows  Quebecers  were robbed to the bone.- Agnès   Maltais , Parti   Québécois

The audit was spurred by a 2016 report from Radio-Canada's investigative program Enquête, which found that Quebec Liberal Party fundraisers allegedly pocketed large sums of money through the real estate transactions.

According to Thursday's report, the corporation had agreed to lease the properties long term so government employees could continue to use them, and pay for any future major repairs.

"The SIQ did not adequately consider the long-term financial impact of becoming a lessee rather than remaining the owner of the buildings," the report said.

Three years prior to the sale, the corporation's board of directors had been presented with an internal analysis concluding that a sale of two of the buildings would have a negative impact, it said.
The J-A Tardif building on Grande-Allée Street in Quebec City was one of the buildings subject to a government audit. (Radio-Canada)

Several former members of the SIQ board told the auditor general's investigators that the decision to sell the buildings "came from the government." But no formal directive or decree was issued.

In a statement, the SIQ said Thursday it was "determined to recover the money in question."

"A team of lawyers is already working to proceed with a civil recourse at the right moment," the SIQ said.​

'Cost taxpayers a fortune'

The opposition in Quebec City pounced on the findings Thursday. Agnès Maltais, a Parti Québécois MNA, said the report shows the deals "cost taxpayers a fortune."

"It's certain now. Everyone knows Quebecers were robbed to the bone," she said Thursday. 

Premier Philippe Couillard, for his part, pointed out the sales took place a decade ago, before he was in power. 

"We have certainly condemned, and will do again several times, condemned those acts without compromise," he said, adding that Quebec's anti-corruption unit, UPAC, is investigating.

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