Current and Future Use of Federal Office Space
25 September 2025
Karen Hogan, Fellow Chartered Professional AccountantFCPA
Auditor General of Canada
Mr. Chair, thank you for this opportunity to discuss our report on the current and future use of federal office space, which was tabled in the House of Commons on June 10. I would like to acknowledge that this hearing is taking place on the traditional unceded territory of the Algonquin Anishinaabe people. Joining me today are Markirit Armutlu, the principal who was responsible for the audit, and Nicolas Blouin, who led the audit team.
Our audit looked at the federal government’s efforts to rightsize its office space to minimize costs and free up underused properties for potential conversion into affordable housing. In 2017, Public Services and Procurement Canada, or PSPC estimated that half of the government’s office space was underused, and in 2019–20, the department started making plans for a 50% reduction by 2034. However, at the time of our audit, PSPC projected it would only be able to reduce the government’s office space by 33% in that time frame.
The department estimated that reducing the federal office portfolio would generate savings of about $3.9 billion over the next 10 years. We found, however, that PSPC had made little progress in reducing office space. Efforts to rightsize the portfolio achieved less than a 2% reduction from 2019 to 2024, mainly because of a lack of funding and the reluctance of some departments to reduce their footprint.
We also found that PSPC lacked up-to-date, standardized, and reliable information from federal tenants on the daily use of office space. Using information from all of its tenants would better enable the department to adjust its plans and maximize opportunities for further reductions.
We found that the Treasury Board of Canada Secretariat’s ability to lead and support departments and agencies in managing real property decreased significantly with the dissolution in 2024 of the Centre of Expertise for Real Property. The centre had been set up in 2021 to support the government in the management of its real property portfolio.
The Canada Mortgage and Housing Corporation, or CMHC, supported by Housing, Infrastructure and Communities Canada, is mandated to transform surplus federal office properties into affordable housing through the Federal Lands Initiative. The audit found that while CMHC was on track to meet the initiative’s 2027–28 target to secure commitments to build 4,000 new housing units, the target was based only on commitments, and that only about 49% of units would be ready for occupancy by 2027–28.
Furthermore, we found that the criterion for affordability used by CMHC for the Federal Lands Initiative was not based on household income. That meant that renters in the lowest-income ranges, whose affordable-housing needs were the greatest, did not fully benefit from the initiative.
Public Services and Procurement Canada and federal tenants need to accelerate their efforts to contribute to increasing stock for housing that is sustainable, accessible, and affordable.
Mr. Chair, this concludes my opening statement. We would be pleased to answer any questions the committee may have. Thank you.