By Craig Lord and Catherine Morrison
Landlords and workplace brokers wish to know whether or not the federal authorities goes to wish extra space to accommodate ramped-up return-to-office plans after years of acknowledged plans to consolidate its workplace footprint.
“To talk very frankly, if there’s a plan, nobody is aware of what it’s,” mentioned Shawn Hamilton, principal at Proveras Business Realty.
The federal authorities made a splash within the downtown Ottawa workplace market final month with the acquisition of a 14-storey constructing at 131 Queen St., two blocks south of Parliament Hill.
Morguard Corp., the vendor, pegged the worth of the transaction at $148.2 million in a press launch. The deal is anticipated to shut on the finish of August.
The property in query has been dwelling to Home of Commons workers because it was constructed twenty years in the past, however a spokeswoman for Public Providers and Procurement Canada — steward of the federal workplace portfolio — mentioned the acquisition was about “prudent monetary administration.”
“By transitioning from tenant to proprietor, PSPC is anticipated to comprehend long-term financial savings for the Crown,” division spokeswoman Michèle LaRose mentioned in an e-mail to The Canadian Press.
Treasury Board officers introduced final month that executives within the public service shall be required to attend the workplace full-time beginning in Might, and the remainder of the general public service should be within the workplace no less than 4 days per week beginning in July.
“PSPC is reviewing workplace area necessities following the latest announcement of elevated on-site presence for executives and workers. This evaluation will assist inform our long-term technique for workplace area, together with throughout the downtown core,” LaRose mentioned in her e-mail.
Mitch Strohminger, director of market analytics for Japanese Canada at CoStar Group, mentioned it’s potential the feds wished to purchase a constructing they already occupy to offer them flexibility to open up the area to desk-sharing, or to make different modifications to accommodate extra in-person work.
As public servants’ in-office necessities are set to extend, it’s not clear to observers whether or not there shall be sufficient workplace area to accommodate the additional our bodies within the office.
“I feel lots of people in Ottawa within the brokerage neighborhood and lots of actual property professionals throughout the metropolis that I talked to have type of been asking that very same query,” mentioned Strohminger.
Federal public service unions and employees have warned there isn’t sufficient workplace area to help the federal authorities’s new mandate.
The Public Service Alliance of Canada has mentioned there may be already a scarcity of federal workplace area and warns “the chaos will solely worsen” as employees’ in-office time will increase.
The acquisition of 131 Queen St. comes after the federal authorities spent years promising to off-load workplace area.
Within the 2024 finances, the federal government mentioned it could minimize its workplace portfolio in half over 10 years by gross sales or leases. The doc mentioned PSPC had greater than six million sq. metres of workplace area throughout the nation and about half of it was underused or vacant.
A 2025 ministerial transition binder ready for Minister of Authorities Transformation, Public Works and Procurement Joël Lightbound mentioned “latest developments” have undermined the federal government’s purpose of off-loading half of its workplace portfolio by 2034.
Within the doc, the federal government mentioned it was projecting it could eliminate about one-third of its workplace area over the 10-year interval.
The doc mentioned the unique plan has been affected by the expansion within the variety of workers who want workplace area, new guidelines on the switch of surplus property, and the up to date directive that units out what number of days public servants should be within the workplace.
PSPC mentioned in February that “given the rise of on-site presence for workers, the discount goal shall be adjusted accordingly” and that “planning on this regard is underway.”
That strikes Hamilton as a bit backwards.
“I might have recommended that, to be strategic, the federal authorities ought to have performed their mathematical equations first, leased area, after which made the announcement, however they’ve chosen to do it the opposite manner,” he mentioned.
The federal authorities has certainly exited a variety of buildings in Ottawa’s downtown core over latest years, Hamilton mentioned. He estimated the feds have given up one million sq. toes of area leased from the personal sector over the previous 5 years.
Massive blocks of workplace area are nonetheless out there within the downtown core if the federal authorities wants it, Hamilton mentioned, although lots of the top-line, class-A workplace buildings are going through tight emptiness charges.
He mentioned landlords are ready for a transparent sign from the feds about how a lot area the federal government will want.
“Now’s the time for the federal authorities to offer some kind of calm and readability on their back-to-the-office technique,” Hamilton mentioned.
Strohminger mentioned one issue that would restrict the surge in demand for federal workplace area is the Liberal authorities’s plan to shrink the dimensions of the general public service.
The federal government plans to chop the variety of public service jobs by about 40,000 from a peak of 368,000 in 2023-24. Treasury Board knowledge exhibits that as of March 2025, there have been 357,965 federal public servants. Of these, 153,979 lived within the Nationwide Capital Area.
“You may see a stabilization in demand from the federal government as a result of you’ve these two countervailing tendencies,” Strohminger mentioned.
Hamilton mentioned the federal authorities is vital to Ottawa’s downtown workplace market, not simply as a tenant and landlord however as a bellwether to different companies within the core.
Ottawa has lagged behind different main North American markets on charges of in-office work, Hamilton mentioned. Whereas the massive Canadian banks led the cost on the post-pandemic return to in-person work in Toronto, he blamed the federal authorities’s tepid strategy for the slower pickup in Ottawa.
Hamilton mentioned he expects different employers within the nation’s capital will observe the federal authorities’s lead by making in-office work the usual, slightly than the exception.
“The federal authorities units the tone for lots of the work tradition in Ottawa,” he mentioned.
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Final modified: March 6, 2026
