Office Workers’ Absence Challenges Canada’s Downtowns, Sparks Innovative Revitalization Efforts

Empty downtown streets are shown in Calgary in March 2020, not long after the COVID-19 pandemic began. More than a year after pandemic-era restrictions lifted, many urban downtowns in Canada are still dealing with vacant offices, low foot traffic and safety concerns. (Jeff McIntosh/The Canadian Press)

The once bustling streets of Canada’s downtowns, particularly in cities like Calgary and Winnipeg, are facing a new normal. With office workers not yet back in full force, these urban centers are reimagining their future in a post-pandemic world.

According to CBC News, the impact is notably visible in Calgary’s downtown, where restaurants and businesses grapple with thinner crowds. This situation, exacerbated by the pandemic, follows a downtown exodus initially triggered by the 2014 oil price crash. Matthew Batey, COO of Teatro Restaurant Group, notes a significant decrease in the lunch-hour rush at their Eat Trattoria outlet, a sentiment echoed by many business owners in the area.

The national downtown office vacancy rate stands at a startling 18.9 percent, reports commercial real estate firm CBRE. This figure is the highest in a decade, with cities like Edmonton, London, Ont., and Waterloo Region in Ontario facing some of the highest vacancy rates.

These empty offices and reduced foot traffic have left downtown businesses and restaurants across Canada struggling. In response, business leaders and advocates, including Kate Fenske, chair of the International Downtown Association Canada, have sought federal support in Ottawa. They’re asking for extensions on COVID-era business loans and funds to refurbish decaying downtown infrastructure. Fenske emphasizes the need for a new vision for downtowns, one that extends beyond the traditional nine-to-five workday.

An artist’s conception of a 15-storey medical office tower that’s part of a proposed redevelopment of Winnipeg’s Portage Place mall. The proposal, made by True North Real Estate Development, also includes apartments. (Arhitecture49/True North Real Estate Development)

Winnipeg’s downtown recovery is further hampered by safety concerns, as issues of homelessness and addiction became more visible during the pandemic. The Downtown Community Safety Partnership, a service launched during the pandemic, patrols the area, providing assistance and enhancing safety. Greg Burnett, the group’s executive director, highlights the dual focus on aiding those in distress and ensuring a safe environment for downtown visitors and workers.

Investments are being made to revitalize these urban centers. True North Sports and Entertainment is leading a significant redevelopment in Winnipeg, including renovations to the Portage Place mall and the construction of a medical office tower and apartments. Similarly, the Southern Chiefs’ Organization is transforming the former Hudson’s Bay building into a mixed-use project.

Calgary, having faced a head start on downtown vacancies since 2014, has launched a billion-dollar plan to revitalize its core. The city has announced new residential and hotel projects to convert empty offices, a move being closely watched by North American cities. Mayor Jyoti Gondek highlights the need for a mixed-use downtown combining housing, employment hubs, and recreational spaces.

Despite these efforts, CBRE notes that office conversions alone cannot solve the vacancy issue, and each Canadian downtown must chart its unique path forward. The situation underscores the evolving nature of urban spaces and the necessity for adaptable strategies.

Greg Kwong, regional managing director in Alberta for CBRE, sums up the current state of commercial real estate: “The only constant is change.”