This Toronto post office is a monument to missed opportunities for building housing on federal land

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Last December, about 50 residents in a Toronto west-end neighbourhood packed a public information meeting to understand the fate of their 121-year-old post office.

The building, with its stately red arches, had served as a stand-in town square in the neighbourhood, a gathering place during the pandemic. A decade earlier, neighbours had rallied to save the property behind it for a park. The building was sold in 2021 to a private developer to the surprise of many residents, despite appeals to Canada Post from local politicians to allow more time for a public proposal.

At the standing-room-only meeting, held at the community arts centre across the street from the post office, residents were still angry about the sale, demanding to know the fate of the post office. As would become clear, it had been sold to the owner of a Toronto meat-packing business for $15.4-million, and was destined to become a condo tower in a neighbourhood where escalating rents had for years been squeezing out the local artists and retail workers.

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Sitting on a table by the door, Sean Grisdale, a housing researcher and PhD candidate at the University of Toronto, was not surprised. He’d been digging into the history of public land sales in the city for more than a year. For decades, his research shows, the most valuable housing asset that Canadians own has been vanishing, sold off by governments to private developers who turn them into condos, parking lots, warehouses and office buildings.

Mr. Grisdale’s research found approximately 130 federal land transactions in the Greater Toronto Area over the past 30 years, but only one-fifth resulted in residential builds. And of those 37,574 residential units that were built on once publicly owned land, only about 4.5 per cent became subsidized, co-op or below-market, affordable units.

“This is a squandering of public assets that could have been used for social good,” he says. “It reflects a series of governments without a consistent housing policy.”

Ottawa is now proposing to turn those numbers around, with a historic reversal of the decades-old practice of selling urban land and relying on the market to fill the void of Canada’s missing housing supply.

Instead, the Liberal government promised two months ago to start leasing the land to builders and non-profits to create affordable housing – a policy long adopted by many countries around the world to bank their land for future generations.

The process is supposed to be more transparent, with a detailed published accounting of all federal public land promised by this fall in the April budget. And the more than 1,700 properties owned by Canada Post would now be up for consideration as housing prospects.

A months-long project by The Globe and Mail analyzed publicly owned federal land across the country and its suitability for housing. The Globe found 613 properties in municipalities with more than 10,000 people that were over half an acre, close to existing housing and could be defined as lazy land – that is, they were either vacant, or had one- or two-storey buildings in higher-density areas, often with empty land or parking lots around them. These criteria, according to urban planners, make them good potential candidates for affordable housing. Another 154 larger buildings were also identified for their proximity to housing and potential for residential conversion or future redevelopment.

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In the past, this land might have been declared surplus or sold off, or left underused – but the federal government is now vowing to put housing on “every possible” piece of property it owns. If this plan comes to fruition, it will be a sweeping change from how Ottawa has managed its real estate portfolio since the 1990s, when the government steadily sold off swaths of land owned by newly privatized companies such as CN Rail.

For those who see publicly owned property as a solution to the country’s housing crisis, this all comes too late for huge pieces of valuable land already sold off for cash.

The sale of the post office at 1117 Queen St. W. in Toronto is just one recent example. Since the 1980s, Ottawa has been buying and selling many millions of acres of land. In those 40 years, Mr. Grisdale’s analysis shows, the federal government has actually doubled the amount of land it owns – almost entirely with national park land – while individual departments and Crown corporations have been steadily divesting themselves of a large land inventory. Since the 1980s, National Defence, for instance, went from owning five million acres to 1.5 million acres as bases were sold off.

The fate of all that land is often hidden behind a complicated bureaucracy, buried in boxes in warehouses and archives, obscured by poor record-keeping. It’s not published in a central registry, nor detailed in annual reports. When asked to provide more information around terms and conditions of the sale of the land collectively owned by Canadians, the government often refuses to release information on grounds such as “economic interests.”

Canada Lands Co., for example, the Crown corporation that sells surplus federal government land, such as military bases and office buildings, does not provide the public with the number of hectares or properties that it has sold. It shares only overall revenue generated from its real estate sales. Over the past five years, that amounts to $447-million, according to the company’s financial reports.

“They put out annual reports, they have websites, they have glossy brochures on these projects,” said Heather Whiteside, an associate political science professor at the University of Waterloo who studies the privatization of government and Crown corporations. But the fine print of “how this stuff all actually works” is not transparent, she said.

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Yet one thing is clear: Affordable housing has not historically been a priority for Canada Lands. At a press conference last November, Jean-Yves Duclos, the federal Minister of Public Services and Procurement, acknowledged that over the past three decades, Canada Lands deals worth hundreds of millions of dollars have created only about 2,500 units of affordable housing across the country.

Canada Lands’ record on recent sales is only marginally better. At the same press conference, Mr. Duclos announced the sale of six plots of federal land for 2,800 new homes. But only two locations, in Edmonton and Ottawa, have affordability requirements, and then, only for 314 units, the equivalent of 11 per cent. While the government has vowed that new land would be freed up for affordable housing, the definition of affordability was not provided.

Meanwhile, Canada Post, one of the largest owners of urban public land, is governed by its own legislation that allows the Crown corporation to make independent decisions about selling and buying properties.

In the past few decades, according to Mr. Grisdale’s property search, that’s meant the Crown corporation sold off prime real estate in urban centres such as Toronto, and purchased cheaper land in the suburbs.

Much of that happens quietly. Canada Post did not respond to questions about what steps it takes to circulate the proposed sale of the property first among government groups or the local community. In addition to not releasing the sale price, Canada Post does not itemize its real estate holdings or its sales in its financial reports.

If the Liberals have their way, as outlined in the budget, Canada Lands and Canada Post will need to dramatically change their way of doing business. Canada Lands, for instance, operates by buying surplus land from federal departments, preparing it for sale, and recouping the cost in the deals it makes. Ottawa is now proposing leasing the land long-term for as little as $1. Canada Lands, according to Mr. Duclos, will become the one-stop contact point for municipalities, builders or non-profits interested in leasing certain properties for housing.

Tracking those sales publicly is an unwieldy task, as Mr. Grisdale has discovered. To get his data, he filed access to information requests, scoured archival and title records, and catalogued property transactions for hours at the university’s library. He is also analyzing provincial and municipal land transactions, which he says are even more opaque than federal sales.

In the archives, he found records loosely thrown into boxes. He is awaiting mediation after the Province of Ontario refused to release historical land-sales transactions. Canada Post advised that his request for land-sales information would require a lengthy search through warehouse files since those sales had not been formally tracked, and recommended that he search for the records elsewhere.

“The system of record-keeping is broken,” he said. “I do think they keep records, but it’s largely been putting papers into a box and then putting the box in a warehouse somewhere, and no one knows where it is or has ever looked at it.”

Even the federal government, which he says has been the most forthcoming with data, redacted important information in an access to information request: a list of transactions by Canada Lands going back to the 1990s. It did not include whether sales required transit or affordability conditions, even though Mr. Grisdale specifically asked for it.

When taxpayer-owned land is sold, Mr. Grisdale argues, the public is entitled to know the details: who bought it, for how much and for what purpose, as well as what other buyers and options were considered.

Without that information, how can Canadians assess whether public land is being put to good use?

In the past, when land was declared surplus, it was often subject to a murky and time-consuming sale process where, housing advocates say, governments have valued high prices over worthy public use.

The Treasury Board requires departments to dispose of surplus property as pro-actively as possible, Dr. Whiteside says. This includes shopping it around to other equally cash-strapped departments. Accordingly, Dr. Whiteside explained, there are few takers. The property is then assessed for “highest and best use.” For the past 30 years, she says, the best use for public land was typically to help cover government expenses.

That’s arguably the biggest shift in Ottawa’s new plan – to stop selling public land out of public hands. “Keeping land under public ownership and leasing it to builders – instead of selling it to the highest bidder – will enable new homes to be affordable, forever,” the April budget declared.

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That’s no longer possible for the post office at Queen Street West, and the neighbourhood and city that hoped they might find a way to keep it under public ownership.

Michelle Gay, who has lived in the neighbourhood for 29 years, learned the post office was up for sale when she saw the blue realtor sign in the window. She and a group of neighbours began making calls to local politicians.

Over the next two years, Julie Dzerowicz, the MP for the area, sent repeated letters to senior executives at Canada Post, as well as Anita Anand, then the minister of public procurement, requesting an intervention on her constituents’ behalf, pointing to the possibility that the property could be used for the community. “This building,” she argued, is “in a competitive, out-of-reach market.”

In mid-July of 2021, Toronto city council tried, unsuccessfully, to stop the sale so that the city could have a say on how to use the post office land.

That summer. Ms. Dzerowicz wrote to the vice-president at Canada Post again, asking for a six-month delay to the sale process. In the middle of a pandemic, she explained, it would take more time for community groups to put the money together.

Canada Post’s response was a one-week extension.

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By Christmas of 2021, the post office had a new owner. On public property records, the official sale price was listed as $0. Although the sale price of a property is normally listed on land-title documents, there is a loophole that allows sellers to keep it from public view. As the sale price is used to calculate the land-transfer tax, the buyer can conceal the price by paying the tax before the closing. That prevents it from showing up on the property records.

When residents asked about the price of the post office, Ms. Dzerowicz could only offer a best guess of $25-million. To this day, Canada Post won’t confirm the sale price, and it is not required to do so.

The Globe confirmed the $15.4-million price with CoStar, a commercial real estate firm that has access to exclusive land-registry information not accessed by the public.

Today, the developer’s proposal for a 29-storey condo building has run up against the city’s decision to officially designate the post office a heritage property. The dispute is now before the province’s land tribunal board.

If the developer prevails, the new condo units are expected to be sold at market prices. Currently, the going rate for a newly built one-bedroom condo ranges from $735,000 to $840,000 in the city.

Meanwhile, the average rent for a one-bedroom apartment in the neighbourhood of the post office is just over $2,500, according to the rent-tracking website Rentals.ca – 30 per cent higher than the national average.

Those kinds of housing numbers have renewed interest in public land and highlighted the missed opportunity of past practices.

As Ms. Gay says, “Once it’s gone, it’s gone forever.”

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