Doug Ford wants federal workers back in the office. What happens if they don’t return?

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When Premier Doug Ford visited Ottawa in March doling out money to the capital, one of the largest cheers he got was when he threw down a gauntlet to the federal government.

“As the largest employer in the city, the federal government needs to do its part to help rebuild the city’s economy,” Ford told a gathering of approximately 600 business and community leaders at the mayor’s breakfast.

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“I know a lot of people love working at home, but we need the federal government to get their workers back in the office,” Ford said, to sustained applause. “Hopefully the prime minister will call people back to work.”

Later, Ford elaborated to reporters.

“These restaurants are hurting. The shops are hurting. Ridership on the transit is hurting. I think that’s a normal request. You get hired. Come to work.”

Since Confederation, the federal government has been Ottawa’s recession-proof lifeline, protecting the city during economic downturns that have hollowed out other downtowns. But what happens if federal workers don’t go back to the office?

It’s a question on River Ward Coun. Riley Brockington’s mind, too, especially if the next federal election brings the Conservatives to power with a cost-cutting, small-government agenda.

“I’m very concerned about our city,” Brockington told the city’s finance and corporate services committee. “I’m very concerned about what’s happening downtown. I’m concerned, if a new government comes in, knowing their philosophy about Ottawa and their need to spread service across all across Canada, but also to reduce the public service.

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“We can’t discount the importance and the impact that the federal government has on the City of Ottawa,” Brockington said.

In an interview with this newspaper, Brockington said there was never a greater need to diversify Ottawa’s economy.

“High tech, health services, post-secondary — they’re all on fire, which is great to see. But I think the federal government is going through a major evolution, not just with work from home, but, if there is a change in government, there may be a desire to reduce the level of public service, but also, potentially, spread out where those jobs are located,” he said.

“That’s a significant concern for me because that will impact our economy. It’s not a good thing.”

Those worries are real, says Ian Lee, an associate professor at the Sprott School of Business at Carleton University.

“Those who are saying, we’re just going to hang tight until the government goes back to work and the downtown recovers are dreaming,” Lee said. “This is a permanent shift. The idea that somehow a government — whether it’s Liberal or Conservative — can just phone up the head of the Treasury Board and say, ‘Get them all back to work!’ That’s extraordinarily naive. These are huge shifts in the macro labour market, across Canada and across the U.S.”

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Most workers, federal or otherwise, seem to like working from home, Lee said. He estimates the average worker saves between $800 and $1,000 a month working from home when factoring in items such as the cost of gas and parking, meals out and the time lost to commuting.

“From a personal point of view, work from home is very, very popular.”

Opinion is more mixed from the employer’s point of view. Some, like Shopify, have embraced it almost completely, moving to a permanent work-from-home model during the pandemic. Other employers see downsides in productivity, oversight and team-building. But for the 40 to 45 per cent of the workforce considered to be “knowledge workers,” going into the office daily is no longer necessary.

“I’m not saying that everyone is going to be working from home, but anyone who thinks we’re going to go back to the status quo of what it was like before the pandemic, those days are gone,” Lee said. “They’re gone like home delivery of milk, Blockbuster Video and the typewriter. What we’re experiencing is disruptive innovation.”

That process is already underway under the Liberals government, which is disposing of 10 properties in Ottawa-Gatineau, among them the Jackson Building at Bank and Slater streets, the Charles Tupper Building on Riverside Drive and the Graham Spry Building in Westboro, currently in use as an emergency shelter. And it’s looking at shedding more.

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“Since 2022, Public Services and Procurement Canada has been actively working to streamline and accelerate the disposal process,” PSPC said in an email, saying it hoped to speed the average “time to market” to five years from the current nine years.

PSPC has set up a dedicated “disposals sector … to further improve on the work to streamline and accelerate the disposal process … (leading to an) increased supply of assets that can be (re)developed for housing or other community needs.”

While more housing would be welcome, “I’m not convinced that every building, with a snap of your fingers, can be converted to residential,” Brockington said.

And, even if that happens, it would mean a loss of revenue for the city. The payment in lieu of taxes the city receives from federal properties (one level of government cannot tax another) and property taxes from downtown business and office space are both higher than taxes on residential properties.

“I wouldn’t be as concerned if the federal government was more transparent about their medium- and long-term plans,” Brockington said. “The federal government should be very cognizant that the City of Ottawa is unique. It is the capital … and, when you make a decision to endorse a hybrid working model and your public transit drops 40 per cent and has not even close to recovered, there are significant ramifications. And they don’t acknowledge that. That concerns me.”

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Brockington says the city needs to do a better job at selling its highly educated workforce to other companies to help diversify the economy.

Mayor Mark Sutcliffe says the absence of public servants downtown and the sell-off of federal properties is having a “huge impact” on the city.

“I respect the right of public servants to work from wherever they choose and whatever they negotiate with the federal government. That’s not my issue,” Sutcliffe said. “But there is an impact on downtown Ottawa and I’m concerned about that.”

The city needs to encourage more people to live downtown and to find other businesses or attractions that will bring people into the core, he said. “And we need to work with the federal government on this. We need their help,” he said.

“If this were a large private sector employer in another city that was making decisions about its workforce that was adversely affecting the local economy, I think the hope would be that they would work hand in hand to mitigate those impacts,” Sutcliffe said.

Lee looks to other North American cities that have had to rebuild after a major employer left — a city like Pittsburgh, for example, which was decimated by the collapse of the U.S. steel industry.

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“If you accept that this is permanent and the Government of Canada is not coming back as the anchor tenant, that means the city has to find a new anchor tenant,” he said.

“It’s like Pittsburgh waking up back in the 70s and realizing that steel was dying. It was a steel town, but now you can’t see any steel in downtown Pittsburgh. You can’t see a chemical industry in Cleveland. They’ve completely reinvented themselves.”

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