Federal cuts loom

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Good morning! 

Growing up, I spent quite a bit of time in federal office buildings. My mom worked for the government in Gatineau, and I always loved going to work with her. I would marvel at the huge water fountain at the entrance, enjoy our trips to the coffee shop for treats, and then take a stroll through the mall during lunch hour. I also felt pretty special when the commissioner would give me my very own visitor’s pass.

But, the federal office landscape in Ottawa is changing. Some buildings are sitting empty, there is debate over how often people should be back in the office, and what to do in order to strengthen the city’s core.

Today Kate Chappell takes a look at how uncertainty over future government cuts is creating uncertainty in the downtown core at a time when it’s dealing with many other challenges.

— Charlie Senack, Ottawa Lookout managing editor, [email protected], X: @Charlie_Senack

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WEATHER

Wednesday: 24 🌡️ 13 | ☁️ 

Thursday: 23 🌡️ 11 | 🌤️

Friday: 17 🌡️ 7 | ☀️

DOWNTOWN

How uncertain conditions in the federal workforce is casting a dark shadow over Ottawa

By Kate Chappell

Not long ago, Midori Gifts opened on Bank Street. The owners were willing to give downtown Ottawa a try. Unfortunately, about three years later, they now have their eye on the Glebe because they say there is not enough business in the area, nor foot traffic.

“This is not the best location,” says manager Sancia Best. “It’s just dead.”

That sentiment is likely common among neighbouring businesses, and more could follow as cuts to the federal public service loom, resulting in fewer workers and less spending power flowing through the downtown core. 

This summer, Minister of Finance and National Revenue François-Philippe Champagne and President of the Treasury Board of Canada Shafqat Ali issued letters to Prime Minister Mark Carney’s cabinet, asking them to find 7.5 per cent savings for the 2026-27 fiscal year that begins on April 1, 2026, followed by 10 per cent in 2027-28 and 15 per cent in 2028-29.

This reality, though not unprecedented, will impact ongoing efforts to revitalize the downtown core, and stakeholders are calling on the government for a clear and consistent plan for the federal workforce. 

Hugh Gorman, CEO of Colonnade BridgePort, says layoffs will affect the real estate market, although they will be more of a ripple than a storm. “There is need for concern, but I don't think it's going to be a long-term, sustained negative impact on the core.” 

Large-scale layoffs have happened three times prior in Gorman’s career, he says, the first time with Prime Minister Jean Chretien’s administration, the second with PM Paul Martin’s, and the third with PM Stephen Harper’s. 

The difference this time, however, is the uncertainty created as the federal government re-evaluates its real estate needs, as buildings have become dysfunctional or surplus. 

“The perception of what's happening is far more detrimental in the short term than what's actually really going on,” Gorman says, explaining that property owners are facing liquidity challenges as valuations are down, resulting from fewer transactions and a lack of buyers. Capital is locked in, so unless it’s necessary, no one is selling right now, Gorman explained. “It’s never a good feeling when your money's tied up in a building that you can't get out of right now if you want to,” he says.

Uncertainty amongst investors who would otherwise pour resources into amenities and residential development is harmful to the city’s efforts to revitalize the downtown core. 

While not exclusive to Ottawa, as cities across the world grapple with the continued fallout from the pandemic and the convoy, hybrid work, financial uncertainty and mental health challenges like addiction, the capital’s core is particularly susceptible with almost 154,000 people working for the federal government. Layoffs could reach 57,000 between 2024 and 2028, according to one report. 

This is why Gorman and other stakeholders are calling on the federal government to provide a transparent workforce plan. 

“We need a very comprehensive, well-communicated workforce strategy so that we could start to look at how we can diversify and make our downtown core more resilient now with the potential of cuts impacting further right people in downtown,” says Ottawa Board of Trade president and CEO Sueling Ching.

 “The bottom line is that it's not an economically resilient model to be so reliant on one sector and so the best path forward is for us to diversify.” Furthermore, Ching is calling on the federal government to articulate its plan for its real estate portfolio “with a new level of urgency and accelerate the disposal of those assets so that they can be redeployed as mixed-use.” 

The Board of Trade’s Downtown Ottawa Action Agenda aims for 40,000 new residents in the area and the creation of 50,000 jobs by 2034. The plan also proposes creating a “joint $500-million fund to kick-start a series of catalytic projects, including significant enhancements to the public realms of Sparks Street and ByWard Market, and the establishment of a new Business Incubation District and an Arts/Culture Corridor.”

The federal footprint in the National Capital Region is about 41 million square feet of office space. Public Services and Procurement Canada has detailed a plan to reduce its real estate portfolio by 50% over 10 years, including a list of Ottawa buildings like L’Esplanade Laurier, the Jackson Building on Bank Street and 1500 Bronson Building and Annex. 

Alain Miguelez, vice-president, capital planning for the National Capital Commission, concurs that it is hard to plan for the future when the fate of the workforce is in question. Nevertheless, Miguelez says the NCC takes a long-term view and is reserving opportunities for federal use of lands, including office or residential space, or even museums or commemorative sites. One of the NCC’s biggest projects right now is playing a role in the addition of a minimum of 6,000 residential units on LeBreton Flats, as well as the sale of 11 acres of land on the same site to be developed as the new home of the Ottawa Senators. 

In the bigger picture, the NCC’s core area plan calls for a downtown core with a larger population and districts that flow more easily into one another.

“We want to create new places. So that are is more destinations to bring people to the core, and we want to turn towards the water so that there are better opportunities for people to get close to the water and more animation and more points of interest or things to do along the water,” Miguelez says. 

Making the core somewhere people want to live and work has always been a challenge, but some developers are eyeing conversions from office to residential space as an opportunity. For example, Groupe MACH is demolishing a building at the corner of Metcalfe and Albert Streets and replacing it with 234 rental apartments. 

But the federal process to dispose of surplus properties is so protracted that it can be prohibitive to developers. “It needs to be dramatically tightened up,” says Gorman. There are opportunities to convert, he says, and the quicker the feds can identify where they won't be renewing leases or alternatively buildings that will be surplus in addition to what's already been announced, that's taking functionally obsolete office space off the market and creating an opportunity for residential development. 

Ultimately, with more residents living downtown, the area can continue its efforts to transition from a government-dependent downtown core to one that’s more diverse, and one that supports small businesses such as Midori Gifts. 

But, reiterates Gorman, that transition needs capital investment, which requires an atmosphere of certainty. “It’s the lack of clarity (from the government) that is really the bigger issue than how many people are going to work downtown five years from now and how many buildings are going to be given up.”

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THE OTTAWA NUMBER

50 km/h

🚌 That’s the top speed of a new self-driving shuttle that will soon begin operating in the Kanata North Technology Park, starting October 9th. The pilot project will run through January 2026. Read more. [OBJ]

THE AGENDA

🏠 The Mayor has promised to end youth homelessness in Ottawa by 2030 and will provide more details in the upcoming city budget about how he plans to do that. Read more. [CTV]

🔥 A fire in a Vanier apartment building has left 11 adults, five children and two cats displaced. No injuries were reported. The cause of the fire is under investigation. Read more. [CTV]

🚲 A new bike app is helping people across Ottawa plan safer and faster routes. It’s being launched at a time when cycling is gaining popularity in Ottawa. In 2024, Ottawa Police reported 123 collisions involving people on bikes. Read more. [Kitchissippi Times]

✈️ A Westboro family has found a missing aircraft part that fell shortly before an airplane crashed near the Ottawa Airport in July. The TSB is still investigating what caused the Grumman AA-5A aircraft to suffer from engine failure. Read more. [Kitchissippi Times]

👮 Ottawa police charged a 23-year-old man with making threatening communications against St. Mark High School. Additional officers are on campus to ensure student safety. Read more. [CBC]

🚓 A year after the fatal shooting of 17-year-old Quentin Dorsainvil, Ottawa Police are again asking the public for more information that could help them solve his murder. Read more. [CTV]

🌲 Some good news: 308 acres of Highlands Forest will permanently be protected through a local land trust. Read more. [Stittsville Central]

🏃 The Army Run is taking place in downtown Ottawa on Sunday. Prepare for road closures and parking restrictions. Read more. [CTV]

🏛️ People from Chelseea are now, according to the town’s council, to be referred to as Chelsien/Chelsienne. Read more. [CBC]

HOME OF THE WEEK

The listing says this is a rare opportunity, and it is indeed true.

This place has a unique Nantucket-style architecture that you have to see to believe. This four-bedroom, five-bathroom house gives access to Mackay Lake with a private dock, has three balconies, and if you own a lot of cars, the added perk of three garages.

Of course, a place like this will cost you a pretty penny…

OTTAWA ARTS GUIDE

Five arts events to check out this month

1. The 14th annual Asinabka Film & Media Arts Festival is a four-day event starting Sept. 18, showcasing numerous Indigenous films, art exhibits, workshops and more. Tickets cost $23 for a day pass. 

2. It’s a big list of top performers coming to Ottawa this month. Aqua, Keith Urban, Korn, Tom Chochrane… Like we said, a big list, which you can find online.

3. Ottawa Chamberfest has ChelloFellos coming to town, and they sound like a blast.  Mix of underground jazz, tango, improvisation and numerous other composition styles, Ryan Cheng and Leo Disselhorst will have you marvelling at what can be done with cellos. On Sept. 2,5 with tickets starting at $45

4. This one is high on our list. A perfect event for anyone interested in film, Ottawa’s Animation Festival is on from Sept. 24-28, with numerous events to both learn how animation is made, as well as watch some great films.

5. To round out our recommendations, it’s all about jazz. The Ottawa Latin Jazz Conference is in September. 26-28 with numerous shows, panel discussions and workshops.

Ottawa music shows

Jean Caffeine plays Meow! That's Hot on 19 September. The Austin troubadour brings punk-folk storytelling, joined by Ottawa vocal-surfing songwriter Suzanne Nuttall. Tickets $15.

The Lionyls bring Soul and Roll to Gladstone Theatre on 19 September. The five-piece Ottawa band celebrates their new EP with support from The New Hires and Loch Nisse Monster. Tickets $21.

Propagandhi returns to Bronson Centre on 19 September. The Manitoba punk legends deliver political thrash from their new album At Peace. Tickets $35.

Kichesippi Shores festival happens on 20 September. This grassroots DIY celebration brings together reggae, indie, and roots music from local talent for an intimate gathering. Tickets $30.

Taurey Butler performs at GigSpace on 20 September. The Montreal jazz pianist pays tribute to Oscar Peterson on what would have been his 100th birthday. Tickets $25.

Listings for music shows are provided by Ottawa Gigs, the best place to discover live music in Ottawa. Check out Ottawagigs.ca for full listings across the city.

OTTAWA GUESSER

COMMUNITY HIGHLIGHTS

• The SPAO Photographic Arts Centre is celebrating its 20th anniversary this fall. [Kitchissippi Times]

• As summer winds down, it’s prime time for wasps to be aggressive. [CTV]

• Redditors are compiling a list of gluten-free bakery recommendations. [Reddit]

• There is a new bus route connecting OC Transpo to North Grenville. [CTV]

• Kanata Theatre’s mystery play, Deathtrap, is getting good reviews. [Apt613]

• Are you looking to hire an artist or performer? Check out the Ottawa Arts Database [Ottawa Arts Database]

ON THIS DAY

September 17, 1960: A growing population of baby boomers meant Ottawa had to start building new schools – and fast.

“More than 60,000 public, separate, and high school students have enrolled this fall. University registrations are making records,” wrote the Ottawa Citizen. “Public school enrolment is expected to be up about 1,100 over last year’s total.”

To keep up with this surge in demand, the public school board hired 142 new teachers.

New schools included the 12-classroom Pleasant Park Public School, which cost $413,000 to build. There was also the $1.5 million Woodroffe High School, and $432,000 Bel-Air Public School. A $13,000 addition was also put on W.E. Gowling School.

September 17, 1976: A provincial downtown revitalization program could be the long-awaited stimulus needed to redevelop Vanier, reported the Ottawa Citizen. Plans to redevelop Montreal Road had been in the works for over three years but saw little movement due to a lack of funds. But now the city would have access to $4 million in provincial loans, which would need to be partially repaid, contingent on additional tax revenue generated by the revitalization.