Op-Ed: The City of Ottawa Risks Being Hollowed Out by the Federal Government

This article was originally published by Sueling Ching, President and CEO of the Ottawa Board of Trade in the Globe and Mail on July 21, 2025.

Ottawa’s downtown, once the bustling hub of the federal public service, is now a shadow of what it used to be. Streets are quieter. Many storefronts sit dark. Several federal office towers stand underused, some entirely empty. This is not just pandemic fallout; it is the result of a sustained disengagement by the federal government from its own capital city over the past five years.

Ottawa is not just another Canadian city. It is the seat of Parliament, the Supreme Court, and more than a hundred embassies; it is a living repository of our shared history. It is where Canadians gather to protest, celebrate and mourn, and where international visitors come to understand who we are. It should reflect the strength and stature of a G7 nation.

Yet, at a time when Canada strives to assert itself on the global stage as a confident and united actor, how do we explain a government that has increasingly stepped back from its own capital?

Let us be clear: this is not a call to drag public servants back to the office or to cling to aging buildings for sentiment’s sake. It is a call for leadership, transparency and accountability from the federal government to the city it depends on, and to the capital that belongs to every Canadian.

The federal government is not just a tenant in Ottawa; it is the anchor employer and economic engine of the region. The federal government currently employs about 154,000 people in the National Capital Region. Likewise, the government holds about 5.9 million square metres of office space, with more than half located in the National Capital Region. By virtue of this scale, its decisions shape land values, transit, housing development and the survival of thousands of small businesses in the region.

Since the shift to hybrid work, the city of Ottawa has waited for a clear federal work-force strategy. We are still waiting, and the cost of inaction is growing. In the meantime, vacant federal buildings deteriorate while operating costs for the federal government’s real property portfolio balloon to $2.14-billion a year. Residents and businesses remain in limbo, and investors hold back much-needed investment because of the lack of clarity. The Auditor-General’s most recent report confirmed that the federal office portfolio is severely underused and that plans to reduce office space by 50 per cent have barely begun. While this goes on, the public service has shed nearly 10,000 jobs in the past year alone, a loss felt deeply in the national capital.

If a private company abandoned a community, cutting jobs and leaving behind vacant properties without a proper plan, it would be called out. In fact, the federal government has publicly criticized companies for doing exactly that. So why is it acceptable when the government itself does it?

Ottawa does not need to return to the past or inflate its bureaucracy. It needs a clear, responsible and forward-looking plan. That means a defined return-to-office policy, however flexible, that provides certainty for the city and for investors. It means moving quickly to divest surplus properties, not simply to the highest bidder but in ways that encourage mixed-use development, new housing and a vibrant core. It also means investing in Ottawa’s transition, helping the city diversify its economy and modernize its downtown and broader region away from an overreliance on the public service, perhaps by designating Ottawa a hub for Canada’s expanding defence and security sector. With so much defence infrastructure already based here, Ottawa is well positioned to become a national cluster for defence innovation as Canada meets its NATO spending targets and global security commitments.

Ottawa’s business and civic leaders are ready to work with federal departments, parliamentarians and stakeholders across Canada to co-create a bold and resilient plan – one that reflects the capital every Canadian deserves.

As Prime Minister Mark Carney signals further government cuts, asking departments to trim spending by 15 per cent over the next three years, the city of Ottawa cannot afford to be hollowed out. The government must show how its work-force strategy will safeguard the economy of Canada’s fourth-largest city, the second-largest city in Ontario, and our historic national capital.

Quiet disengagement is not a plan. Canadians deserve better, and so does their capital city.