OTTAWA \u2014 Ottawa real estate watchers are calling on the federal government to be more clear about its workspace needs as public servants prepare to spend more time in the office.<\/p>\n
Landlords and office brokers want to know whether the federal government is going to need more space to accommodate ramped-up return-to-office plans after years of stated plans to consolidate its office footprint.<\/p>\n
\u201cTo speak very frankly, if there\u2019s a plan, no one knows what it is,\u201d said Shawn Hamilton, principal at Proveras Commercial Realty.<\/p>\n
The federal government made a splash in the downtown Ottawa office market last month with the purchase of a 14-storey building at 131 Queen St., two blocks south of Parliament Hill.<\/p>\n
Morguard Corp., the seller, pegged the value of the transaction at $148.2 million in a press release. The deal is expected to close at the end of August.<\/p>\n
The property in question has been home to House of Commons staff since it was built two decades ago, but a spokeswoman for Public Services and Procurement Canada \u2014 steward of the federal office portfolio \u2014 said the acquisition was about \u201cprudent financial management.\u201d<\/p>\n
\u201cBy transitioning from tenant to owner, PSPC is expected to realize long-term savings for the Crown,\u201d department spokeswoman Mich\u00e8le LaRose said in an email to The Canadian Press.<\/p>\n
Treasury Board officials announced last month that executives in the public service will be required to attend the office full-time starting in May, and the rest of the public service must be in the office at least four days a week starting in July.<\/p>\n
\u201cPSPC is reviewing office space requirements following the recent announcement of increased on-site presence for executives and employees. This analysis will help inform our long-term strategy for office space, including within the downtown core,\u201d LaRose said in her email.<\/p>\n
Mitch Strohminger, director of market analytics for Eastern Canada at CoStar Group, said it\u2019s possible the feds wanted to buy a building they already occupy to give them flexibility to open up the space to desk-sharing, or to make other changes to accommodate more in-person work.<\/p>\n
As public servants\u2019 in-office requirements are set to increase, it\u2019s not clear to observers whether there will be enough office space to accommodate the extra bodies in the workplace.<\/p>\n
\u201cI think a lot of people in Ottawa in the brokerage community and a lot of real estate professionals within the city that I talked to have kind of been asking that same question,\u201d said Strohminger.<\/p>\n
Federal public service unions and workers have warned there isn\u2019t enough office space to support the federal government\u2019s new mandate.<\/p>\n
The Public Service Alliance of Canada has said there is already a shortage of federal office space and warns \u201cthe chaos will only get worse\u201d as workers\u2019 in-office time increases.<\/p>\n
The acquisition of 131 Queen St. comes after the federal government spent years promising to off-load office space.<\/p>\n
In the 2024 budget, the government said it would cut its office portfolio in half over 10 years through sales or leases. The document said PSPC had more than six million square metres of office space across the country and about half of it was underused or vacant.<\/p>\n
A 2025 ministerial transition binder prepared for Minister of Government Transformation, Public Works and Procurement Jo\u00ebl Lightbound said \u201crecent developments\u201d have undermined the government\u2019s goal of off-loading half of its office portfolio by 2034.<\/p>\n
In the document, the government said it was projecting it would get rid of about one-third of its office space over the 10-year period.<\/p>\n
The document said the original plan has been affected by the growth in the number of employees who need office space, new rules on the transfer of surplus assets, and the updated directive that sets out how many days public servants must be in the office.<\/p>\n
PSPC said in February that \u201cgiven the increase of on-site presence for employees, the reduction target will be adjusted accordingly\u201d and that \u201cplanning in this regard is underway.\u201d<\/p>\n
That strikes Hamilton as a bit backwards.<\/p>\n
\u201cI would have suggested that, to be strategic, the federal government should have done their mathematical equations first, leased space, and then made the announcement, but they\u2019ve chosen to do it the other way,\u201d he said.<\/p>\n
The federal government has indeed exited a number of buildings in Ottawa\u2019s downtown core over recent years, Hamilton said. He estimated the feds have given up a million square feet of space leased from the private sector over the past five years.<\/p>\n
Large blocks of office space are still available in the downtown core if the federal government needs it, Hamilton said, though many of the top-line, class-A office buildings are facing tight vacancy rates.<\/p>\n
He said landlords are waiting for a clear signal from the feds about how much space the government will need.<\/p>\n
\u201cNow is the time for the federal government to provide some sort of calm and clarity on their back-to-the-office strategy,\u201d Hamilton said.<\/p>\n
Strohminger said one factor that could limit the surge in demand for federal office space is the Liberal government\u2019s plan to shrink the size of the public service.<\/p>\n
The government plans to cut the number of public service jobs by about 40,000 from a peak of 368,000 in 2023-24. Treasury Board data shows that as of March 2025, there were 357,965 federal public servants. Of those, 153,979 lived in the National Capital Region.<\/p>\n
\u201cYou might see a stabilization in demand from the government because you have these two countervailing trends,\u201d Strohminger said.<\/p>\n
Hamilton said the federal government is important to Ottawa\u2019s downtown office market, not just as a tenant and landlord but as a bellwether to other businesses in the core.<\/p>\n
Ottawa has lagged behind other major North American markets on rates of in-office work, Hamilton said. While the big Canadian banks led the charge on the post-pandemic return to in-person work in Toronto, he blamed the federal government\u2019s tepid approach for the slower pickup in Ottawa.<\/p>\n
Hamilton said he expects other employers in the nation\u2019s capital will follow the federal government\u2019s lead by making in-office work the standard, rather than the exception.<\/p>\n
\u201cThe federal government sets the tone for a lot of the work culture in Ottawa,\u201d he said.<\/p>\n
This report by The Canadian Press was first published March 6, 2026.<\/p>\n
Craig Lord and Catherine Morrison, The Canadian Press<\/p>\n","protected":false},"excerpt":{"rendered":"OTTAWA \u2014 Ottawa real estate watchers are calling on the federal government to be more clear about its…\n","protected":false},"author":2,"featured_media":518095,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[194295],"tags":[49,48,20739],"class_list":["post-518094","post","type-post","status-publish","format-standard","has-post-thumbnail","category-ottawa","tag-ca","tag-canada","tag-ottawa"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/518094","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=518094"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/518094\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/518095"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=518094"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=518094"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=518094"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}