It sounded like a good deal at the time. The owner of a huge 68,000-square metre office complex in Ottawa, occupied by Nortel, approached the government offering to sell. Nortel was planning to move out, as part of its downsizing. The building's primary owner, Power Financial Corporation, was looking for a buyer.

The government decided it would be a great location for the Canadian Food Inspection Agency and Agriculture and Agri-Food Canada to set up headquarters for some 3,000 employees. In March, 2003, Ottawa bought the seven-tower complex for $91 million. A good price for a building of that size, but, critics say, not a good deal for taxpayers in the long run.

"Why buy a building you're not ready to move into and why buy a building that, even when you are, it's going to require a lot of cash up front?" asks John Williamson of the Canadian Taxpayers Federation.

The government is now in the midst of spending $82 million to renovate the Skyline Complex -- almost as much as it cost to buy.

Major renovations are required to convert the buildings to meet government standards. For example:

• Office cubicles have to be made smaller
• Former computer labs must be gutted
• The entire complex is being transformed -- from an open concept, high tech space to functional government offices.

"Of course when you get involved in these kinds of projects there's all kinds of costs," says Claude Seguin, Director of Real Estate Services for Public Works and Government Services Canada.

Soon after Nortel moved out, Public Works was confronted with the first major headache. Water infiltration -- and mould, called Stachybotrys -- in the oldest part of the complex. A contractor found the black, toxic substance, and took the initiative to get it tested. A few months later, a severe rainstorm caused flooding, and Public Works discovered more mould.

Numerous tests were done, and the mould was cleaned up. The government then spent $250,000 caulking the windows, which may or may not fix the water infiltration problem for good. Air quality tests done since found no harmful mould spores in the ventilation system. Health Canada is insisting on regular air testing.

"The most important part is that we do run air quality tests on our facilities to address this matter," said Seguin. "The problem in buildings is you have to do regular maintenance and we are fixing (problems) as they come up."

Government documents obtained by CTV show Public Works and Government Services was warned about a possible mould problem before it bought the complex. In February, 2003, consultants reported flooding, water damage and trace amounts of Stachybotrys. It's a type of mould, which, left unchecked, grows and releases toxic spores into the air, causing respiratory illnesses.

CTV's Whistleblower asked two prominent Ottawa commercial real estate consultants if taxpayers got a good deal overall, from purchasing the Skyline complex. They agreed to comment without their names being used, because they do business with government. They both insisted a new complex could have been built cheaper and faster. Plus, they pointed out, it could have been custom-built to meet government specifications -- and taxpayers would own a new facility instead of an aging one.

The Canadian Taxpayers Federation thinks taxpayers got a raw deal, from a real estate purchase with political undertones.

"I think there was a bit of a sweetheart deal here and it's the taxpayers who are paying the price," says Williamson.

The parent company of the firm which sold the complex to government is deeply connected to the Liberal Party of Canada. The president of Power Corporation, Andre Desmarais, is married to Jean Chretien's daughter. The government was likely the only buyer it could find, partly because the tech industry crash caused a glut in Ottawa's commercial real estate market.

"You have a process which doesn't involve a tender and then you have a seller who comes forward that has connections, deep connections, to the governing party," said Williamson, "I think that raises all kinds of red flags."

The deal flies in the face of what the current Minister of Public Works often says -- that taxpayers should get out of the business of owning and managing older buildings.

CTV Whistleblower asked the Minister of Public Works Scott Brison: "When your department bought the building it had mould, why would you do that?" Brison answered: "The fact is we buy buildings on an ongoing basis and we evaluate them in terms of best possible value for the taxpayer."

Williamson is skeptical. "The price always seems to go well beyond what was budgeted initially and I suspect the same thing may happen here."

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