Federal government aiming to dispose of half of its office buildings with hybrid work here to stay

The federal government is planning to offload up to half of its office buildings across the country, citing the rise in remote and hybrid work.

Deputy Minister of Public Services and Procurement (PSPC) Paul Thompson made the comment at the Standing Committee on Government Operations and Estimates Monday.

"We see an opportunity for a fairly significant reduction in the coming years of the office space," he said.

"Our previous target was to reduce the portfolio by 40 per cent. We now think we can reduce it closer to 50 per cent as a target."

Thompson said the government has been looking at reducing its office footprint since before the COVID-19 pandemic, and the hybrid work model has reinforced those plans.

"There were opportunities even before the pandemic because we weren't using it optimally. Now, add on to that the hybrid work model, we see a significant opportunity to consolidate office space and at the same time pursue greening, accessibility … and have a smaller footprint but more built for purpose. That project is continuing, with every department specifying its future needs."

PSPC said in a statement to CTV News Ottawa it is still early in the process.

"The disposal process for federal properties includes a number of steps and due diligence activities, as well as soliciting expressions of public purpose interest from federal departments, agent Crown corporations, provinces, municipalities, and Indigenous groups. This process can take several years," the statement says.

Earlier this month, PSPC said it was developing a long-term real estate portfolio plan to "optimize" its office space, lower operating costs and reducing greenhouse gas emissions. Ten buildings in the national capital region are already on the list for disposal through a sale or transfer. 

It's unclear how many more buildings in Ottawa and Gatineau, beyond the 10 already specified, that the government would offload or what the timeline would be for the sale or transfer of those buildings. The federal government has a significant footprint in the national capital region, with more than 2,000 properties, though not all of them are office buildings.

According to PSPC statistics, it is the custodian of approximately 6.2 million sq. m. of office space, of which more than half is in the national capital region. PSPC has the second-largest real estate portfolio in the federal government, by floor space, behind National Defence.

Ottawa Centre Liberal MP Yasir Naqvi told CTV News Ottawa in a statement that he's pleased to see the government reassess its office space needs.

"This provides ample opportunity within the national capital region to redesign these properties and convert them into affordable and social housing, as well as for community, creative and commercial use," he said. "I look forward to working with Indigenous, non-profit and business partners in leveraging these buildings as we work to revitalize downtown, address chronic homelessness, and bring more people to work, live and visit downtown Ottawa."

MAJOR CHANGES TO DOWNTOWN OTTAWA

Federal public servants are back in the office two or three days a week, after more than two years of working from home because of the COVID-19 pandemic. But the demand for keeping work remote where possible is strong. Last month, tens of thousands of federal public workers went on strike, with remote work being one of the main sticking points.

President and CEO of the Ottawa Board of Trade Sueling Ching says she hopes the city's largest employer will think carefully about its plans for downtown buildings.

"We really encourage the government to be thoughtful of the communities in which they are an anchor employer, like Ottawa, what the economic impact will be for us, and to help be part of the revitalization of the downtown," she said.

Ching says she wants businesses and the community to be part of the discussions.

"Over the last three years, we have been asking for greater transparency on what those plans are because it is critically important to our downtown and to all the residents of Ottawa and our region," she said. "We know that the downtown core is vital to our economic and cultural success, so any plans the government has on executing their own services and workforce are going to impact us as well."

The departure of federal government workers from downtown Ottawa has had a significant effect on the city. Business owners have repeatedly commented on the decline in foot traffic and regular customers, and city staff have noted changes to transit ridership. There have been numerous efforts to encourage the federal government to bring its office workers back downtown since pandemic restrictions were lifted.

Kevin McHale, the executive director of the Sparks Street BIA, says the downtown core is changing.

"I don't think we are in crisis, but I think we are in flux," he said. "And that is where the conundrum lies; the people that hold the levers on this type of stuff have to make decisions, stick with them, and move as quickly as they can."

He wants to know how quickly the federal government can get rid of buildings, so that others can use them. He agrees that affordable housing is a great solution and would bring a business boom to area, but there are other options, too.

"We want to see new, inventive businesses. We would love to see campuses for the high tech of Kanata North open up, maybe it is innovative centres down here," he said. "Maybe a bigger footprint from the colleges and universities down here, whether it be classroom or residence. When you have a lot of space there is opportunity. We just don’t want to see indecisiveness cause it to all bog down until we are at a crisis and it costs even more money."

--With files from CTV News Ottawa's Leah Larocque.