Federal buildings in need of major repairs increasing in number

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Federal buildings across the country are not aging well.

In Gatineau, tenants of the Terrasses de la Chaudière office complex have complained of bats and substandard water quality over the past two decades. And according to a National Capital Commission report, there have also been a few instances of loose bricks falling off.

Another study, released by the Treasury Board Secretariat of Canada in January, showed nearly 30 per cent of the federal-government-owned buildings in the National Capital Region, such as Terrasses de la Chaudière, have been rated as “critical” or “poor.”

It’s a marked increase from 2017, when the Ottawa Business Journal reported just 18 per cent.

Of the nearly 2,200 buildings listed in Treasury Board’s Directory of Federal Real Property in the National Capital Region, 409 are categorized as in poor shape, while 187 are in critical condition. A critical building has a high probability of failure and would be in need of a large infrastructure investment. The other categories are “fair” and “good.”

Chris Aylward, president of the 180,000-member strong Public Service Alliance of Canada, says the government hasn’t developed a clear or sustained roadmap for upgrades since the Treasury Board assessment.

“Why are we concerned? Because of health and safety issues for our members,” he says. “Hopefully, when COVID-19 settles down, we can get this back on the radar and start moving ahead with some sort of a clear and committed plan to address these issues.”

Since 2015, the public-service population in Ottawa-Gatineau has grown by 11 per cent. According to the latest Treasury Board tally, there are 287,978 public service workers in Canada and 121,230 of them work in the National Capital Region.

Although a large percentage of federally owned buildings are in Ottawa, buildings elsewhere are problematic as well, according to Mr. Aylward.

Public Services and Procurement Canada identifies federal buildings across the country that are located on “contaminated” lands. In St. John’s, for example, a tax centre is operating on an old landfill site – “methane gas is a major problem,” Mr. Aylward says. “It has to be monitored on an ongoing basis.”

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In Windsor, Ont., Revenue Canada’s new office was deemed unsafe in 2019. According to an article published by The Windsor Star, federal employees were reporting floor vibrations, flickering lights and “glitchy” computer screens. More than 300 CRA employees were forced to work from home or other federal building locations in the city. An engineering study is now under way.

The Harry Hays building in Calgary, opened in 1978, is another building that’s in need of repair; Mr. Aylward says he receives complaints every year around air quality, temperature control and mould issues. The building, which houses such departments as Passport Canada, Public Works and Government Services, and Health Canada, was closed briefly in 2007 due to an asbestos scare.

According to Mr. Aylward, while the critical and poor buildings are the priority, most of the federal-government-owned buildings in Ottawa (the average age is 65) could benefit from at least minor renovations.

Upgrading buildings could provide the city with healthy and modern workspaces, he suggests, that would be attractive not only for the public service, but for the growing tech sector as well.

According to CBRE Group Inc., Canada’s capital has a 9.9-per-cent concentration of tech workers, which is nearly double the country’s national average of 5.3 per cent (and barely behind San Francisco at 10 per cent).

“A large-scale building modernization initiative by the federal government would certainly be a huge boost to the economy,” Mr. Aylward says, “and help to ensure more consistent working conditions for all public-sector employees.”

Shawn Hamilton, senior vice-president and managing director of CBRE in Ottawa, says before COVID-19, the city appeared to be on track to take advantage of the steady government employment and growing tech sector.

However, “if we’re looking at all this critical and poor space, there’s a good chance that some would be [unsalvageable],” he says.

But the sale of these buildings, which represent 14.3 million square feet of office space in needs of significant renovations, would grow the commercial real estate market, says Mr. Hamilton, in a city where complementary labour forces – the government and technology – make Ottawa the sixth-tightest downtown office market, in terms of vacancy, in North America.

If the government is interested in selling assets in its real-estate portfolio instead of repairing, “the space would be desirable for anyone,” he says.

“We were optimistic about private-sector demand,” Mr. Hamilton says . A recent CBRE report, released before the pandemic, pegged 2020 as potentially a $50-billion year in investment volume.

Mr. Hamilton says it’s difficult, to estimate an average selling price point, as it depends on factors such as tenant occupancy, cap rates and location.

David Flemming, chair of the Heritage Ottawa Advocacy Committee, says the government is always working on renovating, upgrading and conserving its buildings, despite the Treasury report showing the sharp increase.

For example, a $3-billion, 10-year restructuring, which started last year, is under way on Centre Block on Parliament Hill, and work is currently being done on Block 2 of the Parliamentary Precinct – bounded by Metcalfe, Wellington, O’Connor and Sparks streets.

“Modern heritage conservation is more than just keeping old buildings with vines climbing on the outside of them,” Mr. Flemming says. “You can do adaptive use of heritage buildings, which is a lot of what governments and private developers have been doing.”

The greenest buildings, he says, are the ones already in place, not the ones that need to be torn down and replaced. “That’s why heritage conservation makes economic and environmental sense.”