Ottawa, 10 June 2025—A report from Auditor General Karen Hogan tabled today in the House of Commons concludes that the federal government has made limited progress in its multi‑year effort to reduce its office space portfolio to minimize costs and free up underused properties that could be repurposed for housing. In 2017, Public Services and Procurement Canada estimated that half of the federal government’s office space was either vacant or underused. A well‑managed federal office space portfolio is cost‑effective and not only supports hybrid work but also boosts the supply of sustainable, accessible, and affordable housing for low‑income families.
The audit found that Public Services and Procurement Canada’s efforts to right size federal office space achieved less than a 2% reduction from 2019 to 2024, mainly because of a lack of funding. In 2024, the department estimated that it could save $3.9 billion over the next decade by disposing of vacant or underused office space.
The Canada Mortgage and Housing Corporation (CMHC), supported by Housing, Infrastructure and Communities Canada, intends to transform properties into affordable housing through the Federal Lands Initiative. The audit found that CMHC was on track to meet the initiative’s 2027–28 target to secure commitments to build 4,000 new housing units. This target is based only on commitments; the audit found that only 49% will be ready for occupancy by 2027–28.
In addition, the audit found that 39% of the projects supported by the initiative will not serve Canadians in locations where core housing needs are the greatest. The initiative’s affordability requirement was not designed to maximize access to housing that would be affordable for the lowest-income households.
“The federal government has been slow to reduce office space and cut costs to support hybrid work, and to convert surplus properties into affordable housing,” Ms. Hogan said. “Public Services and Procurement Canada and federal tenants need to accelerate their efforts to reduce the office space they occupy and contribute to increasing stock for housing that is sustainable, accessible, and affordable.”