Public Services and Procurement Canada (PSPC) has faced obstacles in its efforts to sell or lease surplus office space due to the government’s mandate for increased in-office workdays for public servants. A transition binder for Minister of Government Transformation, Public Works and Procurement Joël Lightbound highlighted challenges in the plan to reduce half of its office portfolio by 2034.
The federal budget in April 2024 projected significant savings of $3.9 billion over the next decade and $900 million annually thereafter by downsizing the federal office footprint. However, the government now anticipates disposing of about one-third of its office space over the ten-year period, with projected savings of approximately $2.45 billion in operations and maintenance costs during the initial decade.
Factors impacting the original plan include the rise in employees needing office space, updated rules on surplus asset transfers, and revised directives on in-office presence for public servants. Presently, federal employees are mandated to spend a minimum of three days per week in the office, with executives required to be physically present four days weekly, as opposed to the previous requirement of two to three days before September 2024.
PSPC spokesperson Michele LaRose mentioned that the department conducted an initial assessment based on 290,000 full-time employees spending an average of three days per week in the office. Following the budget release, the review was updated to reflect increased workplace presence requirements and a revised employee count of 306,000, demonstrating the direct impact of evolving hybrid work policies and public service growth on office space needs.
While the original objective of a 50% reduction in federal office space remains challenging, PSPC continues to explore innovative strategies to achieve this goal. Efforts involve facilitating multiple federal departments and agencies to share office space, optimizing space allocation and funding models, and expediting surplus asset disposal.
Auditor General Karen Hogan’s report highlighted the government’s slow progress in downsizing office space despite plans dating back to 2019. Larger departments’ reluctance to reduce their footprints has been a hindrance, potentially leading to increased maintenance and operating costs by delaying unsuitable property disposals.
Hogan emphasized the need for PSPC and federal tenants to accelerate efforts in creating sustainable, accessible, and affordable housing stock. Securing broad support across the public service is deemed vital to meeting reduction targets, with potential challenges posed by changing government priorities affecting PSPC’s target attainment.
Recent directives from Ontario Premier Doug Ford requiring Ontario civil servants to return to the office full-time by January have raised discussions on similar actions at the federal level and among municipalities in Ontario. Despite the City of Ottawa mandating a return to the office five days a week in the new year, the federal government and its unions have not signaled immediate shifts in workplace policies.
The Treasury Board of Canada Secretariat spokesperson, Alain Belle-Isle, indicated that the direction on employees’ workplace presence remains unchanged, without confirming ongoing discussions on policy updates.