OTTAWA – The plan by Public Services and Procurement Canada (PSPC) to offload or lease surplus office space has encountered significant obstacles, primarily stemming from the government's initiative to increase the number of days public servants are required to work in the office. A ministerial transition binder prepared for Minister of Government Transformation, Public Works and Procurement, Joël Lightbound, indicates that “recent developments” have undermined the objective of reducing half of the federal office portfolio by the year 2034.
The 2024 federal budget projected that reducing the federal office footprint would yield considerable savings, estimated at $3.9 billion over the next decade, followed by $0.9 billion annually thereafter. However, the government is now forecasting a reduction of approximately 33 percent of its office space over this 10-year period. The associated operations and maintenance savings are anticipated to reach around $2.45 billion in the first decade.
The challenges outlined in the briefing binder include a rise in the number of employees necessitating office space, new regulations concerning the transfer of surplus assets, and recent directives mandating increased in-office attendance for public servants. Currently, federal employees are obligated to work in the office at least three days a week, while executives must be present four days a week. Prior to September 2023, the expectation was set at two to three days per week in-office attendance.
According to Michèle LaRose, a spokesperson for PSPC, a preliminary analysis was conducted to assess office space requirements based on an estimated 290,000 full-time employees working an average of three days weekly. Following the 2024 budget release, PSPC revised its evaluation to accommodate the new workplace presence requirements and an updated employee count of 306,000.
LaRose noted that this revised analysis confirmed that alterations in hybrid work policies and growth in the public service directly influence the demand for office space. Despite the ambitious goal of achieving a 50 percent reduction in federal office space, PSPC continues to explore innovative strategies and collaborations across government to meet this target.
Efforts to reach the reduction goal include initiatives such as having multiple federal departments and agencies share office space, reviewing existing space allocation and funding models to optimize office use, and accelerating the disposal of surplus assets. A report by Auditor General Karen Hogan, published in June 2023, pointed out that the federal government has made slow progress in downsizing its office space, despite having plans in place since 2019.
Hogan highlighted that PSPC's strategy for reducing office space relies on the cooperation of larger departments, some of which have shown reluctance to decrease their footprints. Moreover, delaying the disposal of unsuitable properties could result in increased maintenance and operational expenses. During a House of Commons committee meeting, Hogan emphasized the necessity for PSPC and federal tenants to expedite efforts to contribute to the creation of sustainable, accessible, and affordable housing.
The briefing binder emphasizes the importance of securing collaboration across the public service to achieve the stated reduction targets. Furthermore, it indicates that changes in future government priorities—such as amendments to remote working policies or the introduction of new programs—could further impact PSPC's ability to meet its objectives.
In parallel developments, Ontario Premier Doug Ford recently declared that thousands of Ontario civil servants would be mandated to return to the office full-time by January 2026, suggesting that the federal government and municipalities across Ontario should consider similar measures. However, neither the federal government nor the unions representing its workforce have signaled that such a move will occur in the near future.
Alain Belle-Isle, a spokesperson for the Treasury Board of Canada Secretariat, affirmed last month that the direction regarding employees' workplace presence remains unchanged. He did not provide clarification on whether discussions about modifying this policy are ongoing. This situation highlights the ongoing challenges faced by the government in balancing office space reduction with the necessity of maintaining an adequate workforce presence in federal buildings.
