Feds cutting 5,000 public service jobs, looking to turn underused buildings into housing

Five thousand public service jobs will be cut over the next four years, while underused federal office buildings, Canada Post properties and the National Defence Medical Centre in Ottawa could be turned into new housing units, as the federal government looks to find billions of dollars in savings and boost the country's housing portfolio.

The federal government's 2024 budget outlines several initiatives for "responsible government spending" and turning federal properties into homes in the national capital region and across the country.

The 416-page document also proposes new disconnect rules for workers in federally regulated sectors to limit "work-related communication" outside of scheduled work hours.

CTV News looks at the federal government's plans for the public service and its office portfolio outlined in the budget.

Cuts to the public service

The federal government is looking to eliminate 5,000 public service jobs through attrition over the next four years and requiring departments to cover increased costs within the budgets, as part of the "second phase of refocusing government spending," which looks to save $4.2 billion over four years, starting in 2025-26, and $1.3 billion moving forward.

"Budget 2024 announces the government will seek to achieve savings primarily through natural attrition in the federal public service," the document says.

• Sign up now for daily CTV News Ottawa newsletters
• The information you need to know, sent directly to you: Download the CTV News App

The budget calls for the "public service population" to decline by approximately 5,000 full-time equivalent positions over the next four years, down from 368,000 public service positions as of March 31, 2024. There were 357,274 federal public service employees as of March 31, 2023, according to federal officials.

Federal officials describe the elimination of the positions as a "modest" cut to the public service. There was no specific number mentioned for job cuts in the national capital region.

As part of the spending plans, all federal departments and organizations will be required to cover a portion of their increased operating costs within their existing resources, starting April 1, 2025.

"This measure will not impact the delivery of benefits to Canadians and will be implemented in a way that continues to support regional representation and a diverse public service workforce," the federal budget says. "Going forward, the government will continue to review spending across departments and on key initiatives to ensure the government operates effectively and efficiently for Canadians."

Public Service Alliance of Canada President Chris Aylward tells CTV News he'll be watching the budget implementation bill closely to find out how the cuts will affect his members.

"Any time you cut jobs or announce job losses like this, obviously we're concerned about the services provided to Canadians," he said. "You can't cut jobs without cutting the services. We don't want to see the long lineups at airports and passport offices."

It remains unknown how many of these positions to be eliminated will be in Ottawa and Gatineau.

The Canadian Centre for Policy Alternatives warns the job cuts may impact services.

"I think what's new about this is there's an impact on staffing," David Macdonald, senior economic with the Canadian Centre for Policy Alternatives, said.

"Previously, the promise was no impact on service levels. That's always the promise when you're cutting government jobs – that no one will see the result. Now we're seeing that, oh it will impact staff levels and may well impact service levels as a result."

The 2023 budget and fall economic statement outlined plans to find $15.4 billion in public sector spending reductions by requiring departments and agencies to cut spending by three per cent, but there were no concrete plans on how to achieve it.

In the 2024 budget, the government says the first phase of its "refocusing government spending" identified areas of duplication, low value for money, or "lack of alignment with government priorities."

This year's budget also provides $135 million to Public Services and Procurement Canada and the Treasury Board Secretariat to improve public service human resources and pay systems. The government directs officials to continuing working on a "potential next generation pay solution" to replace the Phoenix Pay System.

Budget 2024: The budget calls for the "public service population" to decline by approximately 5,000 full-time equivalent positions over the next four years, down from 368,000 public service positions as of March 31, 2024. There were 357,274 federal public service employees as of March 31, 2023, according to federal officials.

The right to disconnect at work

The federal government is moving to give federal employees the "right to disconnect from work," outside of their regular work hours.

The budget proposes spending $3.6 million over five years to amend the Canada Labour Code to require employers in federally regulated sectors to establish a right to disconnect policy, "limiting work-related communication outside of scheduled working hours."

"Everyone needs some downtime; it is essential for well-being and mental health," Budget 2024 says.

"As the nature of work in many industries has become increasingly digital, workers are finding it increasingly difficult to disconnect from their devices and inboxes after hours and on weekends."

Up to 500,000 employees in federally regulated industries would fall under the new right to disconnect from work policy.

Turning office buildings into housing

Public Service and Procurement Canada is being directed to reduce its office portfolio by 50 per cent, enabling federal office buildings to potentially be turned into homes in Ottawa and across Canada.

The budget provides $1.1 billion over 10 years, starting in 2024-25, for PSPC to convert underused federal offices into homes, with a focus on student and non-market housing.

"This funding will help accelerate the ending of leases and disposal of underused federal properties, and address deferred maintenance," the budget says.

The government says reducing the federal office footprint will generate "substantial savings," expected to reach $3.9 billion over the next 10 years.

Budget 2024: The government says reducing the federal office footprint will generate "substantial savings," expected to reach $3.9 billion over the next 10 years.

PSPC has over six million sq. m. of office space, with an estimated 50 per cent of the space underused or vacant, according to the government.

In May 2023, the government announced it was disposing of 10 buildings in the national capital region through a sale or transfer. The buildings included the Jackson Building on Bank Street, the Sir Charles Tupper Building on Riverside Drive and L'Esplanade Laurier.

Aylward said this announcement is confusing.

"They're still sticking to their two to three days in the office policy, but yet they're also selling off buildings, so it's a bit confusing situation for us," he said. "I think it's good, but you really have to look at, when they say they're going to start selling off buildings, how many buildings do we really own? How many are leased?"

Building Homes on National Defence Lands

The National Defence Medical Centre in Ottawa could be converted into housing, as part of a plan to divest 14 surplus Department of National Defence Buildings.

The budget says DND will work with Canada Lands Company and other partners to divest the properties that have potential for housing. The properties include:

• The National Defence Medical Centre in Ottawa
• The Amherst Armoury in Amherst, N.S.
• 96 D'Auteuil and 87 St-Louis in Quebec City
• The HMCS Armoury in Windsor, Ont.
• The Brigadier Murphy Armoury in Vernon, B.C.

The National Defence Medical Centre on Alta Vista Drive in Ottawa was a former full-service hospital built to care for military personnel and their families. The hospital officially opened in 1961 and ceased operations in the early 1990s.

As part of the budget, the federal government will provide "additional investments" for the Department of National Defence to build and renovate housing for Canadian Armed Forces personnel on bases across Canada.

The plan would support building 1,400 new homes and renovating 2,500 existing units for members on military bases in Ottawa, Petawawa, Kingston, Borden, Trenton, Valcartier, Gagetown, Esquimalt and Edmonton.

Wateridge Village

Nearly 500 new homes are being "urgently unlocked" at Wateridge Village in Ottawa as part of the federal budget.

The federal government announced plans to create new homes at five federal properties across Canada.

In November, the government announced 307 new homes would be developed at Wateridge Village, along with 600 homes at 299 Carling Avenue and 710 homes on Booth Street.

Wateridge Village is formerly home to Canadian Forces Base Rockcliffe.

Canada Post properties

Canada Post properties in Manotick and Rockland could be available for housing, as the federal government looks to reduce the office footprint of the crown corporation.

The budget says the government will take steps to enable Canada Post to prioritize leasing or divestment of post office properties and lands with "high potential for housing."

Six Canada Post properties assessed for housing development are:

• 1285 rue Notre-Dame Centre, Trois-Rivières, Que.
• 37 rue Saint-Laurent, Beauharnois, Que.
• 4 rue du Centre Commercial, Roxboro, Que.
• 9702 Hardin Street, Fort McMurray, AB.
• 120 Charles Street, North Vancouver, B.C.
• 45 Mary Street, Port Moody, B.C.

The budget also mentions 33 properties that could be unlocked for housing across Canada, including Canada Post buildings in Manotick and Rockland.