Comptroller General of Canada appearance before the Standing Committee on Public Accounts (PACP) – Report 3, Current and Future Use of Federal Office Space – October 2025

Report 3: current and future use of federal office space

During the Auditor General’s (AG) appearance at PACP along with officials from the Canada Mortgage and Housing Corporation (CMHC) and Housing Infrastructure and Communities Canada, MP David McKenzie asked the Auditor General if she was aware of how long efforts had been underway to identify space utilization. MP Gérard Deltell requested examples of departments who were unwilling to reduce space. MP Ned Kuruc expressed interest in how often employees at the OAG, CMHC and Housing Infrastructure and Communities Canada are required to be in the office.

• September 25, 2025, PACP: Meeting 5

During the Auditor General’s briefing at the Standing Committee on Government Operations and Estimates (OGGO), MP Kelly Block focused on Report 3, questioning the dissolution of TBS’s Centre of Expertise for Real Property and its impact on oversight. MP Kelly McCauley asked whether the National Capital Commission was included in the audit and raised concerns about acquiring federal lands while aiming to reduce office space.

• September 23, 2025, OGGO: Meeting 3

ArriveCAN and contracting policies

At the beginning of the 45th Parliament, the Conservative Party of Canada focused considerable time in Question Period and during debate on bills and opposition motions expressing a desire to see the government take steps to have funds paid to GC Strategies reimbursed.

• June 12, 2025, Opposition Motion, June 12, 2025, Committee of the Whole (Main and Supplementary Estimates (A) 2025–26), June 10, 2025, Question Period

During the Auditor General’s appearance before PACP on 2025 Reports 1 to 4 of the Auditor General of Canada, Conservative MPs asked why the government is not following or enforcing the rules and the possibility of contracting issues including companies other than GC Strategies. They also asked about the requirements to check the skills and qualifications of those hired through outsourcing contracts and the need to ensure that confirmation work has been done prior to issuing payment.

• June 19, 2025, PACP: Meeting 2

In the 44th Parliament, Conservative Party of Canada MPs raised concerns about ArriveCAN and federal procurement, including wasteful spending, lack of oversight, and transparency. They questioned the use of external consultants, accountability for contracts awarded to GC Strategies, Dalian, and CORADIX, and TBS’s role in reviewing these contracts. Additional concerns included departmental compliance with the Financial Administration Act, dual roles of public servants as contractors, performance pay for officials involved, and whether funds spent on ArriveCAN could be recovered.

Report 3: Current and future use of federal office space

During OGGO’s briefing with the Auditor General this fall, MP Marie-Hélène Gaudreau expressed concerns to the Auditor General about the lack of clear criteria for determining the number of public servants required to occupy office space and the lack of transparency in the management of federal real property.

• September 23, 2025, OGGO: Meeting 3

ArriveCAN and contracting policies

In June 2025, the Bloc Québécois supported calls for the government to have funds paid to GC Strategies reimbursed, while stating it was unrealistic to think that the funds would be recovered.

• June 12, 2025, Opposition Motion

During the Auditor General’s appearance before PACP on Report 4 - Professional Services Contracts with GC Strategies Inc., MP Sébastien Lemire asked the Auditor General whether an in-depth review should be conducted and if there were enough resources to do a deep dive on the IT contracts being awarded and whether the exemption threshold is too low and abuses of the system.

• June 19, 2025, PACP: Meeting 2

In the 44th Parliament, the Bloc Québécois raised concerns about the cost of ArriveCAN, non-compliance with Treasury Board recommendations, lack of accountability from TBS and accounting officers, and the prevalence of non-competitive contracting. They questioned poor documentation, the “bait and switch” practice, and the Public Health Agency of Canada’s failure to follow best practices – particularly with GC Strategies. Their broader criticism focused on reducing outsourcing, which they argue undermines public service expertise.

Interest in the TBS portfolio

• OAG performance audits
• Integrity of the public service
• Transparency and accountability

Interest in the TBS portfolio

• Gender-Based Analysis Plus and gender and diversity considerations in the Public Accounts
• Environmental, social and governance reporting

Interest in the TBS portfolio

• OAG performance audits
• Government accountability

Interest in the TBS portfolio

• Professional service contracts

Interest in the TBS portfolio

• Professional service contracts
• Government accountability

Interest in the TBS portfolio

• Government spending
• Government use of professional service contracts
• Whistle-blowers / disclosure of wrongdoing in the workplace

Interest in the TBS portfolio

• Professional service contracts and the government’s legal liability

Interest in the TBS portfolio

• Professional service contracts and the government’s legal liability

Interest in the TBS portfolio

• Professional service contracts
• Procurement rules

Interests

• Government spending
• Professional service contracts
• Transparency and accountability

Interests

• OAG performance audits
• Integrity of the public service
• Transparency and accountability

Interests

• OAG performance audits
• Government accountability

Interests

• Professional service contracts

Interests

• Professional service contracts
• Government accountability

Interests

• Gender-Based Analysis Plus and gender and diversity in the Public Accounts
• Environmental, social and governance reporting

Interests

• Professional service contracts
• Procurement rules

Interests

• Professional service contracts and the government’s legal liability

Interests

• Professional service contracts and the government’s legal liability

Overview

The audit found that the Centre of Expertise for Real Property (RP-COE) played an important role in providing leadership and oversight to implement the recommendations of the Horizontal Fixed Asset Review (FAR). The dissolution of the RP-COE in spring 2024 diminished government-wide (TBS) oversight of the management of federal real property and included diminished commitments from custodian departments to complete the implementation of recommendations which had been assigned to them.

TBS management response (as it appears in the Office of the Auditor General report)

Agreed. The Treasury Board of Canada Secretariat (TBS), through the Office of the Comptroller General, supports the overall improvement of the management of federal real property as part of its core mandate. These core activities, which include delivering guidance and training, and supporting interdepartmental governance, provide leadership to the real property community and support the effective management of real property across the government.

TBS’s ability to provide hands-on support to custodians and leadership in implementing the 119 recommendations from the Horizontal Fixed Asset Review (FAR) diminished considerably upon the dissolution of the Centre of Expertise for Real Property, as that had been its mandate.

In 2025–26, TBS will review and prioritize the outstanding FAR recommendations, taking into consideration feedback from the real property community. Following this review, TBS will consider options to address the identified priorities, including exploring funding strategies and identifying what can be delivered with existing resources.

Key messages

We agree with the recommendation and recognize that the RP-COE made positive contributions to the management of real property.

Following the dissolution of the Centre the work it was leading had to be ramped down. However, departments (28 custodians) through their Deputy Heads, continue to be ultimately accountable for managing their real property in a way that supports the mandates of their organizations.

As agreed in the Management Response, efforts are underway to prioritize outstanding recommendations and determine options to what could be prioritized and actioned within existing budgets.

It is important to note that the RP-COE did not replace the core functions that TBS continues to play in supporting federal real property management. This includes:

1. Setting the policy framework: In collaboration with custodians, sets the policy framework for how real property is managed.
2. Guidance and tools: Providing guides to support custodians in the management of their real property. For example, a guide to disposals brings together in one place the legislative, regulatory, and policy considerations.
3. Governance: TBS supports Senior Designated Officials for Real Property, through ongoing meetings to improve collaboration and facilitate sharing of information and lessons learned.

In addition, TBS has been working on three key initiatives that further support the management of real property:

1. New risk and compliance process

• In June 2025, the Risk and Compliance Process was launched to help deputy heads meet their accountabilities to manage the people, resources, activities and security of their institutions.
• The Risk and Compliance Process provides an annual mechanism to assess compliance, performance and risk in key areas of administration.
• Real property management will be assessed as part of this process. Departments will need to evaluate whether and how they uphold best value, sound stewardship, and fair open and transparent transactions (for example, without discrimination or favouritism, information available to support decision-making and public scrutiny).

2. Development of a maturity model for real property

• In response to a FAR recommendation, TBS developed a maturity model for real property and will pilot this new model to determine which transactions (for example, purchases, leases, sales) can be managed within a department based on the capacity of the organization and risk of the transaction rather than the dollar value.
• The capacity assessment will provide a “road map” for frameworks and controls and organizations with increased levels of capacity and maturity will benefit from additional flexibilities.
• National Defence is already piloting this model, and it is helping them to more quickly respond to emerging priorities and to make decisions at the speed of business.

3. Supporting the professional development of real property practitioners

• First, and consistent with the recommendations of FAR, TBS has updated the competency framework for real property. This framework, which was last released in 2010, sets out the key knowledge, skills, experience, and attributes that real property professionals need to succeed in their roles today.
• TBS has also been working on modernizing two fundamental courses for real property practitioners that are delivered through the Canada School of Public Service. While one of the renewed courses is already launched, the second one is targeting to be launched in the next fiscal year.

Background

The Centre of Expertise for Real Property (RP-COE) was established within TBS from 2021 to 2024 to coordinate the implementation of a series of recommendations from the government’s Horizonal Fixed Asset Review (FAR).

Budget 2021 provided TBS with $5.2 million over three years to coordinate the implementation of the FAR recommendations.

The RP-COE worked with departments to assign recommendations to custodian departments and central agencies on the basis of each organization’s mandate and asset portfolio and tracked progress on implementation.

Upon dissolution of the RP-COE in March 2024, TBS paused implementation of its own remaining recommendations given capacity constraints, except for the capacity and risk-based authority model, which was prioritized because of its potential to advance many other FAR recommendations and improve overall real property management.

• 43 recommendations were initially assigned to the RP-COE:12 were completed or ongoing, 22 were on track, 5 were not initiated, and 4 were at risk.

Since the dissolution of the RP-COE, accountability for the implementation of outstanding FAR recommendations has shifted to individual custodian organizations.

The Management Action Plan (outlined in the table below which is expected to be provided before the appearance) provides more detailed information on how TBS will meet the commitment made through its Management Response.

Issue

Office footprint reduction plan is at risk and Public Services and Procurement Canada (PSPC), working with central agencies, should explore with federal tenants how to reduce the office space they occupy.

Key messages: real property management

The Treasury Board sets the policy which outlines principles and requirements related to how real property should be managed, while the management of real property is the responsibility of each custodian.

One of the key principles of the policy is that real property assets should be acquired and held only for program purposes. Other principles include those of open, fair, and transparent transactions, which would apply to PSPC when it is acquiring new office space, or disposing of surplus office space that is no longer required.

PSPC is responsible for the delivery of the federal accommodation program. Officials at PSPC would be best placed to answer questions related to its accommodations program and the office space reduction plan.

Key messages: prescribed presence in the workplace (from the Office of the Chief Human Resources Officer)

Since September 9, 2024, federal public servants eligible for a hybrid work arrangement are required to work onsite a minimum of three days per week, or four days for executives, to ensure leadership and effective support for their teams.

The Direction on Prescribed Presence in the Workplace (the Direction) reflects the benefits that consistent in-person interactions offer. Working together onsite strengthens collaboration across teams, enhances in-person connections, and increases opportunities for peer learning and effective onboarding of new talent. It also ensures the ongoing communication, embodiment, and reinforcement of the Values and Ethics Code for the Public Sector through everyday interactions and visible leadership. The goal is to maximize these benefits to deliver most effectively on our mandate to serve Canadians.

If pressed (lines from the Office of the Chief Human Resources Officer)

Adopting hybrid work was the decision of deputy ministers in the best interests of the federal public service.

Working together onsite supports the teamwork, collaboration and culture needed to effectively deliver services to Canadians.

This model, which requires public servants to spend the majority of each work week in the office, remains in place.

Background

PSPC is leading the reduction plan and is responsible for determining how much space is appropriate for each federal employee.

Treasury Board policy requires that departments optimize their real property portfolios by identifying property that is underutilized or no longer needed. This includes PSPC-administered office space that they occupy as tenants.

The office space needs of individual departments are not static and may increase or decrease depending on government priorities. While a period of contraction is expected in the short term, many office space leases are long-term (10 or more years), and planning for the office portfolio needs to consider both short- and long-term tenant requirements.

Changes to work arrangements (for example, hybrid approach with fixed number of days in office) can have significant impacts on space requirements and related office space reduction plans.

TBS consulted multiple times with PSPC before introducing the direction on prescribed presence in the workplace (the direction) in December 2022, which required eligible employees to work onsite two to three days per week by March 2023.

Before announcing changes to the direction on May 1, 2024, TBS consulted with PSPC about the proposed requirements in the updated direction. The May 2024 update increased presence in the workplace from two to three days per week to three days per week for eligible employees and four days per week for executives. PSPC confirmed that implementing the updated direction was feasible given available office space.

TBS as a department has been leading by example in the reduction of its own real property footprint.

Issue

Important information about office buildings was not publicly available, such as percentage use of office space, specific buildings sold and their condition, total proceeds of sale on office buildings, total estimated market value of office buildings sold and those remaining in the portfolio, information regarding the contributions toward new housing efforts of the surplus properties disposed of, and greenhouse gas emissions of office buildings in the portfolio

Key messages

For data related to the use of office space (for example, number of workstations, vacant workstations, number of employees using the space), buildings sold, total proceeds of sale, total estimated market value, and contributions toward new housing efforts, I would defer to my colleagues at PSPC.

Background

PSPC previously reported on three core accountability indicators (that is, cost per square metre, cost per FTE, and square metre per FTE), at the individual tenant level to Parliament through the Main Estimates on an annual basis. PSPC currently reports on one indicator (square metre per FTE) through its Departmental Results Report.

In terms of the information that TBS has on real property, it maintains the Directory of Federal Real Property (DFRP), a central repository of federal buildings and land used for federal program purposes (for example, no reserves). Data held in the DFRP is general data at the property level. The data relevant to the utilization of real property, in this case, office space, would be held by the relevant custodian, which is PSPC.

• The DFRP includes owned and leased assets; however, condition and age are only tracked for Crown-owned assets.
• Departments are owners of the data in the DFRP and are responsible for updating it within 90 days of any changes. Departments also attest to the completeness and accuracy of the data annually (November 30).
• The DFRP is publicly accessible and includes information on building use and types, age, condition, floor areas, primary use, and property land area. The information gaps related to office space that the audit points out are not captured in the DFRP and would fall under the responsibility of PSPC.

Each of the 28 custodian departments is responsible for:

• Establishing and maintaining an information system that enables the collection and generation of comprehensive and accurate data on real property holdings, operations and transactions, and supports government-wide reporting requirements.
• Monitoring the performance of their real property assets across five key areas: financial, environmental, physical, utilization and functionality.

Overview

The audit found that PSPC changed its process to reduce the time to dispose of real property in half. The longer the disposal takes, the more it costs the government to maintain buildings.

Background

The FAR report found that, on average, disposals of surplus federal real property took nine years to complete.

PSPC changed its disposal process to accelerate disposals. It anticipates that the time from surplus to disposal will be shortened to three years.

In April 2024, PSPC created the Real Property Disposal Sector.

The new process includes conducting various steps of the disposal process (that is, due diligence) concurrently instead of sequentially and engaging with involved parties earlier.

10 properties in the National Capital Region were identified to pilot the new process.

While there were efforts, it is our understanding that as of summer 2025, none of these 10 properties had been disposed

PSPC is best positioned to speak to the status of these disposals.

In terms of TBS’s efforts to support the timely disposal of surplus assets it has or is doing the following:

• Provided departments with a Technical Guide to Disposals in 2023 and continues to update it as needed. This guide offers advice and guidance on how custodian departments can comply with administrative policy requirements for disposals.
• Amended its Treasury Board policy in spring 2025 to remove requirements for certain aspects of due diligence (for example, environmental condition or security assessment) when they are not relevant. This could help accelerate disposals by up to six months.
• Is actively reviewing its policy and collaborating with custodians to identify if there are any other barriers within it that could be adjusted to responsibly expedite disposals while also ensuring that the right checks and balance are in place.

Of note, the legal obligations, which the Treasury Board cannot exempt a department from, can contribute to long timelines:

• consultations with Indigenous groups (duty to consult)
• consultations with official language minority communities

Additionally, the disposal process must account for due diligence that, while time-consuming, is essential. For example, environmental assessments for potential acquisitions may reveal contamination that requires site remediation or other risk mitigation measures.

Overview

The audit found that CMHC is on track to meet the targets of the Federal Lands Initiative (FLI), but reporting on progress was not clear and the program did not maximize access to affordable housing for those in greatest need.

Key messages

TBS does not have a direct role in the FLI program.

As part of the initial approval of this program, the Treasury Board provided flexibilities to its policies to enable the sale or transfer of surplus real property discounted down to nominal value in order to be developed or renovated for use as affordable housing.

Repurposing surplus federal land and buildings can help increase the supply of sustainable, accessible, and affordable housing.

Background

The FLI targets that the audit examined included:

• secure commitments by 2027–28 to build 4,000 housing units
  • 3,946 housing units were committed to at the time of the audit.
• minimum accessibility (20% of all units) and energy efficiency requirements (25% decrease in energy consumption)
• meet minimum affordability requirements (at least 30% of units must be less than 80% of market rent, for a minimum of 25 years)

FLI defined “affordable housing” as units that are valued at 80% of median market rent in a particular region. This aligns with the CMHC definition.

• Statistics Canada defines housing as affordable when it costs less than 30% of before-tax income.

The audit recommended that FLI could report more clearly on progress by reporting both on housing units committed to being built and the number of units built and ready for occupation.

FLI introduced measures that enhanced the outreach to Indigenous governments and communities for properties in geographical proximity to the surplus federal real property.

The audit found that 39% of FLI projects (17% of units committed) will not serve Canadians in locations where core housing needs are greatest.

• This is due to the location of available government properties suitable for housing. They are not always available in areas with the greatest core housing needs.

The audit found that the affordability requirement was not designed to provide housing that would be affordable for the lowest-income households.

FLI only supported rental housing, even though it could support other types of housing along the housing continuum (for example, affordable home ownership, social housing, transitional housing).

The audit recommended that CMHC determine if the FLI’s affordability requirement should become an income-based measure.

Overview

Flowing from Budget 2017, TBS undertook a three-year government-wide review of federal fixed assets to identify ways to generate greater value from government assets.

Key facts

In 2021, The Horizontal Fixed Asset Review (FAR) published 119 recommendations to improve the overall management of federal real property.

Budget 2021 provided the Treasury Board of Canada Secretariat (TBS) with $5.2 million over three years (2021–24) to coordinate the implementation of the FAR recommendations. The Centre of Expertise for Real Property (RP-COE) was then established within the Office of the Comptroller General.

Background

A small team (never more than nine people) was established within TBS to support the enhancement of federal real property portfolio management.

It was established to coordinate the key recommendations stemming from the fixed asset review and facilitate horizontal collaboration across the federal government through new governance, rather than leading themselves on the implementation of all the 119 recommendations stemming from the FAR. Activities included:

• providing advice, guidance, and support to custodians in the management of their portfolios, which included more “hands-on” central agency support in the development of their real property portfolio strategies, within which individual investment decisions can be rationalized and supported
• reviewing and providing strategic advice to custodians on matters related to professional development and overall professionalization of the real property function
• facilitating horizontal collaboration across the federal government through the Deputy Minister Real Property Committee

The creation of the RP-COE did not restructure or change the core accountabilities in respect to real property management within the Government of Canada. Deputy heads of custodial organizations remain accountable for the management of their respective portfolios.

The RP-COE assigned recommendations to custodian departments and central agencies based on each organization’s mandate and real property portfolio and tracked progress toward implementation (due to some recommendations touching multiple organizations, this does not add to 119).

• 78 recommendations were assigned to custodians
  • 6 of these included joint responsibility
• 43 recommendations, which were assigned to TBS, touched on the areas of governance, portfolio, funding sustainability, leveraging and disposal

Issue

Flowing from Budget 2017, TBS undertook a three-year government-wide review of federal fixed assets to identify ways to generate greater value from government assets.

The Review looked at the Government’s real property portfolio and examined issues that apply to the enterprise portfolio (for example, governance, portfolio management, funding sustainability and disposals).

The 27 (this has since expanded to 28) departments and agencies who administer real property were within the scope of the review. Crown corporations and assets of municipalities and provinces were not.

Throughout the Review, internal and external stakeholders were engaged including organizations such as the Real Property Institute of Canada, the National Executive Forum on Public Property, the Canadian Construction Association, Infrastructure Ontario and the UK’s Office of Government Property (under the Cabinet Office), New Zealand’s Government Property Group (under New Zealand’s Ministry of Business, Innovation and Employment) and the US’s General Services Administration.

The Review confirmed that the state of the portfolio is declining with assets continuing to age and demonstrated that deferred maintenance costs are increasing while the condition and function of assets are deteriorating.

The Review resulted in 119 recommendations to improve federal real property management and support departments and agencies in real property use changes in response to the COVID-19 pandemic.

FAR recommendations

The FAR recommendations were organized into categories:

• governance (15 recommendations)
• portfolio management (18 recommendations)
• funding sustainability (6 recommendations)
• leveraging (4 recommendations)
• divestiture (disposal) (5 recommendations)
• information and information management (6 recommendations)
• real property asset class specific (65 recommendations)

Additional information by category

Governance (15 recommendations)

Establish a robust governance and oversight structure and enhance professional capability. Key recommendations:

• establish and fund a Real Property Management and Transformation Office as the government’s centre of expertise for real property management as a dedicated, impartial entity
• develop and implement an enhanced accountability framework that includes strengthened policy and guidance, enhanced monitoring and reporting, financial incentives and disincentives, and performance evaluation
• develop and implement a comprehensive and holistic approach to community-building, with a view to a “hire-to-retire” employee life-cycle process, to strengthen the federal real property community and enhance its professional capability and strategic capacity
• as a first step, focus on succession planning for the executive cadre to equip the next generation of strategic real property leaders with market-leading skills and knowledge

Portfolio management (18 recommendations)

Commit to implementing a disciplined and systematic portfolio management regime. Key recommendations:

• custodians must develop real property portfolio strategies for their respective departments and agencies, along with implementation plans, and bring these strategies forward for Treasury Board approval
• develop the first Government of Canada Real Property Portfolio Strategy to provide direction, identify priorities and set performance targets for managing federal real property
• develop and implement an asset management framework to enhance life-cycle management
• obtain and maintain up-to-date information on asset condition in support of evidence-based decision-making
• obtain appraisals for the Chief Appraiser of Canada for all federal real property assets to update the replacement value of the federal fixed asset portfolio, as this information is critical for determining the appropriate level of investment to achieve a sustainable portfolio

Funding sustainability (6 recommendations)

Develop a new approach to funding sustainability. Key recommendations:

• Adopt a two-phased approach to achieve funding sustainability:
  1. critical investments over the short term to:
     1. address health and safety issues
     2. reduce deferred maintenance
     3. develop portfolio strategies that align with net-zero and climate-resilient objectives
     4. support “invest to divest” and greening projects;
  2. accurately identify the funding gaps based on results of departmental portfolio strategies and develop and implement a management action plan to achieve a sustainable and affordable portfolio:
     • develop accounting protocols for real property to gain accurate information on expenditures at the custodian and enterprise level.
     • consider the life-cycle funding requirements of assets as part of any funding for new builds

Leveraging (4 recommendations)

Create an environment in which real property is recognized as a strategic enabler. Key recommendations:

• Use the federal real property portfolio as a strategic enabler to advance corporate priorities (for example, net-zero operations, reconciliation with Indigenous peoples, digital transformation and so on) and expand the portfolio’s benefits to Canadians. Launch projects to the Government of Canada’s leadership by using the federal real property portfolio as a strategic platform.
• Comply with the requirements of the Greening Government Strategy and embed net-zero carbon and climate resilience targets in the departmental real property portfolio strategy.
• Produce and maintain a net-zero and climate-resilient real property portfolio plan to determine the most cost-effective way to achieve net-zero and climate-resilient real property operations by 2050.

Divestiture (5 recommendations)

Adopt an innovative and streamlined approach to divestiture. Key recommendations:

• Expedite the disposal of surplus properties through a sustained and coordinated program of action and adopt an innovative approach to the disposal of surplus assets by streamlining business processes and consolidating disposal expertise to accelerate cycle time and maximize value.
• Identify a centre of expertise within the Government of Canada that can provide advice and assistance to custodians in fulfilling their duty to consult.
• Develop and maintain a centralized list of surplus properties that has key performance information and explore the creation of a publicly accessible web portal to support the surplus property circulation process and become an information centre for underutilized federal real properties and properties that are for sale.

Information and information management (6 recommendations)

Place data and systems improvement at the forefront and make business intelligence and data analytics the backbone of real property management. Key recommendations:

• Improve data integrity and comparability at the enterprise level.
• Enhance the information technology infrastructure of the DFRP to reinforce systems, address urgent risks and ensure sustainability.
• Focus on utilizing existing data better by applying new and innovative methods and tools (for example, business intelligence) to provide timely and evidence-based information for decision-making.
• Develop a real property and performance management strategy that includes horizontal key performance indicators that must be measured by all custodians, and data and performance metrics on the achievement of corporate priorities.

Real property asset class specific (65 recommendations)

Targeted recommendations for each asset class

Asset classes:

• office
• engineering
• security and safety
• legislative
• parks and heritage
• housing
• warehousing
• commercial and retail
• education and training
• judicial
• managed land
• health, medical, dental

Status of FAR recommendations

Issue

What is the current status of implementation of the 119 FAR recommendations?

(Response to question from Senator Moreau in the Standing Senate Committee on National Finance)

The Centre of Expertise for Real Property (RP-COE) was established to coordinate the key recommendations stemming from the Horizontal Fixed Asset Review (FAR) and facilitate horizontal collaboration across the federal government.

The majority of the FAR recommendations (70%) were the responsibility of individual departments. As noted by the Office of Auditor General in its audit (paragraph 3.44), responsibility for the progress on the implementation of outstanding FAR recommendations shifted to individual custodian organizations upon dissolution of the RP-COE.

Progress on implementation of the FAR recommendations as last reported just prior to the dissolution of the RP-COE in 2024:

• 31(26%) were completed and ongoing
• 73 (61%) were on track
• 15 (13%) were not initiated or were at risk

As set out in the Management Response to the Office of the Auditor General audit, work to review and prioritize the outstanding FAR recommendations is underway. Part of this review, which is expected to occur over the summer and fall of 2025–26, will include a stock take, in consultation with custodial departments, on the progress made since the dissolution of the RP-COE.

Issue

In September 2025, the government announced the creation of Build Canada Homes (BCH), a new federal agency, to build affordable housing at scale in collaboration with provinces, territories, municipalities, Indigenous communities, and private industry.

Key facts

BCH was launched with an initial capitalization of $13 billion to enable financing, provide public lands, and accelerate approval times.

BCH will prioritize affordable housing and adopt modern construction methods such as modular and mass timber to cut costs and timelines (up to 50% faster and 20% less expensive), while reducing emissions.

Adopting the government’s new Buy Canadian policy, BCH will prioritize projects that use Canadian lumber and other Canadian materials.

To streamline affordable housing efforts, the responsibility for the Canada Lands Company is transferred to the Minister of Housing and Infrastructure.

BCH will have access to the government’s real property portfolio, including 88 (as of September 2025) federal properties suitable for housing listed on the Canada Public Land Bank. These properties total 463 hectares of land across Canada, which is equal to approximately 600 Canadian football fields.

Federal ministers will be instructed to determine suitable lands for housing construction managed by their departments.

Background

There was average media coverage of BCH following its announcement on September 14, 2025.

Build Canada Homes signals strong federal leadership, united approach to tackle Canada’s housing and affordability crisis, Federation of Canadian Municipalities

This is a news release by the Federation of Canadian Municipalities (FCM).

In this news release, FCM endorsed the federal government’s BCH initiative, indicating that it is “a signal of strong leadership,” and welcomed the idea of partnerships.

Commending the federal government’s inclusion of supportive and transitional housing, FCM emphasized the need for sustained federal-provincial funding to make lasting progress on homelessness.

Pembina Institute Comments on the HICC Market Sounding Guide for Build Canada Homes, Pembina Institute

Pembina Institute is a Canadian think tank and registered charity found in 1985 on advancing clean energy future for Canada.

While welcoming the announcement, the Institute highlighted the importance of ensuring affordability (to build and operate, to heat and cool), resilience and insurability of the new homes.

Canada’s Wood Industry Welcomes New Build Canada Homes Agency to Drive Rapidly Deployable Housing, Canadian Wood Council

This is a news release from the Canadian Wood Council.

Canadian Wood Council expressed its support for BCH underlining the alignment between BCH’s emphasis on factory-built housing and prefabricated wood components and the Canadian Wood Council’s advocacy for rapid and scalable home delivery.

Build Canada Homes plan generating strong reactions

Building magazine is a building and urban development publication which explores critical topics, trends, challenges and strategies shaping modern innovative city building and urban development.

This article summarized the reactions of Toronto Community Housing Corporation, the Federation of Canadian Municipalities, and the Canadian Wood Council to the announcement, all of which were in support of the BCH initiative.

Canada announces new federal agency to build affordable housing, Reuters

Reuters noted that the $13-billion investment and the new agency reflect a bold move by the federal government into affordable housing, helping with homelessness and emphasizing reducing risk for private builders (for example, through public lands, lowering land costs).

Build Canada Homes aims to build 4,000 housing units on federal land: Carney, National Newswatch

This is the Canadian Press article carried by multiple media outlets.

Short summary of the facts from the Prime Minister’s announcement.

Issue

Municipalities across Canada have expressed that the government does not pay enough payments in lieu of taxes in comparison to the taxes paid by non-federal properties within their jurisdictions.

Key messages

Under the Constitution Act, 1867, the federal government is exempt from paying taxes to other levels of government, including property taxes.

The tax class and value that is applied to federal real property for the calculation of payments in lieu of taxes are what, in the opinion of the Minister of Public Service and Procurement, would be attributable if the property was taxable.

Background

Under Section 125 of the Constitution Act, 1867, the Government of Canada is exempt from paying any taxes levied by local and provincial levels of government such as property taxes. However, we do make payments in lieu of property taxes to local governments

Provincial and municipal levels of government are typically responsible for setting assessed values for tax purposes. However, under the Payments in Lieu of Taxes Act, the tax class and value to be applied to federal property for the calculation of payments in lieu of taxes is the value that, in the opinion of the Minister of Public Services and Procurement, would be attributable if the property was taxable.

In addition, the Act does establish slight differences between private taxable property improvements and federal improvements that are subject to payments in lieu of taxes. For example, the runway surfaces at federal airports are improvements that are specifically excluded under the Act but are assessable and taxable as privately owned airports. Therefore, the eligibility, tax class and value used to calculate the payments in lieu of taxes on federal property is established by the Payments in Lieu of Taxes Program within the context of both provincial assessment legislation and procedures, and the Payments in Lieu of Taxes Act and its regulations.

Payments are based on the principle of fairness respecting both the taxing authorities and the federal government. They are equitable in comparison to those made by other property owners

Payments are calculated on the basis of values and rates which would apply to federal property if it were taxable

Payments respect the property tax due dates established by taxing authorities and supplemental amounts reflecting interest charges may be made if payments are late

The Government of Canada receives equal access to services provided to other property owners by the host municipality.

Issue

In June 2024, Global Affairs Canada purchased a new official residence for the Consulate General in New York (Tom Clark). The purchase was criticized, with critics claiming it was lavish, and represented poor value for money for Canadians.

Recently, the asking price of the previous official residence was reduced by more than $2 million, reviving criticism of the decision to replace the official residence.

Key messages

Purchase of new residence

Global Affairs Canada’s purchase of an official residence for $9.1 million (Canadian) in June 2024 was within its own authority. Having said that, the transaction still needed to be undertaken in a manner that was consistent with Treasury Board policy, which includes:

• conducting real property transactions in a manner that is fair (for example, without discrimination or favouritism), open (for example, opportunity for all), and transparent (for example, information is available to support decision-making and public scrutiny)
• aligns with commercial real estate practices (for example, legal structures and business practices of the region)
• supported by the appropriate due diligence
• aligned with its departmental real property portfolio strategy

Global Affairs Canada conducted financial analysis, supported by an appraisal from the Chief Appraiser of Canada, that demonstrated that it would be more cost-effective to purchase a property than to renovate the existing official residence.

Global Affairs Canada officials have provided testimony at the OGGO committee on how it respected Treasury Board policy and I would defer to that testimony (or Global Affairs Canada officials).

Sale of previous residence

Global Affairs Canada officials would be best placed to discuss the sale of the previous Official Residence

Background

In the case of Global Affairs Canada, stemming from the Department of Foreign Affairs, Trade and Development Act, it has authority to acquire real property outside of Canada which includes the management of Canada’s diplomatic and consular missions

As part of its real property management processes, Global Affairs Canada assesses the conditions of the buildings within its portfolio to ensure they meet required standards.

Global Affairs Canada’s Property Management Manual outlines the standards for official residences. The residence at 550 Park Avenue had not been renovated since 1982 and no longer met these standards.

Global Affairs Canada’s financial analysis determined that purchasing a new residence aligning with current standards was more cost-effective than modifying the Park Avenue unit to those standards. In addition, the former residence was a co-op unit with an active board, which limited the number of events and guests that could be hosted.

As part of the acquisition process for the new condo unit, Global Affairs Canada engaged a broker to identify properties that met the criteria for official residences.

21 properties were visited and assessed based on pricing and how well they met the criteria. When ranked by price from highest to lowest, the selected property was near the bottom, at 17 of the 21 on the market.

The Office of the Chief Appraiser was engaged to appraise the former residence on Park Avenue and the unit on West 57th Street for negotiation purposes.

Q-3442, September 19, 2025, Michael Barrett (Leeds–Grenville–Thousand Islands–Rideau Lakes): With regard to the former residence of the Consul General of Canada in New York, located at 550 Park Avenue and currently listed for sale: what appraisals have been conducted on the property since it was first listed for sale, and, for each appraisal, what was the (i) name of the company or individual who conducted the appraisal, (ii) cost, (iii) date?

Issue

TBS Internal Audit and Evaluation Bureau undertook an evaluation of the RP-COE between May and December 2023. The evaluation noted the importance of central direction and a whole-of-government perspective in the management of federal real property given that real property is the second-largest federal expenditure (approximately $13 billion to $15 billion) and the rate of deterioration of federal real property assets.

Key messages

The evaluation found that there is a need for centralized management of federal real property given the deterioration of federal real property assets that are essential to the delivery of programs and services to Canadians.

RP-COE provided leadership, improved horizontal governance, and contributed to increased capacity in the real property community. Following the government’s decision not to renew its funding, the RP-COE sunset in March 2024.

If pressed

The evaluation found strong evidence of an ongoing need for the RP‑COE to facilitate collaboration across federal organizations and provide leadership on the horizontal management of federal real property.

In the absence of the RP-COE, TBS continues to support the real property community through horizontal governance and capacity building (for example, professional development).

Each of the 28 custodians is required to have a Real Property Portfolio Strategy and are responsible for the management of their real property assets, taking a life-cycle approach into consideration.

Background

The evaluation found a need for a government-wide vision and strategic plan for real property management, similar to those of other jurisdictions (that is, the UK, the US, Australia and New Zealand).

The federal government is responsible for 39,000 buildings, 27.5 million square metres of floor area, 41,000 hectares of land and 20,000 engineering assets.

• Federal real property assets are aging while condition and functionality are declining.
• Approximately 69% of buildings need attention due to their current physical condition.
• Cost to address deferred maintenance (per sq m) is greater for assets that need attention.
• TBS’s Fixed Asset Review (2021) determined that the deferred maintenance of the building portfolio is $20 billion and growing $2 billion annually.

The deterioration of federal real property assets gets coverage in the media from time to time. Recently, the Western Standard criticized the government for its mismanagement of federal buildings, referencing the facts presented by the Internal Evaluation of the RP-COE and TBS’s Horizontal Fixed Asset Review.

Issue

The government is working toward reducing greenhouse gas (GHG) emissions associated with the operation of its real property portfolio. The Greening Government Strategy, updated in 2024, outlines actions related to federal operations and assets that will help the Government of Canada achieve net-zero emissions by 2050. Questions have been raised about the cost to taxpayers for greening our assets and whether it would be more efficient to simply reduce the federal real property footprint.

Key messages

The Government of Canada considers cost effectiveness in its implementation of the Greening Government Strategy. Operational savings over time are expected to partially or fully offset early investments, especially when taking into account future costs of GHG emissions and negative impacts of climate change. These investments also improve energy efficiency, lowering utility expenses over time.

• For example, in 2023, the government avoided $150 million in energy costs for buildings and $35 million from reduced fuel use from fleet, compared to 2005–06 levels.

Transitioning government assets and operations to be net zero and climate resilient not only reduces their environmental impact but also lowers the government’s exposure to climate-related risks and future financial liabilities.

Reducing the federal real property footprint is both more efficient and environmentally sustainable. However, federal properties play a critical role in supporting the delivery of programs and services to Canadians.

To ensure that property holdings remain aligned with operational needs, departments must regularly assess their program requirements against their real property portfolio. To support this alignment and promote responsible stewardship, TBS requires departments to develop and implement a real property portfolio strategy focused on footprint optimization.

TBS’s Centre for Greening Government works closely with PSPC to ensure compliance with the Greening Government Strategy. Starting in 2025, the Greening Government Strategy requires that all leased office space comply with net-zero emissions standard. As the common service provider for office accommodation, PSPC is developing a plan to transition its leasing portfolio to a net-zero emissions, climate-resilient portfolio.

Background

In 2023–24, federal real property emissions were 50% of government’s total direct and electricity-related GHG emissions, including those of national safety and security fleets (RCMP, military, Coast Guard).

The government is committed to implementing the most cost-effective pathway to achieve net-zero, climate-resilient real property operations by 2050.

To implement net zero in real property and fleet operations, the government aims to reduce absolute Scope 1 (produced by sources owned/controlled by the government) and Scope 2 (generated indirectly from the consumption of purchased energy) GHG emissions by 40% by 2025 and by an additional 10% every five years until 2050.

Media scan

Exclusive: Carney’s lone Green promise could cost trillions – or more than all Tory spending combined, Western Standard

This article argues that the Prime Minister’s pledge to replace fossil fuels in government buildings would require a significant investment, noting that precise cost projections for decarbonization of all public buildings remain unclear, raising concerns about fiscal credibility and long-term financial effects.

Former environment minister fears Mark Carney’s climate plan won’t lower emissions, Toronto Star

Former Environment Minister Catherine McKenna criticized the idea of a “grand bargain” between the federal government and the fossil fuel industry. She expressed concern that Prime Minister’s approach may undermine Canada’s Paris Agreement commitments and urged the government to prioritize clear climate targets and accountability, in order not to risk falling short on global climate obligations.

Billions in federal buildings, roads and other assets at risk from extreme weather, Canada’s National Observer

The Auditor General of Canada is launching a performance audit of the government-wide Greening Government Strategy to assess how well the federal government is protecting its infrastructure, including buildings, dams, and vehicles, from the growing threats of climate change. The audit focuses on three key departments National Defence, Fisheries and Oceans, and PSPC.

Issue

How TBS supports the Government of Canada’s efforts to reduce its office footprint as a tenant of PSPC space.

• TBS has moved to one building and completed its Under One Roof Initiative in 2023–24.
• There was an incentive to consolidate space as TBS was also able to achieve targeted savings in accommodations-related operating expenditures related to security services, tenant services (HVAC, plumbing, mailroom and cleaning), onsite IT services and photocopier contracts.
• TBS is currently operating at 10 m² to 11 m² per FTE, compared to the Government of Canada’s target of 9 m² per FTE, and we are on track to meet this target within five years, ahead of the 10-year government-wide timeline.

Professional services contracts: GC Strategies Incorporated

Finding: Professional services contracts awarded and payments made to GC Strategies were not made in accordance with applicable policies and value for money was not obtained

Recommendation: None. Organizations encouraged to implement recommendations stemming from other recent procurement audits.

Question 1

K. Block (Conservative Party of Canada) 11:08:40

What, if any, rationale was given for why the COE for real property, which was created in 2021, was dissolved only three years later?

Auditor General response

TBS is involved in a couple of elements related to federal office space, including setting the tone for in office presence (Office of the Chief Human Resources Officer). This is a key element to look at when determining office space use and how much is needed.

COE issued 119 recommendations. They were dissolved in March 2024; the Auditor General was told it was due to a lack of funding. (Correction: FAR issued the recommendations and the COE was established to kick-start their implementation.)

Now, responsibility is on the departments to implement the rest of the recommendations.

Only 21 of 119 had been implemented at time of dissolution. The Auditor General was concerned that the recommendations could be forgotten without COE in place, but responsibility is on those parties to implement. (Clarification: 31 recommendations were implemented and ongoing.)

TBS response

The RP-COE was provided $5.2 million over three years, which sunset in March 2024.

With time-limited funding, it cannot ever be assumed that it will be renewed. This is why when the RP-COE was set up it prioritized its activities with this view in mind.

It prioritized overall coordination – assigned recommendations to relevant custodians and establishing governance foundational horizontal initiatives that would have high impact, for example, providing hands-on support for departments to have a real property portfolio.

Implementation of the recommendations were and continue to be the responsibility of departments.

It is important to underline that TBS continues to support real property management across the government. This function existed before the COE-RP and continues after. We continue to make progress on FAR recommendations that were assigned to TBS. For example, since the dissolution of the COE:

• We have updated training for real property professionals, and we are about to launch a new competency framework, which sets key knowledge, skills, experience, and attributes that real property professionals need to be successful in their roles. This framework will support employee development and career advancement and ultimately improve the government’s real property management capacity.
• We also developed and launched a pilot for a new authority model for real property that assesses departments maturity and capacity in real property.

Question 2

K. Block (Conservative Party of Canada) 11:10:10

Based on the audit report, had government kept oversight (for the implementation of FAR recommendations) in place, would there be more progress in efforts to create affordable housing?

Auditor General response

This one element of oversight wouldn’t have been the thing to keep this on track or improve the pace of it.

Report found larger departments who occupy a lot of space had yet to sign space reduction agreements.

Departments cited lack of clarity around return to office and space needed to meet their mandates, but the Auditor General says many elements contributed to lack of progress aside from oversight.

TBS response

The COE-RP did not have any role in social housing. Its role was to coordinate efforts focused on implementing the FAR recommendations.

There were no FAR recommendations related to the Federal Lands Initiative or affordable housing more generally.

As such, the wind-down of the COE has had no bearing on the social housing agenda.

Question 3

K. Block (Conservative Party of Canada) 11:11:30

How much would it have cost to keep oversight program running, compared to how much it has cost due to delays in implementation after dissolution?

Auditor General response

Funding of $5 million over three years was given to do the whole Fixed Asset Review and then coming up with recommendations. It would stand to reason you’d need fewer people to continue the oversight. (Correction: $5 million over three years was for the RP-COE to coordinate and implement recommendations from the FAR, who came up with the recommendations.)

Question should be asked to the Treasury Board on how to maintain a consistent level of oversight and how much that would cost.

TBS response

The RP-COE was provided $5.2 million over three years (approximately $1.7 million per year) and as the audit found the small team managed to have a meaningful impact in that time.

It is important to clarify that the COE did not provide oversight on real property management, office space management or social housing.

Its mandate was to coordinate the implementation of the FAR recommendations and facilitate horizontal collaboration across the federal government. Its oversight function was on the progress related to the recommendations.

It is difficult to estimate costs associated with delays in implementation of FAR recommendations as there was no “estimated benefit” attributed to each of the recommendations.

TBS continues to play its core policy function, and as part of that it continues to advance recommendations that were assigned to TBS.

Question 4

K. Block (Conservative Party of Canada) 11:13:10

According to CMHC, the Federal Lands Initiative gives discounts on government property based on the level of social outcomes. Did the audit reveal what kind of discounts federal land is sold at? If so, what were they?

Auditor General response

The audit didn’t look at what the property was sold for.

The focus was on properties being freed up in locations that have the greatest need for housing, and the finding determined that this wasn’t always the case.

This comes down to PSPC having accurate information to know which buildings they want to target.

The biggest concern was affordability. Homes being built were not affordable for those in greatest need.

TBS response (if asked)

This is a question best answered by CMHC as the framework for determining the discount is part of the Federal Lands Initiative (FLI) program.

Generally, our understanding is that the discount on the property purchase or lease offered by FLI depends on the level of social outcomes achieved by the approved proposal. These properties may be discounted at any level, down to no cost.

Question 5

M-H. Gaudreau (Bloc Québécois)

Looking at amount of space owned by the Government of Canada, since 2019 there has been very little reduction of space. How can so little have happened in such a long time?

Auditor General response

The Auditor General asked this same question during her audit.

The government in 2017 specified that federal office space was underutilized and they wished to reduce it by 50% by 2034.

In 2019, no specific funding was set aside.

In 2024, PSPC was provided funding to reduce office space, so one would hope that progress will be made.

TBS response (if asked)

TBS’s role is related to setting real property policy. It sets out the principles of best value and sound stewardship of public resources.

Your question gets to how the government’s office space is distributed and managed or what we would call in government the Accommodation Policy. This is different from Treasury Board policy on the management of real property, which focuses on the management of the land and the structures more than what’s inside them.

PSPC leads in both areas. They are responsible for establishing the Accommodation Framework and manages the office facilities. This is why my colleagues at PSPC would be best positioned to speak to the efforts that have been undertaken to reduce the office footprint.

(Of note: The process includes a number of steps, including identifying space needs, adjusting agreements with tenants, and then analyzing surplus space. In addition to this, many office leases are long term.

Question 6

T. Jansen (Conservative Party of Canada)

Should Canadians be concerned that the definition of affordability used by FLI (80% of median market rent) “is a big part of the problem and why the lowest-income families… are still being left out in the cold”?

If FLI failed to deliver real affordability, why should Canadians expect that (BCH) won’t just fail on a much bigger scale?

Auditor General response

I can’t talk about (BCH) but would expect a housing program would examine affordability, accessibility and sustainability. Not every home can meet these criteria.

I would like to see broad ranges of housing made available.

The National Housing Strategy calls for affordability to be based on household income (Statistics Canada definition – housing costs less than 30% pre-tax income), while CMHC uses a different definition (80% median market rent).

The Auditor General has recommended CMHC align its definition of affordability with National Housing Strategy.

TBS response

The Treasury Board’s real property policy is about how federal organizations are to effectively manage their federal real property to deliver on their departmental mandates.

This is separate and distinct from housing policy. This is a question for the lead department (Housing Infrastructure and Communities Canada).

If pressed

There is nothing in Treasury Board policy about affordability.

Our policy does state, though, that federal real property that is surplus to program requirements should, where possible, continue to serve a public purpose function that benefits Canadians. The Treasury Board Directive on the Management of Real Property includes requirements that prioritize the continued public purpose use of surplus federal real property.

Note what Paul Halucha (Deputy Minister, Housing Infrastructure and Communities Canada) said at PACP on September 25 that Build Canada Homes will adopt a flexible definition of “affordability” dependent on the market and the type of housing that would best serve it.

“Deeply affordable” units less than 30% of before-tax area median household income for households with low or very low income in their regions (for example, fixed income or minimum wage earners)

“Affordable” units are less than 30% of before-tax median household income for households with moderate or medium income in their regions (for example, essential workers, nurses, construction workers).

Market units as part of mixed communities to support the cost of building affordable and deeply affordable units.

Question 7

K. Block (Conservative Party of Canada) 12:05:02

The report notes that FLI reported on housing that was also committed to under other programs. Are there other instances of numbers being reported like this outside the scope of the audit?

Auditor General response

The report highlighted a lack of clarity in the reporting.

These are still other projects led by CMHC, but a piece of property was added via FLI so it was also counted here.

The biggest concern is how FLI measures success – through housing commitments, not actual housing built and ready for occupancy.

TBS response (if asked as TBS has a broad role on reporting in government)

FLI is responsible for reporting on its own programs.

Crown corporations report in various ways, including through annual reports.

Question 8

K. Block (Conservative Party of Canada) 12:06:35

Could FLI reporting – including both housing commitments and housing ready for occupancy in the totals – be misleading to Canadians who are looking to evaluate the government’s progress on the success of the program?

Auditor General response

The question aligns with the statement that the reporting suffers from a lack of clarity.

The report concludes that FLI was on track to meet its targets (which is to have 4,000 commitments), though only 49% of the 4,000 will be ready for occupancy by the end of the program (2027–28).

More accurate reporting (for example, including information about expected occupancy, construction delays) would help Canadians make decisions on where they could access affordable housing.

TBS response (if asked as TBS has a broad role on reporting in government and evaluation policy)

FLI is responsible for setting its performance metrics and targets and reporting against them. The target is 4,000 commitments to build affordable housing and both commitments to build and ready-for-occupancy homes meet that criteria.

Reporting on Government of Canada programs is done in various ways, including through the annual Departmental Results Reports and, in the case of Crown corporations, annual reports.

Question 9

P. Rochefort (Liberal Party of Canada) 12:18:25

Who is responsible for signing office reduction agreements?

Is there any political involvement in these agreements?

Auditor General response

My understanding is that an office reduction agreement is between the deputy minister of a department and PSPC. That is the process followed by the Office of the Auditor General, assume others are the same.

TBS response (if asked whether TBS has a role)

TBS doesn’t have direct responsibility in the delivery of the office accommodation program and the office footprint reduction.

My colleagues at PSPC would be best positioned to provide details on how space agreements are established.

Question 10

C. Sousa (Liberal Party of Canada) 12:30:00

Regarding office space, the report indicates there is resistance from tenants to give up space. Could anything have been done to prevent this? What can be done to mitigate this in future in regard to the relationship with the tenants?

Auditor General response

Not every department has a financial incentive to reduce their rent. If they had financial incentives, they would most likely work to reduce their footprint if its underutilized.

It is up to the government to find the best way to get tenants to agree to free up more property for use as affordable housing (for example, consolidating space into fewer buildings, renovations to make offices more attractive for people to come into work).

PSPC needs to enforce compliance with the government objective to reduce office space by 50% by 2034.

TBS response (if asked)

This question would be better answered by my colleagues at PSPC.

TBS doesn’t have direct responsibility in the delivery of the office accommodation program and the office footprint reduction.

PSPC is responsible for the delivery of federal accommodation program. To do so, PSPC works closely with 103 departments that occupy its office space to understand space requirements for each organization.

At TBS, I know that we made the decision to consolidate our footprint.

Through the successful completion of the TBS Under One Roof initiative (completed in 2023–24), TBS is leading the way in footprint reduction, and it reflects our commitment to efficient space utilization, sustainability and proactive support of government-wide priorities.

We are currently operating at 10 m² to 11 m² per FTE, compared to the Government of Canada’s target of 9 m² per FTE, and we are on track to meet this target within five years, ahead of the 10-year government-wide timeline.

Question 11

C. Sousa (Liberal Party of Canada) 12:32:35

Regarding occupancy metrics used by other OECD (Organisation for Economic Co-operation and Development) countries, what is the right target for occupancy density that should be established by the Government of Canada?

Auditor General response

Not one size fits all. Leverage the expertise and understand how space is being used now.

The motivation should be financial. Underutilized space costs money, and there is opportunity for savings by reducing the footprint.

TBS response (if asked)

This question would be better suited for my colleagues at PSPC.

PSPC, as the policy centre for the office space accommodations program, sets the fit-up standards for the Government of Canada’s office space.

Question 12

K. McCauley (Conservative Party of Canada) 12:34:30.

Have you looked at whether the government is still purchasing office space at the same time they’re trying to reduce their footprint?

Auditor General response

We didn’t look at that. We were focusing in on the plan to reduce.

It is complex. Certain buildings may not be sustainable for whatever reasons; maybe the repairs are going to cost more and it might make sense to acquire a different building. Not every building is going to be fit for purpose for a particular organization. One size won’t fit all.

TBS response (if asked)

This question is best directed to PSPC who is responsible for the management of general-purpose office space.

If pressed

TBS has consolidated its office space and reduced its footprint.

Question 1

Jean Yip (Liberal Party of Canada) 11:20:00

In the Auditor General’s report, it is mentioned that the Treasury Board made good progress in implementing improvements on how real property is managed in the federal government. Could you expand on that?

Auditor General response

The Treasury Board has a dual role. They set return to office policy for public servants.

When it comes to housing, with PSPC, they are the ones that free up buildings that can be moved to the Canada Lands Initiative (correction: Federal Lands Initiative).

In 2019, TBS did an asset expenditure review, which examined what assets could be better utilized in the public service. When funding sunset for this initiative, the centre of expertise was dissolved, and now the accountability rests with individual departments to implement the recommendations.

TBS response

During the COE-RP’s mandate, which was focused on coordinating and supporting the implementation of the Fixed Asset Review recommendations, it:

• stood up and administered senior level governance with a mandate to provide a government-wide perspective on the management of federal real property and to offer high-level strategic advice to all federal custodians
• supported the advancement of real property portfolio strategies through the delivery of training and the provision of tools, advice and guidance
• made progress the professionalization efforts – updated training and led collective staffing efforts to address key skills gaps and increase the diversity of the real property community, including recruitment of qualified practitioners to affect the greening of real property

TBS continues to make good progress in implementing improvements to the management of real property on a number of fronts:

• In 2025, launched a new Risk and Compliance Process to support deputy heads in their accountability related to compliance with Treasury Board policies, strengthening risk and compliance measurement. Real property is one of the areas that will be assessed.
• Developed a Maturity Model for real property and initiated a pilot to determine which transactions (for example, purchases, leases, sales) can be managed within a department based on the capacity of the organization and risk of the transaction rather than the dollar value. This model will provide additional flexibilities to the departments with increased levels of capacity and maturity and accelerate transaction timelines.
• Supported professional development for the real property practitioners by updating the competency framework and modernizing two fundamental real property courses, delivered through the Canada School of Public Service (one course is launched, the other will be launched in the next fiscal year).
• Made amendments to the Directive on the Management of Real Property (that is, due diligence requirements and transfer of administration) to increase flexibilities and accelerate transaction timelines.

Question 2

Kristina Tesser Derksen (Liberal Party of Canada) 11:39:45

The report mentions a need for improvement on data collection for federal tenants. What improvements can be made to get that data flowing more efficiently to make informed decisions?

Auditor General response

We need data on how much office space you have and how it’s being utilized.

Data on how it’s being utilized was missing.

There isn’t a standardized process to collect utilization information from departments.

TBS response

TBS maintains the Directory of Federal Real Property (DFRP), a central repository of federal buildings and land used for federal program purposes. Thus, the DFRP holds data on the federal real property assets and land PSPC owns and leases, but not the tenants’ use of this space.

Given that TBS does not have any direct responsibility in the delivery of federal office space, my colleagues at PSPC would be better positioned to respond to this question.

Question 3

Kristina Tesser Derksen (Liberal Party of Canada) 11:43:45

It is noted in the report that there was a cutting of the preferred disposal time from six to eight years to three years. What is rationale for doing this and was it realistic? Were there outside factors that made the proposed reduction sensible then but perhaps difficult now?

Housing Infrastructure and Communities Canada response

Housing Infrastructure and Communities Canada (HICC) focuses on properties that were declared surplus and put on the land bank.

HICC says the average time for disposal is nine years, which remains too long at this point. There are many theories as to why it takes so long.

This suggests that there was no premium or public policy objective to move properties through the system quickly, but now, there is urgency and more senior attention.

There are processes of consultations, including with First Nations, as well as environmental assessments that do take time.

The Canada Lands Company’s move into HICC’s portfolio will allow for greater coherence amongst federal actors in the housing space. All housing entities are now under a single minister with a single mission, as laid out in the PM’s mandate letter.

With regard to speeding up the process, the announcement also directs ministers to make land available with high housing potential, which is a shift away from land only being made available through a surplus process.

The Canada Lands Company will now have resources to build on underutilized federal lands. Canada will get back into building and accelerate the rate at which homes are brought to the market.

TBS response

Consistent with the Fixed Asset Review recommendation, we have undertaken efforts to help support the speed of disposals where we can:

• Treasury Board real property management policy has been amended to introduce flexibilities in the kind of due diligence that is required for different types of transactions; for example, a physical assessment may not be required if the asset will be demolished or for accessibility considerations depending on the intended use
• made it easier to transfer properties between departments
• introduced changes so that departments can manage more real property transactions within their own authority (such as transfers to the Canada Lands Company)
• In addition to Treasury Board policy requirements, there are legal obligations that departments must meet when disposing of real property; consultations with Indigenous groups, and official language minority communities, for example, are legislative requirements that extend disposal timelines

Question 4

Tom Osborne (Liberal Party of Canada) 11:57:10

Expresses concern that he’s heard there is a resistance in the public service to modernize workspace and identify the usage of space. What role can PACP play to make sure we overcome this resistance? Further, regarding utilization, only 37 of 105 tenants provided data. Without data, how can the public service zone in on buildings that could be made surplus?

Auditor General response

Next week’s committee meeting with PSPC will be the best opportunity to address these concerns, as they are leading the exercise in overall reduction of office space.

Agrees there is a fundamental need for data to make decisions.

It is left up to every department to track and monitor use of space, and this is something that should be centralized.

TBS response

Treasury Board real property policy requires departments to monitor the performance of their real property in five key areas, including utilization (the others are financial, environmental, functionality and physical).

TBS does not prescribe to departments how this performance should be measured, as the specific metrics would differ depending on the type of space and its program purpose.

Question 5

David McKenzie (Conservative Party of Canada 12:04:40

Expresses great difficulty understanding an inability to identify usage of space by the federal government. How long has the effort been underway to identify space utilization?

Auditor General response

The work to identify underutilized space and identify surplus office space began in 2017. Not a great deal occurred to move forward as there was no funding allotted to this activity.

Budget 2024 gave funding to move forward. Now, cooperation is needed from all federal tenants.

The Auditor General identified hesitation from larger tenants to participate due to a variety of reasons, including an inability to reduce space due to associated risks of not being able to deliver on operational mandates, concern about an increased requirement of in-office presence, and lastly, a lack of incentive to participate in the efforts led by PSPC. For most departments, they do not pay rent, so financially it was not a driver for them to move quickly.

TBS response

TBS doesn’t have direct responsibility in the delivery of office space or the office footprint reduction.

PSPC is best placed to respond to this question as they are responsible for setting the standards for office space (for example, space per employee) which would be used by departments to determine if they have enough space and/or if it is being underutilized.

Question 6

Anthony Housefather (Liberal Party of Canada) 12:13:48

Why do the recommendations of the report not include a recommendation for all tenants to pay for their occupied space, so they have an incentive to reduce their space? Why do we not create a model where everyone pays rent for the space they occupy?

Auditor General response

The Auditor General says this is a policy decision. The Auditor General doesn’t recommend policy changes and can only comment on how the policy is implemented and what unintended consequences may exist.

Agrees there is a missing incentive for departments to contribute to the initiative.

PSPC should weigh in on this matter, as they are the custodians of the properties that tenants are hesitant to reduce space for.

TBS response (if asked)

TBS doesn’t have direct responsibility in the delivery of office space or the office footprint reduction.

PSPC is best placed to respond to this question as they are responsible for setting the standards for office space (for example, space per employee), which would be used by departments to determine if they have enough space and/or if it is being underutilized.